‘We’re not going anywhere’: $50 million loan from province to help New Flyer with supply chain issues

One of Manitoba’s largest employers is getting some assist from the provincial authorities within the type of a $50 million business mortgage to assist maintain the corporate operating whereas it offers with provide chain and inflation points.

The NFI Group – which owns each New Flyer Industries and Motor Coach Industries in Winnipeg – is the most important bus producer in North America. NFI employs 7500 individuals worldwide, 2500 of that are Manitobans.

The mortgage announcement was made Friday at New Flyer’s new product improvement facility. The mortgage might be given at business charges with the expectation that will probably be paid again inside 12 months.

“NFI is well-positioned to capitalize on the transition to green transportation technologies. We’re creating opportunities for Manitobans today and into the future,” stated Economic Development, Investment and Trade Minister Cliff Cullen on the announcement.

“To have three levels of government supporting a critical business like ours is really a strong message,” stated Paul Soubry, NFI president and CEO. “It’s a strong message to our customers, to our suppliers … and most importantly to our employees.”

Supply chain points have majorly impacted the bus producer, in line with Soubry. He stated a scarcity of elements has compelled stock build-up in any respect of their manufacturing services. Unfinished buses are sitting idle whereas they anticipate elements.

“While it’s now starting to come down, we peaked at almost 500 vehicles built, then offline,” stated Soubry. “Every one of those vehicles is about half a million dollars, so that’s $250 million in cash tied up that we can’t complete because we didn’t have the parts.”

However, he added that demand has by no means been larger for his or her product.

“Our total backlog, now that’s both firm orders and options, is now five billion – that’s a ‘b’ – billion dollars,” stated Soubry.

He stated they’ve greater than 4,000 items at the moment on order from transit providers in Toronto, Vancouver, New York, Philadelphia, and plenty of different cities throughout North America.

Soubry stated their clients have been very understanding, and that no orders have been cancelled regardless of the delay.

“We’ve had an unbelievable ride, and an unbelievably terrible ride since COVID began in March 2020, which then led into global supply chain challenges,” he stated.

NFI has misplaced near $300 million for the reason that pandemic started. Soubry stated the corporate has needed to renegotiate monetary phrases with its banking companions six occasions over two years.

“This support comes at a critical time in that we have incredible and unprecedented demand for our vehicles, and there is tremendous support from all levels of government for public transportation,” stated Soubry.

In addition to the $50 million provincial mortgage, NFI may also be getting some assist from the feds. Export Development Canada might be offering $50 million (USD) in credit score for accounts payable assist, and $100 million (USD) in credit score to assist safe bids for brand new work.

“NFI is a shining example of a Canadian company that’s working a better and a cleaner environment while creating good jobs and contributing to a strong green economy here in Winnipeg,” stated Dan Vandal, the federal minister answerable for Prairies Economic Development.

Cullen stated it is not the primary time the province has lent cash to NFI.

“I did look back in terms of previous loans with New Flyer group. It goes back to 2002, there was a $20 million loan to New Flyer, repaid. In 2004, $15 million, that was (a) U.S. dollar loan, again repaid by New Flyer,” stated Cullen. “So it’s certainly not something out of line that the government of Manitoba would support New Flyer or any other industry that finds themselves in these types of situations.”

Soubry stated he’s grateful to everybody concerned for the assist.

“This is massive in terms of sending a message to our people, to our suppliers, and to our customers – we’re not going anywhere.”