A $2.8 billion acquisition has allowed an international private school bus company with regional headquarters in Vancouver growth at the local level.
On Oct. 1, Scotland-based First Group bought out Illinois-based Laidlaw International Inc., an acquisition that brought together the two top private school bus operators in the country.
First Group is the parent company of First Student, for which the West Coast headquarters are located in Vancouver.
With the acquisition, First Student went from a fleet of 22,000 buses to 62,000, now operating in 39 states and two Canadian provinces with 70,000 more employees. Combined, the companies have an annual income of $2.5 billion.
Worldwide, First Group brings in $10.6 billion annually.
“The western third of the country has grown quite a bit for us since Oct. 1,” said Cal Hull, senior vice president of operations for the western area.
The growth has allowed for four or five new positions added to the current staff of 10. The Laidlaw office near Westfield Vancouver Mall will close, likely in December, and some staff will begin working at the new 3,504-square-feet First Student office at Mill Plain One’s Park Tower I, 201 N.E. Park Plaza Drive.
The regional office had been located at Mill Plain Boulevard and 120th Avenue. The lease was up, the staff was growing and the company was ready to upgrade the quality of its surroundings.
The assumption that public school districts operate their own bus services is common – and true.
“Many do take care of their own busing, but they have options,” Hull said.
Districts may contract out for services, such as busing, janitorial or food service, and about 25 percent to 30 percent of school districts nationally contract out for their bus service.
Locally, First Student has contracts with school districts in Battle Ground, the Puget Sound, Spokane and across Oregon.
But Battle Ground will soon have to find another bus service.
The Battle Ground School District had been a long-time Laidlaw contract, and as part of the federal antitrust review process that safeguards against monopolies, First Student can’t handle the contract past December.
Nationally, the company will forfeit contracts for about 800 buses, including a contract in Rochester, Wash., and 75 buses in Seattle.
First Student executives were actually expecting to lose more contracts, Hull said.
Private school bus companies get business two ways: They wait for a school district to solicit requests for proposals or they aggressively market themselves to a district.
The latter is a slow process, and the number of times companies are successful is probably quite low, Hull said.
Contracts are awarded primarily on pricing and services.
Large companies are able to buy buses in volume – in some cases at 25 percent to 30 percent less than a district that may only buy one or two buses a year will pay.
“The decision to move from doing your own busing to using a private company is a difficult issue for districts,” Hull said. “They’ve been using their own employees, and it’s a very public issue – school districts are operated by elected officials who want to make sure they’re doing the right thing.”
They’re also able to sell that bus transport is their specialty, whereas school districts are in the business of educating children, and First Student is able to bring in technologies districts may not be able to afford, such as GPS tracking on buses and students.
“We get many calls a day from parents wanting to know where their kids are,” Hull said. “We can tell them when and where they got on and off a particular bus.”
First Student, then School Bus Services, came to Vancouver in 2000 from Gresham.
Hull lives in Vancouver, as did several employees at the office, and it made more sense to run the headquarters on this side of the river, he said.
Laidlaw had reorganized itself after filing for Chapter 11 bankruptcy, and had been positioning itself for acquisition, Hull said. They were the parent company of Greyhound, which First Group now owns, but Greyhound will keep its brand name.
