New Jersey political stalemate over gas tax puts Winnipeg bus firm in tricky spot

WINNIPEG – A Winnipeg-based bus manufacturer says an order from New Jersey’s transit system has been put on hold following a state of emergency declared by Gov. Chris Christie due to funding problems.

New Flyer Industries says its MCI subsidiary had received approval in May for the delivery of 142 motor coaches this year — part of an order for up to about 1,200 buses over six years.

But funding for New Jersey’s transit projects dried up after Democratic leaders in the state senate refused to support a deal on gasoline and sales taxes that had been reached by the Democrat-led state assembly and the Christie administration.

The Republican governor, a former rival of Donald Trump for the Republican presidential nomination, later declared a state of emergency and last week released a list of transportation projects that would be shut down across the state for at least seven days.

New Flyer says New Jersey Transit has advised the company, one of North America’s largest bus manufacturers, that there must be an orderly shutdown of all work for the bus contract.

The Manitoba bus company says it’s working to understand the impact of New Jersey’s funding disruption on Motor Coach International, which New Flyer bought last year from an affiliate of KPS Capital Partners for US$455 million.

New Flyer president and CEO Paul Soubry says MCI will soon begin its annual three-week annual summer shutdown and the company hopes that will provide “sufficient time for the funding situation to be resolved.”