In what is a bigger comeback than Dame Nellie Melba, Custom Bus has gone from an insolvent shell of a company to a reborn and vibrant new operation in a new factory with a new owner, driving the company forward. Coach & Bus dropped into the new Custom factory in Sydney’s west to sit down with Scott Dunn, the man who bought the operation at the 11thhour and has turned its fortunes around in just a few months
When news broke that the Dunn Group had purchased the remnants of Custom Coaches from administrators and would re boot as Custom Bus, it was fair to say that the industry was taken by surprise.
No one could have picked the ambitious plan by Dunn and its CEO Scott Dunn who had already surprised many by purchasing Sydney operator Telfords a few years back.
Under the weight of an increasing number of, often less costly, imported, completely built up buses; local producers have taken a hit over the last decade. None more so than Custom, which while long revered and respected with a storied history that stretches back more than eight decades, has had a chequered past, having suffered two stints in administration in the past eight years
So what does new owner, the Dunn Group and in particularly CEO Scott Dunn intend to do to make Custom successful again and to break out of the cycles of administration, which have beset the organisation in the past eight years.
Scott started the Dunn Group with a fleet of seven buses, all of them used, in 2009 and the UK operation quickly grew.
“I’d worked for the family bus business, which became a listed company and was then taken over and we sold out, “ he said. “I was freshly divorced, living in a rented house with a pile of debt and I decided to just go for it,” he added.
By 2013 Scott and his new wife had built the operation in Nottingham to a fleet of more than 140 buses operating on a mixture of local bus routes and express coach services across the UK.
Dunn, ever the ambitious and adventurous businessman was rueing the lack of growth opportunities in the UK bus market. After holidaying in Australia in 2012, he happened to notice an ad in the Financial Times in the UK in 2013 announcing tenders for public transport bus contracts in NSW. Dunn applied but narrowly missed out on the tender but realised he needed a presence in Australia if he hoped to win such contracts.
“I rarely read the paper let alone the Financial Times and I just happened to notice this tiny ad, it was pure luck that triggered the entire situation”.
That led Dunn to look at Australian bus operations to buy and It was a year later when the Dunn Group purchased Telfords in May 2014.
The original goal was to win some contracts and expand Telfords from a charter operation but then the opportunity to buy Custom came along it was a matter of seizing the day and taking the chance and it changed Dunn’s entire business focus.
Dunn is at pains to point out that in buying Custom his focus has totally switched and the new plan for Telfords is to build the charter operation and to not pitch for government contracts.
“My intention now is to grow Custom as a body builder and we now have no intention of tendering for future government contracts,” Dunn added.
Scott Dunn smiles when asked how the leap into manufacturing came about.
“I was keeping an eye on the Custom situation and rang the administrator on Thursday evening just eight days before he was due to break the company up and sell the plant and equipment at auction,” said Dunn.
“I had asked him if he had any buyers for the business, and he told me no and that it would be broken up and sold at the auction a week later, I had already thought about it, done the research and had crunched the numbers and made an offer the next day,” he added.
“Blow me down if our offer was accepted and all of a sudden I was a bus maker,” he smiled.
Telfords officially bought the Custom business from Worrells Solvency and Forensic Accountants on the 16 March this year, with the administrators saying the Telfords offer provided the highest return to creditors and achieved the aim of saving the manufacturing business, which was important and integral to the Australian economy.
Running a bus company is quite different from running a bus body manufacturing operation but Dunn believes the same principles apply.
Make the business more efficient, use the latest machinery, develop new products and make sure they are price competitive and deliver the product faster.
To that end the reboot of Custom started with a clean sheet if you like. Dunn found a new factory facility in St Marys and had just three weeks to move the operation from the old Villawood factory to the new location.
It was by all reports a mammoth task. The new facility was a bare shed, big but lacking many of the things needed for bus body manufacturing, including a crane, three-phase power, compressed air, welding bays and all of the other necessary requirements. All of that including removing the overhead crane from Villawood and moving it to St Marys, having engineers build a frame for it and installing it, which all happened in record time.
The first task was moving all of the parts, componentry and raw materials and then the 23 unfinished buses sitting in the old factory. Another major job was putting in the racking and storage to hold the parts and materials.
With a great deal of can do attitude Dunn had bus body manufacturing back up and running at the new facility inside 7 weeks. A remarkable performance and one that points to this dynamic Englishman’s drive and ability.
