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Delays May Derail Stimulus Funding for Amtrak Railcars
Delays May Derail Stimulus Funding for Amtrak Railcars
Stalled production shows struggles of foreign companies to comply with made-in-U.S. guidelines
By Bob Tita
robert.tita@wsj.com
@bob_tita
Updated April 10, 2016 7:58 p.m. ET
A Japanese company hired to build new passenger railcars for regional Amtrak service has fallen years behind schedule and likely won’t complete the order before federal funding expires. ... The stalled production undermines an ambitious plan to upgrade Amtrak service in California, Illinois, Michigan and Missouri and has highlighted the complexities foreign companies face in complying with made-in-the-U.S. requirements. Funding for about three-quarters of the 130-car order is tied to the American Recovery and Reinvestment Act of 2009.
To help U.S. manufacturers recover from the recession, the stimulus bill required the cars be built entirely in the U.S. with domestically sourced components and materials. The stimulus-funded cars must be completed by September 2017 and missing the deadline would result in any unspent money for the cars being redirected by the federal government.
....
Sumitomo Corp. of Americas, the U.S. subsidiary of the Japanese financing and manufacturing conglomerate, underbid two other car builders in 2012 to win a $352 million contract to assemble the 130 double-deck railcars. But assembly work by Sumitomo’s longtime partner, Nippon Sharyo USA Inc., was suspended last fall after it was unable to comply with U.S. design requirements.
The tight restrictions on when and where the stimulus money can be spent left Nippon Sharyo with almost no room for error with a car model that it hadn’t built before and a brand-new assembly plant 80 miles west of Chicago that cost $100 million. ... Crashworthiness of passenger railcars has been a primary focus of car designers since collisions involving commuter and freight trains in Southern California killed 11 people in 2005 and 25 people in 2008. Nippon Sharyo’s car hasn’t been able to pass a federally mandated test for absorbing rear- and front-end compression force generated in a crash.
Stalled production shows struggles of foreign companies to comply with made-in-U.S. guidelines
By Bob Tita
robert.tita@wsj.com
@bob_tita
Updated April 10, 2016 7:58 p.m. ET
A Japanese company hired to build new passenger railcars for regional Amtrak service has fallen years behind schedule and likely won’t complete the order before federal funding expires. ... The stalled production undermines an ambitious plan to upgrade Amtrak service in California, Illinois, Michigan and Missouri and has highlighted the complexities foreign companies face in complying with made-in-the-U.S. requirements. Funding for about three-quarters of the 130-car order is tied to the American Recovery and Reinvestment Act of 2009.
To help U.S. manufacturers recover from the recession, the stimulus bill required the cars be built entirely in the U.S. with domestically sourced components and materials. The stimulus-funded cars must be completed by September 2017 and missing the deadline would result in any unspent money for the cars being redirected by the federal government.
....
Sumitomo Corp. of Americas, the U.S. subsidiary of the Japanese financing and manufacturing conglomerate, underbid two other car builders in 2012 to win a $352 million contract to assemble the 130 double-deck railcars. But assembly work by Sumitomo’s longtime partner, Nippon Sharyo USA Inc., was suspended last fall after it was unable to comply with U.S. design requirements.
The tight restrictions on when and where the stimulus money can be spent left Nippon Sharyo with almost no room for error with a car model that it hadn’t built before and a brand-new assembly plant 80 miles west of Chicago that cost $100 million. ... Crashworthiness of passenger railcars has been a primary focus of car designers since collisions involving commuter and freight trains in Southern California killed 11 people in 2005 and 25 people in 2008. Nippon Sharyo’s car hasn’t been able to pass a federally mandated test for absorbing rear- and front-end compression force generated in a crash.
Some background:
Nippon-Sharyo wins contract for the 130 bi-levels
Started by afigg , Sep 27 2012 11:04 AM
Posted 27 September 2012 - 11:04 AM
The news is out this morning that Nippon-Sharyo in partnership with Sumitomo Corporation has been selected to build the 130 corridor bi-level cars at their new plant in Rochelle, IL. The bid was only $352 million, well below the amount allocated by the FRA grants, although I'm sure there are overhead, training, and spare parts costs built into the HSIPR and CA allocated amounts. With the low price per unit, exercise of options to buy more cars if Nippon-Sharyo can deliver satisfactory cars on the initial order is likely.
Chicago Tribune AP article on the breaking news.
Started by afigg , Sep 27 2012 11:04 AM
Posted 27 September 2012 - 11:04 AM
The news is out this morning that Nippon-Sharyo in partnership with Sumitomo Corporation has been selected to build the 130 corridor bi-level cars at their new plant in Rochelle, IL. The bid was only $352 million, well below the amount allocated by the FRA grants, although I'm sure there are overhead, training, and spare parts costs built into the HSIPR and CA allocated amounts. With the low price per unit, exercise of options to buy more cars if Nippon-Sharyo can deliver satisfactory cars on the initial order is likely.
Chicago Tribune AP article on the breaking news.
This is a crashworthiness video: