Michael Melaniphy stands before the Indiana University bus he drove in college in what he refers to as a ?first date photo.?
Motor Coach Industries’ (MCI) vice president of the public sector, Michael Melaniphy, got started in transit not for a familial history in the business or a love for all things bus. No, it was a matter of applied economics when he was in college.
“It was the highest paying job on campus at Indiana University,” says Melaniphy with a smile.
In fairness, Melaniphy went to Indiana University specifically to study transportation, which at the time was one of the few transportation schools in the country. And he is proud to say that his degree in transportation was paid for by transit.
“I put myself through college [driving a bus]. Highest paying job by far in school was driving the bus, so that’s what I did. If it had been bagging groceries, I would probably be doing groceries right now.”
While in college Melaniphy worked in transit as a summer intern for the county department of transportation (DOT), a job which he thinks is essential for people entering the industry.
“I’d say to the young people, get that early stuff. Go out and do it. Do transit counts. Ride buses. Or clean buses. Do something at least tangentially related to the transit industry.
Because as we do hiring and as a senior manager who hires people I look at that stuff and go hey, they really made the effort early on.”
Melaniphy looks back at that time as a series of life lessons and skills he still uses today. He even maintains a valid CDL and can still drive a bus!
Melaniphy’s transit industry journey started in the public sector. After leaving college he worked for then ATE Management & Services Co. (now First Transit) as a consultant because as he deadpans, “clearly coming right out of college I had lots of knowledge to consult other people on what to do.”
Living the nomadic life that most transit executives do, Melaniphy worked in public transit systems across the United States.
He spent time in Laredo, Texas, as a planner and assistant general manager. “Down there we passed our first small system transit tax in the state of Texas. So I learned about elections, learned about politics, learned about operations. I had 92 employees that worked for me. Only a third of the workforce spoke English.”
He then went to Hamilton, Ohio, and became general manager. “It was my first GM job. Small system. You have to do everything. I took buses apart. I ordered parts. I wrote the schedules. Learned how to do run cuts. Learned how to buy buses. Learned how to do politics. All those things. Learned all about MPOs.
“Everybody should run a small system sometime in their career in this industry because you have to do it all. And I have such an appreciation for the rural and small operators across this country that do a thousand things and don’t get paid very well and do it because they love it and what it does for the country.”
From Ohio Melaniphy moved to Wichita, Kan., which he calls a big small system. “Reorganized that whole agency there. Made it much more efficient. Got into building a new facility.
“I learned how to lobby there. And do state lobbying and federal lobbying. That was a great experience.”
And went on to what he calls a small big system in Charlotte, N.C., as general manager. “I was GM in Charlotte for four years and was there when we passed the transit tax.
“I created the umbrella that eventually brought in Ron Tober as the executive director of the new overarching agency and Keith Parker came in as the CEO and then my role changed and it was really time for me to find a new opportunity.”
As Melaniphy explains it, there are two types of general managers in the U.S. transit industry. “There are the guys that are change agents. They come in and change everything. And then there are the guys that are great at running things day to day that refine the agency that bring a calmness to the organization and a long-term view.
“I was never the long-term guy. I was the fix the problem, get out and move to the next problem. I wasn’t good for the agency long term because I loved to change things. And an agency can only do that for so long before they run out of breath.
“And so I would do a three- or four-year stint somewhere, fix the problem, get out, move to the next place and fix the problem because that’s what I thrived on.
Along the way Melaniphy earned his MBA and began looking across the fence at the private side of the transit industry. Having moved six times in 11 years, Melaniphy and his wife were looking to move back home to the Chicago area.
“[I] kind of looked around and said we don’t have a family, don’t have a bunch of friends, don’t get rooted in your community, don’t get involved in your church and a lot of things because you know you are leaving.
“So we wanted to go someplace where we could settle down and stay and [Chicago] is home for my wife and I. So we came here and started a family and all that good stuff. Which has been a great reward.
“And I wanted a place that was based here so as I got promoted I could stay and not have to move. Because that is the gig when you’re a GM of an agency, you want to keep growing and you gotta keep moving to other cities, progressively bigger cities.”
