Express Coach Builders are expanding - but not too much
The classic tale of Goldilocks and the Three Bears was not so much about a blonde-headed vamp breaking into someone’s house, stealing food and getting away scot-free, but it was more about right-sizing.
Goldilocks wasn’t keen on porridge that was too hot or too cold, but she did like porridge, so opted for a bowl pleasing to her palate, and she knew something about comfort, not happy to sleep in a bed that was too small or too big, but settled into something comfy to meet her vagabond dimensions.
Express Coach Builders is something of a family of accommodating bears from the famous fable: friendly, with a determined outlook, offering a refined range of buses that fits their niche of not being too big, or too small — but just about right.
And ‘Papa Bear’ Paul Hoffman — known as ‘P1’ to the folks at home in Macksville — is keen to keep his enterprise the right size, and the products his company offers in the right shape, with some modest growth planned.
“The smaller manufacturers at the moment are doing quite well, more so than the larger manufacturers,” Hoffman says.
“If you look at the order books of Coach Design, Coach Concepts and P&D, they’re very healthy, as is ours,” he says.
“But if you talk to Volgren and Customs, they are treading water at the moment.”
Hoffman feels that the larger builders have focussed too heavily on the government market.
“There are only a couple of governments that have forward planning for future demand,” he says.
“Western Australia looks 10 years out, and they build every 12 months which is perfect for a manufacturer so you know what to set up. And in South Australia it’s very similar, but smaller.
“But if you look at State Transit in NSW, Action in Canberra or Metro in Hobart, they might have a major need all of a sudden.
“I don’t know why some governments can’t do their planning because they will know the average ages of their vehicles, and they know how many vehicles they have to replace every year to meet the average age.”
Express has steered clear of relying on government contracts too heavily, and looked to growth areas across the states.
A particularly buoyant region in terms of public transport — and hence bus growth — is in the Bellarine Peninsular area around Geelong in Victoria, down along the Great Ocean Road as far as Warrnambool.
“A lot of people are moving out of Melbourne and moving down that way for lifestyle reasons, and there’s a very good rail and bus network in the region,” Hoffman says.
The task of finding the growth areas and building relationships with key operators in these regions is taken on by Hoffman himself.
He makes a point of difference between his operation and those of the larger bus builders, proudly attesting to the lack of a national sales representative at Express.
“We look after our customer base, and how that base grows outwards,” he says.
“We track growth, and understand it.”
Among Hoffman’s best customers is McHarry’s in Geelong.
“We’ve been fortunate to work with them for a long period of time, and for the past 10 years they have bought about 70 of our vehicles, and another 16 going through this year,” he says.
Out of the 16 on order, 10 are for growth, which means McHarry’s takes about a quarter of Express Coach Builders’ annual 60-unit production average.
Given that Express Coach Builders is located at Macksville on the New South Wales north coast, and McHarry’s is tucked away south west of Melbourne about 1,400km away is no impediment to access.
Hoffman sees his Macksville location as a benefit, more in terms of what the business can attract by way of a loyal, willing, and highly-skilled workforce, combined with his view that ‘distance is no tyranny to business these days’.
Macksville is located halfway between Sydney and Brisbane on the Pacific Highway, situated on the Nambucca River in a picturesque valley that is experiencing slow and steady growth to reflect its mixed interests in farming, manufacturing and ‘lifestyle’.
It’s a pleasant place to be, unspoilt by such social detriments to a regional town as mining has proven to be further north in Queensland, where places like Mackay have struggled socially when the boom came too quickly, creating two societies, the CUBS — unkindly referred to by some as cashed up ‘bogans’— and the rest, being the original townsfolk, struggling with high housing prices, soaring education costs and artificial inflation created by the so-called ‘boom’.
Macksville has no such problem. In fact the reverse is more the case, with its lifestyle attraction of a subtropical climate, equidistant access to two of Australia’s three largest cities, and the steady availability of training and employment, thanks largely to Paul Hoffman.
“I think regionally you can do business with your employees and find your employees somewhat easier than you can in the capital cities because there’s less competition to draw away your workers,” he says.
Express ranks about third largest in terms of people employed in the Nambucca Valley area.
“We are 10 minutes from the beach, there are three major high schools in Nambucca Valley, and trainees and apprentices are a critical ‘lifeline’ for our business,” he says.
BATTLING BUREAUCRACY
Hoffman places great store in local training, so much so he waged a five-year ‘war’ with NSW Government bureaucracy to get a training package approved for the local region.
The bus building apprenticeship package was offered in most other states, but not in NSW.
“We would put on 10 apprentices every year, hoping you would keep five tradespeople at the end,” he says.
“We looked at the available training packages.”
Hoffman inquired about the nationally accredited Bus, Truck and Trailer apprenticeship package, delivered in in each mainland Australian state, and the Northern Territory, except NSW.
Why it wasn’t accessible to Express Coach Builders was due to a lack of a NSW Vocational Training Order (VTO) number.
Without a VTO the package wouldn’t be funded by the NSW education department, he explains.
Hoffman took on the state and federal jurisdictions to get the package into NSW, battling bureaucracy for five years.
Politics peculiar to NSW saw a roadblock caused by union dysfunction where the federal body of the Australian Manufacturing Workers Union (AMWU) endorsed the package, while the NSW branch didn’t.
Without NSW AMWU branch endorsement, the package would not be funded by the State’s education providers.
From 1999 to 2004, Express Coach Builders relied on more traditional apprenticeship areas of boiler making and metal fabrication to provide the required skills for the business.
Hoffman sought to have North Coast TAFE provide local training in bus building, with apprentices spending 70 percent of their time on the factory floor at Macksville, but couldn’t without the VTO.