A re think in the way they do things has seen Custom trim the build time for a bus body from two or three months to just 20 days according to Dunn.
“We have split production into ten phases and each phase takes two days, so that means that a bus will take 20 days to build which is up to a quarter of the time it used to take,” said Dunn.
As well as purchasing the Intellectual Property, all the assets and trading names from the administrator, Dunn has also invested in people. A small number of the original Custom staff came over to the new enterprise but Dunn has recruited hard and has he says reaped the benefit of the new location with a plentiful supply of well skilled labour. The company has around 120 working at the moment.
“If there is a margin in job you will make money, the reality was the at the old management was not managing its people properly and there was too much fat, its all about managing people properly and about controlling costs,” he said.
One of the first things Dunn did was to change all the pay structures and interestingly actually gave workers a pay rise to promote better productivity and pride in the job.
“Efficiency has picked up and we have reduced production hours from around1400 man hours per bus to just under 1000 hours,” said Dunn.
By our calculations that alone has pulled around $20,000 out of the build cost with more efficiency to come according to Dunn.
Custom’s rebirth and its new location will be a boon for apprentices with Dunn determined to train tradesmen and women to create the skilled workforce the company will need, hopefully for a long time into the future. In the short term the new Custom has 20 apprentices about to start their training with the company. Many of the experienced staff who have come across to the new operation started their careers as apprentices with the old Custom business.
Custom’s newly appointed NSW sales manager, Rob Lanteri is a prime example of this as he did his ‘time’ at Custom as an apprentice in the late 1990s and has now re-joined the company as its sales manager, having moved there from a senior bus role with Scania.
Down on the factory floor there is a buzz at the new Custom Bus, workers are hard at it fabricating the side frames on jigs and the roof panels before they’re brought together before being lifted and lowered on to chassis, which have already been prepped for their arrival. The fit out then commences with components and panels fabricated in separate areas alongside the L shaped line.
New computer controlled laser cutting machines have joined others that came across in the big move along with jigs and frames that enable the workers to produce ancillary wiring looms, panels, complex door units, window frames, seat mounts, in fact the whole gamut of bus body manufacturing.
The factory is still a work in progress with a lot more infrastructure and shelving still to come. When Coach & Bus visited the operation a crew was installing a new spray booth alongside the two giant bus paint booths already installed and working. The new booth is for painting various panels off the bus for greater efficiency and quality.
As well as that there is more racking and shelving to come and various improvements to increase productivity.
Dunn’s background as a mechanic and someone who has been around buses all his working life gives him the technical knowledge to understand the process and as much as possible the goal is to vertically integrate and produce as much as they can in house.
“If we had not bought Custom, all this would have been lost, the skill and expertise and as far as I can tell this is the only full scale bus body maker left in Sydney or NSW,” said Scott Dunn.
“Its great to see the skills and the quality that our people are producing and that is the thing we are producing real things and I am very proud of that,” said Scott.
He has built bridges to some of the loyal suppliers who had their fingers burnt with the old Custom and believes it is important economic flow on into NSW and the industries surrounding and serving the operation.
“We are building something here, we are making something and we should be proud of that and we are,” said Scott.
So far since moving into the new operation Custom has turned out 40 buses and Dunn says it is on track to produce 110 buses in the first full year under the new regime, that is just shy of the 120 the old operation turned out in the year before it went into administration.
There is a sparkle in Dunn’s eye when he starts talking about future plans, which he says are extensive and even more ambitious.
“We’ve got some big plans, we are not sitting back and waiting for it all to happen we are at it 110 per cent and determined to make this work,” said Dunn.
Dunn has set himself a punishing schedule in running Telfords and the new Custom. He rises early and is at Telfords before dawn each day working through to around noon when he heads across to Custom where he works through into the evening. On top of that he heads back to the UK every eight weeks for a week to oversee his English operation.
The 44-year-old Dunn exudes confidence and energy and his determination is evident in everything he says.
While many, including the administrator, had pretty much written Custom off six months ago, there is a lot of evidence to suggest that the company has risen out of the ashes and is now a stronger, more nimble and far more competitive operation than ever before. If what Scott Dunn has achieved in a few months can be continued and grown, then the other bus body makers and those importing fully build buses will have a bit to be worried about