Plant expansion, new fabrication equipment help Collins Bus Corp cash in on new market niche
SOMETIMES factors converge to make major business decisions crystal clear.
That is what happed to management at Collins Industries, a NASDAQ specialty vehicle company based in Hutchinson, Kansas. The manufacturer of school buses, terminal tractors, road construction equipment, and ambulances identified some growing market niches, secured attractive financing, and lost some competition - all at the same time.
The result: Collins Bus Corporation constructed a 90,000-sq-ft wing connected to its existing plant, bought several pieces of automated plant equipment, and introduced a new product line designed to take advantage of a growing segment of the bus market.
"Our growth at Collins Bus had caused us to max out our plant, we were able to acquire one of our competitors, and we were able to obtain 3% after-tax industrial revenue bonds to finance the additional capacity we needed," says Don Collins, president/CEO of Collins Industries. "Things just came together for us at the right time."
It is not often that the market grows at the same time that the number of competitors shrinks. But in 1997, Collins was able to acquire Mid Bus of Bluffton, Ohio, a manufacturer of small and mid-size buses similar to those Collins produces.
Meanwhile, safety concerns helped accelerate growth in the company's primary market because a significant number of states have outlawed the practice of transporting students in vehicles not certified for use as school buses.
The nonconforming van issue drew the significant exposure a few years ago following a segment of Dateline NBC. The program documented the use of vans and other vehicles to transport school children, helping place the issue on a regulatory front burner.
"States have begun passing laws against the use of vans," Collins says. "Currently 29 states outlaw them. It also is an issue for Congress and the National Highway Traffic Safety Administration."
The vans and Suburbans that some schools have used to transport students to school functions are not certified for that application. As such, they have not been shown to be adequate for the myriad Federal Motor Vehicle Safety Standards (FMVSS) that school buses must meet, including roof strength, joint strength, and fire resistance.
The nonconforming van issue extends beyond just schools. Large childcare centers also are looking to replace their fleets with vehicles that meet FMVSS.
Meeting the Need To fill the transportation needs of this market, Collins developed the Bantam 5 Activity Bus, a Type A-II bus based on single-rear-wheel cutaway chassis rated at 9,500 or 10,000 pounds GVWR.
The Activity Bus offers a variety of seating configurations, typically between 14 and 20 passengers, depending on the amount of rear cargo area and the desired knee space between seats. Standard specs include 20-passenger seating, 65" interior height, 78" interior width, and a 156"-long passenger compartment.
"We designed the Activity Bus to meet the needs of schools transporting students to events," Collins says. "We offer a lot of flexibility, including the way seats are configured and the amount of space available for equipment storage. It is priced competitively with conventional school buses, but it has the low profile and narrow track of a single-rear-wheel chassis. Because of its lower seating capacity, it does not require a CDL in most states."
Increasing Production The new product has seen quick acceptance. For example, Collins is building between 400 and 600 Activity Buses for national and regional childcare chains in addition to filling orders from a variety of school districts.
To accommodate the increased demand, Collins completed a major expansion to the South Hutchinson plant about a year ago. Along with the increased space, the company also added several major machine tools. Among the equipment now used in the company's fabrication department are a laser cutting table, robotic welding cell, Whitney 3800 punch/plasma, and a new CNC press brake and shear.
"Labor is really tight in the Hutchinson area," Collins says. "We knew that if we were to get the productivity increases out of the expansion, we would need to invest heavily in plant equipment. The big challenge was to identify those niches in the plant that enable us to get the most out of our equipment."
Collins uses the robotic cell to weld seat frames. The Motoman SK16 cell includes two fixtures, enabling the operator to load one fixture while the other fixture is being welded.
"The dimensions of seat frames fluctuate a lot," Collins says. "We have to build them to state and federal standards. But we can use the same steel tubing and sheet metal; so it is fairly easy to program the robot to handle these variations.
"The robot has improved our welding, but it also improved our quality in a way we did not expect. Robots require tight tolerances. We are better manufacturers today because our robot forced us to build to tighter tolerances."
For the laser, Collins selected an Amada 2415XL Lasmac rated at 1,500 watts. It includes a 5' x 16' ball transfer table. The laser can travel 61" along the X axis and 99" along the Y axis at speeds of 3,150 inches per minute. It is equipped with a 32-bit Fanuc PC-based control.
Also new at Collins are a JBL downdraft spray booth and drying oven. The spray booth measures 30' x 18' x 16' and includes a 27,000 CFM air make-up system. The JBL system also includes a 30' 4" x 16' x 15' drying booth to accommodate the increased throughput from the downdraft booth.
Collins is confident of the new system. The company now warrants the finish for as long as the original customer owns the vehicle.
Greater Flexibility The new facility gives Collins greater manufacturing flexibility. The new equipment can be easily programmed, making it easier for the company to produce short production runs.
"School bus manufacturing is a cyclical and seasonal business," Collins says. "We are extremely busy during the summer when the school districts want to take delivery. The late fall and winter months are slow. The new plant gives us extra flexibility. We have the ability now to send some of our ambulance production here when necessary."
Meanwhile, the bus side of the operation promises to provide plenty of activity, thanks in part to the Activity Bus - and a lot of variables that came together at the same time.