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Daimler Closing Orion; Setra to MCI

May 7, 2012 in CNG, Hybrids by Rich Piellisch  |  No Comments

OEM Cites ‘Depressed’ Expectations in the Municipal Sector,
Setra Over-the-Road Coaches Going to Motor Coach Industries

(updated June 16)

Citing “depressed” expectations in the municipal sector, Daimler Buses is shutting down the CNG-pioneering Orion bus badge, exiting transit buses in North America after fulfillment of current orders.

Orion saw its first purpose-designed compressed natural gas bus enter service in 1988, and also lays claim to more than 3,000 hybrid buses with series electric drivetrains by BAE Systems.

Buses like this CNG-fueled Orion in Visalia (left) and hybrid-drive Orion in Ottawa are being phased out of production.

As Daimler declared Orion’s demise, it and Motor Coach Industries publicized a Letter of Intent for Schaumburg, Ill.-based MCI to acquire the Setra coach business in the U.S. and Canada and establish a strategic partnership with Daimler.

Orion's hybrids have become nearly ubiquitous on the streets of New York. Olya Bazarnaya photo

Parts and Service to be Maintained

“The companies have agreed upon the material terms and conditions of the transaction and are working to finalize definitive agreements, which they expect to enter and consummate not later than May 31,” states a release. Daimler Buses is to take a minority ownership position in MCI as MCI would become the exclusive North American (U.S. and Canada) distributor of the Setra S407 and S417 motor coaches.

MCI announced an order for 84 CNG-fueled coaches for the City of Los Angeles Department of Transportation last year (F&F, May 30, 2011)

“If consummated, we would intend to fully leverage the capabilities of MCI’s marketing and distribution networks on behalf of the world-renowned Setra brand,” said MCI CEO Rick Heller. “We expect the partnership would also allow MCI access to Daimler’s world-class engineering and manufacturing capabilities.”

As for Orion, Daimler says that as current orders are fulfilled over the coming year, the Orion factory in Mississauga, Ont., will be closed, and its facility in Oriskany, N.Y. maintained solely for parts and field service. Daimler Buses says it stands behind all current customer commitments and warranties.

“Daimler Buses considered all possible options for reconfiguring our transit bus operations in North America, but at the end of the day, Orion is facing a situation where the cost position is not competitive, the local market is in a continued slump, and growth opportunities are not available from selling the product overseas,” Daimler Buses chief Hartmut Schick said in a release.

Promise of a new Orion Bus website was live at orionbus.com at least until June 16

“Discontinuing production of Orion buses was a very difficult decision for us to make, but to secure our leadership position we must always strive to invest resources efficiently in support of our global strategy for growth,” Schick said. “We will make sure a robust parts and service infrastructure continues to provide a high level of service and support.”

A new Orion Bus website had been in development – and, a new Orion VIII bus had been Altoona-tested, an industry source told F&F.

Daimler Buses says it sold 39,740 buses and coaches worldwide in 2011, grossing 4,418 million euros – upwards of $5.8 billion.

MCI Offers CNG and Hybrid Coaches

MCI last year recorded a $59.2 million order for 84 CNG coaches for the City of Los Angeles Department of Transportation (F&F, May 30, 2011). An option for 11 was exercised, and all 95 have been delivered. The 40-foot, 49-seat coaches have 8.9-liter ISL G engines from Cummins Westport, and Type III CNG fuel cylinders from Structural Composites Industries/Worthington-SCI.

MCI's D4500 CT Hybrid coaches employ the Allison Ep50 parallel drive.

MCI has factories in Winnipeg and in Pembina, N.D. It operates six sales and service centers in the U.S. and Canada and a repair facility in Loudonville, Ohio, plus a 360,000-square-foot parts distribution facility in Louisville, Ky.

MCI’s D4500 CT Hybrid coaches employ the Allison Ep50 parallel drive.

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