New Flyer sends 90 jobs to Kentucky to meet U.S. content rules

Winnipeg-based bus manufacturer New Flyerwill lay off 90 people and move the jobs to Shepherdsville, Ky., to deal with increasingly tighter Buy America regulations.

New Flyer Industries president Paul Soubrysaid Buy America rules passed in 2015 under the U.S. Fixing America's Surface Transportation (FAST)Act demanded 60 per cent U.S. content in buses sold to American municipalities that received federal subsidies.

That grew to 65 per cent in 2017 and will reach 70 per cent next year.

The company employed a number of strategies to avoid layoffs in Winnipeg as the content rules became even more stringent, but it had to move some work south to meet the latest requirements, Soubrysaid.

"Unfortunately, we don't have a choice. It is not a decision to try and reduce costs. It's all about getting U.S. content," Soubrytold CBCNews.

The transfer of the work begins this month;the reduction in Winnipeg staffstarts with notifications to staff in January 2019 and staggered through to August.

Soubry hopes there will still be a way to keep some of the staff facing layoffs, although he admits it won't be easy.

"As they get notices, there will be bumping and so forth with seniority inside the Winnipeg collective bargaining agreement, and we will look for other opportunities to try and do something to save the jobs, which is going to be very difficult. The natural attrition of the workforce may be able to absorb some people that we can move into our facility," Soubrysaid.

New Flyer operates facilities in several U.S. states and Canadian provinces, with approximately 2,800workers and its headquarters in Winnipeg.

The companywas founded in the cityin 1930 and isthe largest transit bus and motor coach manufacturer in North America, with the majority of its sales in and 90 per cent of its revenue from the United States.

The company bought out another Winnipeg manufacturer Motor Coach Industries in 2015.

• New Flyer buys Motor Coach Industries for $604M Cdn

Soubryexpressed relief that the recently renegotiated North American Free Trade Agreement did not change rules that would affect New Flyer, but said the company still has to cope with regulatory changes in the U.S.

The workers affected by the move to Kentuckywere "effectively building the brains of the bus," and the transfer of jobs "is a tough one to swallow," Soubry said.

"It's unfortunately 90 people. That's a lot of jobs and a lot of families we are talking about. The good news is we still have something like 2,800 people here in Winnipeg, and that is where we are going to focus."