NAPPANEE — A Nappanee bus maker’s transition between contracts will cost some workers their jobs.
For the past three years, ABC Companies has been refurbishing coach buses under a contract with Greyhound Lines that was supposed to only last half that long, said Jon Savitz, senior vice president of business development for ABC, which has corporate offices in Minnesota and Florida.
Under the Greyhound contract, ABC has stripped used buses down to their frames and rebuilt them to like-new condition for the inter-state bus line.
"There was never any illusion that it was going to run forever,” Savitz said. “Basically we ran through their fleet of equipment. It was a wildly successful project, but it’s over.”
About 160 jobs will be eliminated with the contract’s end, but Savitz said the company could rehire up to 90 of those workers for a new contract in a different building on the same campus at 504 S. Oakland Ave. The company expects to start production in November building double-decker buses for Scottish bus maker Alexander Dennis. Hiring for that contract, which could entail construction of 75 to 100 buses per year, will begin in July.
"I think there’s going to be a gap,” Savitz said. “I think by the end of the year we’ll need 80 or 90 people (for the new contract) but I don’t know if we’ll be able to walk folks across the parking lot without a little gap.”
Some displaced workers also might find jobs at the Elkhart Ameritrans shuttle bus plant that ABC Companies bought in July 2012, Savitz said. That plant employs about 75.
"We’re meeting with (displaced workers) in small groups and telling them what opportunities there are within our organization,” he said.
The Alexander Dennis contract is set to run for three years from the time production starts, with options to renew. Alexander Dennis will ship the parts for each bus from the United Kingdom to Nappanee, where they will be assembled into finished vehicles. At least 60 percent of each bus must be assembled in the United States to qualify for an exemption from import tariffs under “Buy American” federal regulations, Savitz said.
Nappanee Mayor Larry Thompson said he wasn’t shocked by the development because of the nature of contract work, and he feels good about displaced workers’ prospects to find other jobs in the growing Elkhart area economy.
"There are a number of places around the area that are hiring,” Thompson said. “I think the employees understood. Again, there's some jobs out there. If it's the work that the employees want, that's the question. I hope between work and unemployment that we can get them through the summer."
Thompson said other companies are looking at moving to Nappanee, so that may also help with jobs.
"I don't look at this as all gloom and doom. We've had trouble finding buildings for new businesses who want to move to Nappanee."
Jeff Kitson, executive director of the Nappanee Area Chamber of Commerce, said he was impressed by how interested the company seems in finding the workers new jobs.
"Employees seemed in good spirits at church,” Kitson said. “Employees shook management's hands and thanked them. Speaks volume when employees come up and are thanking you when you've given them the worst news you can give them."
Kitson said the “silver lining” in the situation lies in the skills the workers have developed over the past three years. He said the Nappanee chamber is happy to take workers’ resumes and forward them to other companies.
"We have good, qualified folks that have worked their tails off and may be displaced,” he said, “and this is an opportunity for businesses looking for good, qualified individuals to step up to the plate and grab ’em, so to speak.”
Krystal Vivian contributed to this report.