School Buses Head for U.S. From Nation That Brought You the Yugo : East Bloc: The terrible reputation of the Yugo hasn’t deterred a Van Nuys company from its intention to distribute Yugoslav-built buses.

First came the Yugo, the pint-size car built in Yugoslavia that has been called “the worst car in America.”

Now get ready for a bus from Yugoslavia.

A Van Nuys company, Transportation Alternatives, has entered a joint venture to distribute Yugoslav-built school buses in the United States. The joint venture, called TAM/USA, is a partnership between the transportation design firm, and Tovarna Avtomobilov, which says it is Yugoslavia’s largest manufacturer of buses, trucks and engines.

Tovarna, however, is not the same company that manufactures the trouble-ridden Yugo cars.

Plans call for the creation of a premium, U.S.-certified, 40-foot-long school bus that will be sold in California and other Western states, according to a press release distributed by David L. Kimport, a San Francisco attorney who said he put the deal together. First delivery of the buses is expected in late 1991, Kimport said.

One challenge, will be overcoming the negative publicity about vehicles made in Yugoslavia because of the Yugo’s poor reputation. But Kimport insists that the Yugoslav buses will meet all safety requirements.

Ned Einstein, president of Transportation Alternatives, would not comment on the joint venture, saying only that plans are in the formative stages.

Kimport said the joint venture is being financed with about $8 million in start-up capital from Transportation Alternatives, Tovarna and Yugoslav banks. The new bus--if it hits the roads here as planned--would be the first U.S.-made bus to shuttle children to classes in the United States, said Kimport and industry sources.

The buses will be manufactured at an existing plant in Yugoslavia and will be competitive in price with American buses, which typically run about $100,000, Kimport said. He said he expects the joint venture to produce about 300 buses in the first year.

He said the buses will contain design and safety features “never before available in U.S. school buses,” such as anti-explosive fuel elements (to keep the fuel from blowing up), tubular-frame passenger bus chassis (other school buses are constructed on truck chassis, he said) and pneumatic air bag suspension, a luxury coach feature.

Tovarna Avtomobilov produces $350 million worth of vehicles and engines a year, Kimport said.

Jack deKruis, chairman of Wayne Corp., a Richmond, Ind., bus manufacturer, said he is skeptical of TAM/USA’s ability to meet rigid safety standards and other specifications imposed on bus manufacturers in the United States. But if the new company does meet the standards, deKruis said, “they can compete with us. It doesn’t worry me.”

Karen Finkel, executive director of the Springfield, Va.-based National School Transportation Assn., a trade group, said, “I think they’ll have some trouble breaking into the market.” About 30,000 school buses are sold each year in the United States, Finkel said, and that market is dominated by five domestic manufacturers.

But Kimport said there is room for new companies in the bus business, particularly because many states are talking about requiring school buses to be replaced after they are 10 years old.