Melaniphy was buying MCI buses in Charlotte at the time and the salesperson at the company asked if he was interested in a job and soon he was selling buses instead of buying them.
“I was a totally different mix. I was a transit general manager. They never had anybody like that doing bus sales,” Melaniphy says.
Melaniphy says he was “scared to death” about switching over to the private sector. He and his wife carpooled while he was in transit and he knew what he would be doing every day.
As he says, “I could run a transit system. I knew how to do it and I was good at it.
“And to go to the other side, on the private side. I thought I knew the business. And I thought OK I can come over and do that. The biggest shock for me was I thought I knew the business.
“I didn’t know the business.”
Melaniphy explains that he didn’t appreciate the business side of the business. He didn’t understand the consequences of what he did as a GM on the public side.
“I look back and I’ll go, ‘I was a mean bastard.’ And I was and I’ll say that publicly.”
He says now it’s almost become a personal crusade to increase the discussion on procurement to get the industry to move forward and develop a partnership instead of the traditional us/them mentality.
“It doesn’t matter which side you’re on there’s always that attitude, go after those guys and get the most you can.”
Motor Coach Industries
Ask Michael Melaniphy about the bus business and he will point to the fundamentals. He says it is very easy to go from a profitable business to a cash flow business, but that it’s in the best interest for the transit industry for all suppliers to be profitable.
“That’s what gives us the ability to service our customers and be innovative and give good customer support,” Melaniphy says.
“If everything is the cheapest way you do it and you wonder why you get a cheap part on your vehicle and it didn’t last as long and the support isn’t there to back it up, it’s because you asked for something as cheap as possible. You did that to yourself.
“Talk to any seasoned general manager out there, rail, bus it doesn’t matter, they will tell you a horror story in their career where they bought the cheapest thing and it didn’t work out in the long run.”
Melaniphy says at MCI they’ve never tried to be the low-cost supplier in the business because that’s not a sustainable model over time. He notes that you still need to watch costs, but just not be the cheapest guy all the time.
Motor Coach Industries has been in the transit industry for more than three quarters of a century and while it is now focused on commuter coaches, it built 30- and 40-foot transit coaches in the company’s history.
Melaniphy says as commuters started traveling longer they had a different expectation of transit service, which in some ways was more comparable to commuter rail.
“High floor. Long-distance ride. High-back seats. Room to move around. Comfortable ride. Long distances between trips. What the commuter coach brings is something very analogous to a commuter rail line,” Melaniphy says.
According to Melaniphy over time MCI’s market has evolved from big agencies to smaller agencies in suburbs bringing suburbanites into cities.
“Look, we’re never going to be a huge volume player in transit,” Melaniphy admits. “We’re always going to be a niche part of anybody’s fleet. Once you get past NY/NJ, we’re always going to be 5 to 15 percent of somebody’s fleet, but for that portion we hit a sweet spot and it’s something we’re very good at.”
MCI hit a bump in the road last year when it filed for bankruptcy, but as of April it had emerged stronger than ever.
“Now we’re out of bankruptcy. We’re solvent,” Melaniphy says. “We have great ownership in Franklin Mutual Advisors. They’re investing in our business.
“We didn’t lose market share. We didn’t lose key suppliers. And we didn’t lose staff to the bankruptcy. Our customers rooted for us. We didn’t lose market share, we actually picked up market share during the bankruptcy. How often does that happen? Our customers were rooting for us. We did what we said we were going to do and we did it on time.”
I asked Melaniphy if there was anything he has learned in his time in transit that he would want to pass on as advice to others and he said, “Take care of the customer first.”
Melaniphy says it’s also important to give back to the business. “We’re very big on giving back because it’s so important to this industry. If you’re not giving back shame on you because it’s important to all of us.”
In the end he says your reputation comes down to your word and your performance. “Do what you say you’re going to do and perform. That’s why people come back to MCI. Our stuff works. It’s reliable. I’m really proud to be part of this company and part of this future.”