NJ Transit Advises MCI to Suspend Manufacturing of Commuter Coaches Until Funding Resolved
Motor Coach Industries (MCI) has announced that MCI received notice from New Jersey Transit (NJT) that "requires an immediate and orderly shutdown of all ongoing work" under a contract to build commuter coaches.
MCI was awarded a contract by NJT in November 2015 with a firm order for three commuter coaches and options for an additional 1,219 over six years. After delivering three pilot coaches which successfully passed the in-service testing and evaluation phase, MCI received a Notice to Proceed in May 2016 for the first year's production of 184 commuter coaches, of which 142 were to be delivered in calendar year 2016.
NJT advised MCI that the replenishment of the New Jersey Transportation Trust Fund Account (TTFA) has been delayed. Accordingly, Governor Chris Christie issued Executive Order No. 210 declaring a State of Emergency and directing the Commissioner of the Department of Transportation and the Executive Director of the NJT to plan an immediate and orderly shutdown of all ongoing work that is funded by the TTFA. In accordance with the Shutdown Order issued by Dennis J. Martin, Executive Director of the NJT, all contract work financed by TTFA funds must begin an orderly shutdown.
"As of today, MCI has delivered five coaches to NJT with an additional 76 currently in various stages production or completed and in transit," said Paul Soubry, president and CEO. "We value MCI's long-term relationship with NJT and are working cooperatively and diligently to understand the impact of this funding disruption." Soubry further explained "MCI will shortly commence its annual three week summer shutdown and we will synchronize an orderly shutdown of NJT production to coincide with it and we hope this will provide sufficient time for the funding situation to be resolved."
The additional 61 commuter coaches to be delivered in 2016 that have not yet commenced production represent just under 2% of the total combined New Flyer and MCI annual bus manufacturing schedule for 2016. The company cannot predict at this time whether this issue will cause the Company to adjust its annual production guidance.
