Local transit officials Thursday recommended the awarding of a $205-million contract for 72 Green Line cars to a U.S.-German team that promises to open a Los Angeles plant that will be the nation's first modern manufacturer of rail cars.
The award to Siemens Duewag Corp., a German company with a Sacramento facility, would create about 200 jobs in California and pump $17 million into the state's economy, company officials said. In its bid for the lucrative contract, Siemens vowed that more than 92% of the rail cars and their components will be made in the United States and 50% of the work will take place in California.
The contract is a first step in converting the declining defense industry to commercial work, Metropolitan Transportation Authority spokesman Michael Bustamante said.
The MTA tailored the contract to encourage a partnership between transit manufacturers and defense-related industries, which have lost more than 170,000 jobs locally over four years. In all four of the competing teams, military contractors paired up with established rail car manufacturers.
"It's very significant in terms of being able to reconstruct the industrial base of this country," said Greg Bischak, executive director of the National Commission for Economic Conversion and Disarmament. "It has the potential to save hundreds if not thousands of jobs."
Others have been less optimistic about the feasibility of such an ambitious endeavor, noting that several defense companies--such as Boeing Co.--had tried years ago to move into transit manufacturing and met with disastrous results. In fact, the failure of those companies scared off many others in the industry.
"It didn't turn out very well because those companies didn't have the background in that area. There's a big difference in doing mass transit cars and jet airplanes," said Larry Korb, a senior fellow at the Brookings Institute.
The key difference with the MTA contract, Korb and others acknowledge, is that the defense companies in this case have joined others that have expertise in the field.
The company that ultimately wins the rail car contract--expected to be awarded June 30--will manufacture 72 standardized light-rail vehicles, similar to the Blue Line trolleys that travel between Los Angeles and Long Beach. The contract also calls for two larger models.
