Floundering Flyer lays off 100

New Flyer Industries has cut its Winnipeg workforce by about 100 people after bus sales took a steep decline in the fourth quarter last year.

The Winnipeg company’s prospects for 2011 are also grim. It is forecasting a 13 per cent decline in overall North American bus purchases this year, even worse than projections only one quarter ago.

Investors fled the stock in large numbers Tuesday, trading it down 12.9 per cent to $10.30.

Fourth-quarter revenue declined by close to 18 per cent to $204.8 million and operating profit was down almost 30 per cent in the quarter to $17.7 million.

Demand from public transit authorities is compromised because of tax-revenue declines and uncertainty about federal funding in the United States, and bus prices are being eroded.

New Flyer continues to be the North American market leader, but its market share is down three per cent.

New Flyer CEO Paul Soubry said many transit authorities, especially in the United States, have been forced to reduce plans to purchase new buses to preserve capital.

“That has greatly increased competition for the lower demand and we believe competition in late 2010 and early 2011 has been the most intense for several years, with extremely aggressive pricing,” Soubry said.

But the tough market may be creating opportunities for consolidation. Soubry said one of New Flyer’s four major competitors is on an extended shutdown and two others are on reduced work weeks.

From: Winnipeg Free press