Sunday, May 30, 2010

BY JOAN VERDON
THE RECORD
STAFF WRITER

Mark Jordan is steering his family’s 53-year old bus company in a new direction.

Last September, the Jordan family made the difficult decision to sell the school bus company, which serves 25 districts in five counties and has annual sales of about $11 million, to Student Transportation of America (STA) of Wall, the nation’s third-largest school transportation company.

The arrangement keeps Mark Jordan, 35, in place as the president, while allowing his parents to cash out of the business and take retirement, although Arthur, 80, who founded the company in 1975, still comes to the office most days.

It also gave Jordan Transportation the buying power and clout of being part of a larger company, while keeping the same management, drivers and level of customer service. And it allows Mark Jordan to offer North Jersey districts a school bus stimulus plan. STA has a pool of $100 million available to buy the fleets of districts that want to get out of the busing business, and leave the driving to companies like Jordan.

Jordan grew up in West Milford and lives in Sparta with his wife and two daughters. (Interview condensed for space.)

Q. Why did you make the decision to sell the company to STA?

It was a family decision. I’m the only sibling involved in the business and my father turned 80 years old in September. It was an emotional decision, but we figured that as far as generational planning went, and for their retirement, it was best to seek an outside company to come in so they could ride off into the sunset. I’m still young enough and had the knowledge of the business, so we were able to retain management and it worked well for everybody.

Q. Why STA?

We had considered others, but their reputation in the business is excellent. The CEO, Denis Gallagher, and his father, have deep roots in New Jersey as a family bus operation. My family has known their family for many, many years. They were based in Wall, but they had bus terminals all over, one as close as Lincoln Park. So we were both competitors and allies in the private days. Their management style, their philosophy of making targeted acquisitions of good-running operations and then letting them continue to operate the way they did prior to the acquisition was one of the reasons we decided.

Q. You were able to keep all your employees after the acquisition?

Literally nothing changed, besides some internal procedures on how we do accounting and pay bills. The name on the buses is still our name. I’m still the president and figurehead if you will, and all of our staff is still here. Change was a concern for our customers as well, because many of them have been in districts where another company has come in and bought a smaller operator and told them nothing would change and but a lot did change. For our customers, after they got notice of the transition, when they called, and either my father or myself answered the phone, for many of them that was enough to know that everything was OK, and they had no other questions.

Q. What’s happening with your school district clients? Are people cutting busing?

Everybody’s budgetary constraints are difficult this year. Courtesy busing seems to be the first one cut, because it’s a service they provide that’s not mandated by the state, nor is it paid for by the state.

Q. Do you think the impact on busing is still to come, or has most of it happened already?

I think it’s still to come. New Jersey had a lot of school budgets defeated, so now you have the town councils involved. Transportation is a big ticket item on the budgets. It’s a very costly expense, so they are certainly going to look at it. One thing – and this was something I didn’t have access to as a private owner – STA has is a stimulus package where they have $100 million dedicated to school districts to help them if they’re considering converting their own board-operated transportation department.

Q. Would that money go to buy the district’s fleet?

Correct. There are many facets to it, but that’s the crux of it. We had a school district in Connecticut where the $830,000 that was given to the district in exchange for buying their vehicles literally made the difference between that board of education having to lay off teachers that year or not having to lay off teachers.

Q. When you take over a district’s busing, do you keep their same bus drivers?

Yes – same vehicles, same drivers, same routes. That’s the goal, keep everything uniform.

Q. In New Jersey, how old are school buses allowed to get?

Most buses have to be replaced after 12 years. There are some buses that are eligible for 20 years, but most operators or districts don’t purchase those buses, because they are more expensive. The vast majority would be 12 years.

Q. What happens to old school buses?

Typically, they go to auction. Some get sent to the junkyard. They typically get sent out of the country, to South or Central America, because they can use them as commuter buses down there. They don’t typically go to another state because the specifications for school buses are different in every state and it would require too much retrofit to utilize it somewhere else.

Exec Access appears every Sunday. E-mail: [email protected]

Mark Jordan is steering his family’s 53-year old bus company in a new direction.