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Is an Italian rail company taking L.A. for a ride?

AnsaldoBreda Inc. is promising much in order to keep building light-rail cars for the MTA, but is it all going anywhere?

March 25, 2009|TIM RUTTEN

Los Angeles Mayor Antonio Villaraigosa hopes this week to persuade the Metropolitan Transportation Authority's board to disregard the recommendations of its professional staff and executive director and give an Italian firm a new shot at building cars for the system's light-rail lines.

AnsaldoBreda Inc., an international manufacturer of rail cars, has a contract to build 50 cars for the new Gold Line extension, and options to build 100 more in a deal potentially worth $300 million. MTA officials, however, say they don't want to exercise the options because the company is three years behind schedule delivering the first 50, and those they have completed are 6,000 pounds overweight. That means they will waste electricity and be expensive to run.

For The Record
Los Angeles Times Thursday, March 26, 2009 Home Edition Main News Part A Page 29 Editorial pages Desk 3 inches; 148 words Type of Material: Correction
Train cars: An Op-Ed column by Tim Rutten on Wednesday about a bid by AnsaldoBreda Inc. to build rail cars in Los Angeles cited an article in the Contra Costa Times from "just one year ago." In fact, the article was from March 14, 2007. The column said that a recent study of the AnsaldoBreda proposal had put the number of new jobs that would be created in L.A. at 530. It should have noted that that number referred only to jobs filled by people directly hired by the company; counting indirect jobs that would be created, the number is over 2,000, according to the study...CX: Also, the column said that in bidding for contracts in Madrid and Miami, AnsaldoBreda had promised to build local plants and then never built them. The column should have made it clear that the company ultimately did not win the contracts in those cities.

As The Times' Maeve Reston reported Monday, MTA chief Roger Snoble wants to put the next 100 cars out for new competitive bids. He and others point out that with the falling cost of raw materials and effects of the global recession on other rail car manufacturers, the agency is likely to get a better price and speedier delivery from a new contract.

The Italian firm has hired the well-connected Democratic lobbyists (and former aides to President Clinton) Chris Lehane and Mark Fabiani to rescue its contract, and says that if its option on the next 100 cars is renewed, it will build them at a new plant in Los Angeles. That facility, moreover, will be constructed by Shangri-La Construction, which, the firm is eager to point out, is owned by environmentally minded financier Stephen Bing. It doesn't point out that Bing contributed $100,000 to the mayor's campaign to elect three school board members and $50,000 to his failed solar power ballot initiative.

The great inducement being proffered here -- the one that might reasonably tempt officials to overlook AnsaldoBreda's abysmal performance on its current contract -- is the company's promise to build the $70-million plant to assemble rail cars in a new "green" manufacturing zone around the old Crown Coach site in the Alameda Corridor. The firm has not only said it would build and staff the facility with unionized workers but that, according to AnsaldoBreda officials, the facility would generate "thousands of jobs." If it gets the rest of the MTA's business, the firm also has promised to move its U.S. headquarters to L.A., which would create an additional 126 well-paying jobs.

This is where things get interesting. First of all, a study commissioned by the Los Angeles County Federation of Labor, which strongly supports the new facility, puts the number of new jobs at 530 -- not thousands. Even more telling is the fact that AnsaldoBreda already has a plant in California. It's located in the East Bay community of Pittsburg, and that's where -- among other things -- the firm has been assembling the Gold Line cars it has yet to deliver. That plant employs just 67 people: three executives, 28 white-collar employees and 36 blue-collar workers; 19 of those are temps.

Now consider this: Just one year ago, company officials there told the Contra Costa Times that they hope "in the next five years to secure contracts to build or repair 500 cars in the East Bay, creating hundreds of jobs in the city in the next decade. ... AnsaldoBreda plans to complete all [emphasis added] of its work in the Western United States in Pittsburg, and is now moving its U.S. corporate headquarters there from New York ... said Michael Pracht, the company's executive vice president."

It's equally interesting that when AnsaldoBreda was fighting for rail contracts in Madrid and Miami, it promised to build local plants it never constructed in either place, according to MTA officials. Anybody else see a pattern here? And what's with this portable corporate headquarters? Do these guys work out of a trailer?

The point is that the Obama administration has set this country on the road to a long-overdue green retooling through its economic stimulus package. L.A. County, by passing Measure R, and the state of California, by voting in Proposition 1A, have established dedicated funding sources for rail. Over the next 20 years, this state is going to lay more track and buy more rolling stock than any other state in the nation. Los Angeles, meanwhile, desperately needs new unionized jobs that pay decent wages and benefits. Put those things together and projects like extending the MTA's light-rail lines are going to attract a queue of sharp operators and lobbyists greener than last week's St. Patrick's Day parade.

Here's a good rule of thumb for resolving not only the AnsaldoBreda controversy but all the many like it we're about to see develop: Any time you see a proposal that creates more jobs for lawyers and political consultants than it does for working men and women, you've probably gone down the wrong track.

--

timothy.rutten@latimes.com

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