After much letter writing, and the formation of a business cluster in the region also requiring apprentices in truck, trailer and bus building, the group took on the NSW Government, led by Hoffman as chairman of the cluster, and finally the VTO number was approved, and funding followed.
BUSINESS MENTORING
Just as Hoffman has mentored many apprentices over the years, he has also been mentored beyond his technical skills in bus building to lead a prosperous enterprise as its general manager.
Express Coach Builders started in August 1995, springing from the ashes of a broken engineering business which started at the same Macksville site two decades earlier.
There was a big demand for general engineering when Hoffman started his apprenticeship at the site back in the late 1970s. Given Nambucca Engineering built the occasional bus mixed in with logging trucks and other haulage vehicles, Hoffman already had a specialisation in bus building by the time the firm went bust in the mid-1990s.
Hoffman could see the potential to start something new by focussing just on buses, and turn a ‘jobbing’ shop into a production line.
Having surrounded himself with ‘good people’ he took a calculated risk to redirect his career as a business owner, as well as bus builder.
Hoffman pays tribute to founding director and business mentor Lloyd Ilett, a veteran of the Australian corporate world who sadly died relatively recently in May 2011.
Ilett was best known for his role as a director with Buderim Ginger on Queensland’s Sunshine Coast. A testament to Ilett’s fortitude was that he was also one of Australia’s longest living liver transplant patients.
Ilett marketed Buderim Ginger across the globe, and through mutual friendships was attracted to the new bus business venture at Macksville.
As the chair of Buderim Ginger, Ilett had transitioned the company from a private to public corporation, and applied the same process at Macksville with Express.
“Buderim Ginger was a bunch of cooperatives coming together, where everyone knew what they wanted, but no-one knew how to do it,” Hoffman says.
But even though Express Coach Builders has remained a private company, Ilett’s approach was to set it up with the transparency and diligence of a public corporation.
“When you run a business like a public company you are accountable to the shareholders,” Hoffman says.
“Lloyd would always say that if you don’t plan, you plan to fail, and if you don’t measure it, how can you manage it.”
The Ilett family through Lloyd’s widow Carla has retained co-directorship, with fellow founding director Mark Forster, and Paul and Carol Hoffman as the third in the triumvirate of owners.
Given the path and principles established by Lloyd Ilett, the remaining directors are confident of the way forward, embarking on modest expansion, with plans in place to reorganise the original McKay Street site — landlocked in the centre of town — and expand an existing facility owned by the business located about 4km south of the Macksville town centre.
The Kylie Street property sits inside the rapidly expanding Upper Warrell Road industrial estate. The newer factory is currently used for bus finishing but not for chassis modification or space frame construction. That first step — for the moment — is still done at McKay Street, as is the final finishing, while fit-out — auto electrics, flooring and such, is done up the road. From October this year the complete bus assembly process relocates, as do the administration staff, to the larger, expanding site, while ‘special’ niche projects, such as high-end luxury motor homes, corporate exhibit-style buses for trade shows, and the soon to be built ‘Red Kidney Bus’ dialysis unit vehicle, stay at McKay Street.
“Speciality vehicles is a side business we’ve developed, but we haven’t pushed the buttons on it yet as its own division,” Hoffman says.
Much of the speciality work comes via recommendation from Volgren and Customs.
“Anything that doesn’t fit on their production line, they ring Express Coach Builders,” Hoffman says.
But even with the expansion plan in progress, Hoffman sees general manufacturing, including buses, as having a ‘D’ date, as more Australian manufacturing goes offshore.
“We’re a boutique manufacturer with a very good client base. We work hard at maintaining that,” he says.
“So we need to move from two factories to one factory to streamline our production.”
With up to 12 vehicles in build at a time, Hoffman is not looking to do anything more than a dozen or so extra units a year. In fact large orders can be problematic for Express.
“You can only do what your production line allows you to do,” he says.
“And there is a measure to every business.”
He says the secret is keeping the business small, and finding the ‘sweet spot’ in the business, which is something he and Ilett spent a lot of time on during the first few years of operation.
“Look after the customer and look after production and you will have a good business,” Hoffman says, referring to one of Ilett’s business principles.
“Lloyd would say it’s always the little things that bring you the biggest reward, and he was right.”
But what of the bread and butter that keeps Express Coach Builders happy, contented and very much employed?
Given the client base is predominantly large regional operators looking for a multipurpose vehicle, Express has specialised in building a combination low-floor bus which is also used to service school contract work.
The ‘combo’ bus meets the NSW Government’s ‘Type B’ school bus criteria, which means operators are required to offer their bus to general public route operations outside of contracted school runs — hence the requirement for a multifunction vehicle with disability access for those requiring it, and storage bins often required by schools.
Express also build a dedicated school bus, and dedicated low-floor route bus, as well as a rarely advertised large coach — the latter built on request for long-term clients.
Hoffman says he doesn’t usually accept orders to build large coaches from new customers, only for long-established customers, and even then he might refer them on to another builder.
He knows his niche, and is prepared to settle in it, tweak it, work the ‘sweet spot’ and grow in incremental steps with products such as the combination ‘Type’ B route and school bus, which — at the end of the day – epitomises the Goldilocks principle.
It’s not one or the other, but somewhere down the middle. And that’s just how Paul Hoffman and his customers like it.
The Goldilocks Principle
Often used in narrative, the Goldilocks principle uses the ‘rule of three’ where the middle ground option is sought to find a path forward in the story. But not just confined to literature, Goldilocks has entered into economics jargon.
A Goldilocks economy is a ‘not too hot or cold economy’, sustaining moderate economic growth with low inflation — much like Australia’s current conditions — allowing for a market-friendly monetary policy. The term was first coined in 1992 by Salomon Brothers share trading executive David Shulman.