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How Bus Transit Can Help the Auto Industry

4:51 PM EDT on October 26, 2009

busmap.pngA map of the companies involved in the supply chain for U.S. transit buses. (Image: EDF)

When Vice President Joe Biden visited Minnesota's New Flyer bus company to tout the economic stimulus law's $8.4 billion investment in transit, hopes were high for a boom in cleaner-burning vehicle production -- which made for some bad press when the nationwide transit funding crunch forced New Flyer to lay off 13 percent of its workers.

But the recession hasn't dampened the economic potential of hybrid bus production, as the Environmental Defense Fund (EDF) laid out today in a new report [PDF] on the industry. In fact, EDF found, transit bus companies share enough skills and regional foothold with the auto industry -- the map of bus makers pictured above could be mistaken for a map of automakers -- to pave the way for fuel-efficiency advances that would ultimately benefit all vehicles.

After noting that 32 percent of American transit buses do not rely on gas or diesel to run, today's report continues:

The bus industry serves as an important entry point for advanced vehicle technologies, especially in new vehicles that require refueling infrastructure and other major changes. For instance, since transit agencies have a well-defined base of centrally managed fleets, they are ideal for testing and proving plug-in hybrid and all-electric buses — thus leading the way for the passenger car industry.

While U.S. bus companies are well-positioned proving grounds for cleaner-burning vehicles, their export potential remains low, according to the EDF report. That's largely because the largest market for transit buses is China, where demand is expected to grow by 12 percent annually over the next decade -- double the projected growth rate in North America -- and where production standards are markedly lower.

"Emerging countries’ lower technology levels and standards appear to prevent them from competing in industrial country bus markets, while industrial countries’ higher production costs and standards appear to prevent them from competing in emerging country markets," EDF concluded.

Even so, there is a limited opening for bus supply companies to prosper on a global level. About 12,000 of Indianapolis-based Allison Transmission's 14,000 sales have come in China, and Firestone, which produces bus suspensions, has operations in China and India.

Yet it's the domestic employment and growth potential of bus makers that is the ultimate subject of EDF's report, which notes that such potential "is heavily dependent on the availability of public funding for bus transit." And at a time when labor unions are pushing the job-creating power of federal funding for operating costs, EDF's findings represent the other side of the coin -- the role transit money plays in sustaining manufacturing jobs many miles away from the cities where local networks operate.

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