For Immediate Release

For more information contact:
Steve Kratzer
Marketing and Business Development Representative
steve.kratzer@optimabus.com
316-779-7700 ext. 344

HYBRIDS COULD FUEL PARK CITY BUSMAKER

Wichita, KS – January 16, 2005 – Economic development leaders are touting the need to diversify the Wichita- area economy, and they think they found one way to do it with Optima Bus Corp. The Park City maker of trolleys, and 30-foot and 35-foot buses has its sights on manufacturing the first commercially viable 30-foot, low-floor hybrid-e lectric bus, in part thanks to two $100,000 loans from Sedgwick County and the Kansas Department of Commerce.

"This is a big deal for Optima Bus Company," chief executive Michael Monteferrante said. "We expect sales to blossom because of it."

The company predicts $40 million in sales this year and expects that number to double by 2008. Monteferrante predicts that hybrid bus sales will be 40 percent of Optima's total sales by 2009.

Optima already has added a couple of engineering-related positions for the new hybrid buses, and expects to add 250 new employees to its 140-employee base over the next five years. Those hires will start in 2006.

Optima has to repay the $100,000 county loan, but the state loan would become a grant if the hiring objectives are met.

"It's part of what we do to try and encourage the growth of companies," said Steve Kelly, the commerce department's business development director and deputy secretary. "We do take seriously this idea that it's important for us to grow existing companies."

So does the county, said former County Commissioner and new state Sen. Carolyn McGinn.

"We need to continue to nurture industries that we already have here," she said. McGinn said she's particularly impressed with how Optima continues to reinvent itself.

"They have a good potential for continuing to grow and expand their business," McGinn said. "They're bringing jobs to town."

The Greater Wichita Economic Development Coalition, which is made up of county, city, state, area chamber and private business representatives, hired a consultant to determine how the area could diversify.

"Obviously, we're looking to diversity beyond aerospace," said Dave Wood, vice president for economic development at the Wichita Area Chamber of Commerce.

Wood said the consultant pointed to the automotive and technology sectors as areas where the region could naturally expand.

"This was a fantastic opportunity," Wood said of Optima's hybrid project.

Development of Optima's hybrid bus is a $1 million-plus venture that Monteferrante said couldn't be done without county and state support.

"They rapidly came on board with the logic and the understanding and the value," Monteferrante said.

There may be other benefits besides Optima's sales and employee growth. For instance, for its first hybrid bus, Optima transported one of its traditional buses to San Diego, where ISE Corp. -a supplier of hybrid-electric systems and software for large buses and trucks - is retrofitting it with the hybrid package. But for future buses, Optima will buy the hybrid parts - 10 different subassemblies in all - and build the entire bus here. And eventually, some of the hybrid parts manufacturing could move to Wichita.

"There is a possibility that one or more of those subassemblies could be manufactured in Kansas," said Michael Simon, ISE's chairman.

He likes the geographically central location of Kansas. Optima officials point out the cheaper cost of doing business here, particularly for labor.

Simon said: "The Optima operation could be a catalyst for us to expand our company's presence in the Midwest and in Kansas in particular."

Why buy hybrids?

Optima will sell its hybrid buses for more than $400,000, compared with $275,000 for gasoline- and diesel-fueled buses.

So why would anyone buy one?

For starters, Optima officials say, there's a 25 percent to 50 percent fuel savings over the 12-year, 500,000-mile life of the bus.

"It's very important that . . . the United States become energy-independent," Simon said. As technology advances, the hybrid buses could be upgraded to use hydrogen or other technology, he said, and be even less fuel-dependent.

"That can completely eliminate our dependence on foreign oil," Simon said.

Hybrid technology is gaining popularity, he said, because lower emissions make it environmentally friendly.

"It's becoming very rapidly a nationwide trend," he said. "For society at large, (it's) a good investment."

Also, Optima officials say, hybrids offer the advantage of quicker pickup for drivers because electricity provide sinstant torque, and with it, faster acceleration. With diesel engines, there's a lag before the torque gets built up. In some cases, hybrids can be quieter inside and out, they say.

Simon expects hybrid fuel economy to rise as technology advances. He said production costs should lower, too.

"It's important for companies like Optima to get in on the ground floor," Simon said. "Optima will be at the top of the heap in 10 to 20 years when this really, really takes off."

Without hybrid technology, Monteferrante said, "our competition will eat us up."

He said it's estimated that in 2005, more than 300 hybrid buses will be manufactured - most being 40-foot buses. That's out of 6,000 buses, ranging from 27 to 40 feet, that will be sold by seven companies in the transit market.

Optima expects its hybrid prototype to be ready by April. Then it will undergo testing and travel to trade shows and various West Coast states, where hybrids are especially popular. The company hopes to simultaneously test its new hybrid bus and win customers. It already has several interested buyers.

"Optima's not just sitting and waiting for something to happen and hoping that it will be good," the chamber's Wood said. "They actually go out and make good things happen."

NOW YOU KNOW HOW IT WORKS

There's a four-step process to power a hybrid-electric bus such as the one Park City's Optima Bus Corp. is starting to make.

Here's a simplified version:

-- A diesel engine, when running, powers a generator.-- The generator produces electricity that charges ultracapacitors, which are similar to a car's battery and store electricity. The generator also sends electricity to the motors.-- Every time the bus brakes, it creates electrical energy to be stored in the ultracapacitors.-- Electric motors draw energy from the capacitors to drive the axle.

- Carrie Rengers, The Wichita Eagle