Diamond Bus North West

[Winston]

RE: Diamond Bus North West

(13/07/2019 22:30)gilesbus1 Wrote:  They will struggle with vandalism then as its in a poorly lit area, so having it vacant is a recipe for vandalism. In any case would it not just by simpler at the end of the day to run Vantage for Rotala out of Bolton again were you've a bigger potential staff resource and the workshops to deal with vehicles that are specialist and complicated?

I effectively think though with Vantage the fact that FirstGroup is being sold, they will not be able to last the timetable of the contract if they cannot sell it on, as presumably First West Yorkshire were it will be managed from will be sold very quickly due to its profitably, therefore meaning it can't be managed from anywhere effectively. The tenders they have separate to Vantage at sometime will come to an end and it can't be possible to place a bid to operate them profitably when the base is so far away from Bolton, even Oldham is closer theoretically to operate them from. So those contracts will be lost by First. Suspect now Vision Bus is in an excellent position to win work around Bolton as Diamond's overheads will be much higher and Vision's a lot lower. Like First Manchester its likely Diamond now will start to lose work considering there higher overheads of wages, fuel and staff, they have no possible way of reducing them seeing it has to start lending vehicles from FirstGroup and then commence a heavy vehicle replacement plan, so they will like First mainly just end up operating commercial work within Bolton itself, the Wigan work will find its way to Stagecoach over time, seeing as its closer to Leigh and has half a garage vacant at Wigan and has workshops that are as big as Bolton's if not bigger. Also routes like the 132 were not abandonded by Stagecoach but by First so if the dead mileage from Eccles kills it, I am sure Stagecoach will be happy to take them on.

I never suggested Rotala would run Vantage out of Atherton should they bid successfully, I simply said that Atherton may be initially retained in the event that additional depot capacity is required. As Bolton depot is superior to any other NW depots, that's why it's becoming Rotala NW headquarters.

TfGM want Vantage re-tendered. That's why it wasn't included in the sale to Rotala.

Yes overheads will be higher, but so will the number of buses generating income, it's all proportional. The Atherton routes being shipped in to Bolton are replacing spare capacity from the loss making Vantage contract & TfGM school buses. Once the Bolton purchase goes through, Diamond NW will go from mainly low margin tendered work to majority of it's revenue/profit being generated from commercial work which *should* eventually be far more profitable once the business is sorted out. That can then be used to subsidise and maintain competitive tender bids if desired, Diamond WM is still heavily involved in tendered work, I don't see the NW being any different. If Quality Contracts come in, bidders may be tendering for complete packages of routes rather than just individual route tenders, which may work in the favour of bigger operators like Diamond & Go North West that have plenty of finance to draw upon over your Vision Bus etc. I don't see where fuel comes in either, for the reasons mentioned above. Even more so with the heavy vehicle replacement plan which will result in lower engineering costs, lower fuel costs due to being micro hybrids/Euro 6, these buses will also come with the Low Emission Bus Certificates which will make them eligible for low emission grants.

I'm sure Rotala will have looked at all the potential scenario's and run the numbers before making the decision to buy First Bolton, close Atherton, plus the knock on effect of moving that work to Bolton & Eccles, with potential dead mileage involved etc. I doubt they're not going to suddenly give up all the original Diamond NW tendered work, just because they will soon have First Bolton's commercial routes, they want to expand/not contract. I think you need to let the takeover happen and bed in first, before trying to predict the future.