Locally made trams a retooling opportunity for former car makers?

From the IWW website :

European Tram Makers to Gain From U.S. Streetcar Push
http://www.nytimes.com/2008/11/12/business/worldbusiness/12trams.html?_r...

November 12, 2008
European Tram Makers to Gain From U.S. Streetcar Push

By JOHN TAGLIABUE
PARIS — America may have invented the streetcar, but Europe perfected it.

As gas prices soared and dozens of North American communities sought to reintroduce electric streetcars as an alternative to diesel buses, Europe’s tram builders were some of the biggest beneficiaries.

Now, as the administration of President-elect Barack Obama contemplates an infrastructure expansion to keep Americans working through a severe slowdown, trams may be one of the building blocks of economic revival and energy efficiency.

“Trams were invented by the Americans,” said Jean-Noël Debroise, vice president for product planning at Alstom, the French streetcar builder that is selling its sleek Citadis tram to cities like Houston and Toronto. “It’s a big market,” he said.

European companies like Alstom, Siemens of Germany, AnsaldoBreda of Italy, CAF of Spain and Skoda of the Czech Republic will be at the head of the line. They, along with non-European companies like Bombardier of Canada and Kinki Sharyo of Japan, are among the leading suppliers of streetcars, which are also known as light rail vehicles.

“If we get a program funded at the federal level, a lot of cities will be expressing interest,” said Jeffrey F. Boothe, a Washington lawyer specializing in public transport. “At the end of the day, only lack of federal money was stopping them.”

There are still plenty of obstacles to overcome, especially as state and local governments struggle to sell bonds during the credit market slowdown.

But that has not stopped the Europeans from watching one of the few fast-growing markets in the world: the United States. In the second quarter of 2008, use of public transport rose by 5.2 percent, while light rail use jumped 12.3 percent, according to the American Public Transportation Association.

As of last year, almost 1,800 miles of tramways were operating or planned in American cities.

In May, Siemens, the market leader, landed a $277 million contract to supply streetcars to the Utah Transit Authority. The vehicles will be ready for service by 2012 and will be built at a Siemens factory in Sacramento.

This year, Siemens signed a $184 million order for a new light rail line in Denver.

“The Denver development was not atypical,” said Oliver O. Hauck, president and chief executive of Siemens Transportation Systems. “We began with an initial, small order” that eventually mushroomed into a substantial commitment. Siemens first delivered eight streetcars to Denver in 1993; the last order was for 55 cars, and Mr. Hauck expects more.

But the recent financial turmoil threatens the market. Cities and other local governments have been effectively shut out of the bond market. At last month’s annual gathering of the American Public Transportation Association, discussions ran hot and cold.

“At one level, the gathering had the highest attendance ever,” said Mr. Boothe, who took part. “At another level, as you talked to friends, everybody was looking at stock values.”

American contracts have served as a crucial support for Europe’s tram builders, offsetting a slump in domestic markets. They are largely shut out of markets in Eastern Europe and Asia, which are controlled by local competitors. And Western European countries are close to saturation.

A recent survey for the Association of the European Rail Industry by the Roland Berger consulting group forecast annual growth of about 1 percent for European light rail over the next decade, against more than 10 percent in North America.

Most European cities, even those with extensive subway systems, also rely on trams. For American cities, trams are increasingly seen as an alternative to far more expensive underground systems.

Siemens started the North American tram rolling in 1975, when it signed deals to deliver modern streetcars to Calgary and Edmonton in Alberta. Five years later, it delivered its first tram cars to the United States, to San Diego.

“We supplied an existing European product, an imported vehicle,” Mr. Hauck said, “though from then on, we increased local content.”

Obstacles abounded for the European manufacturers. For one thing, the Buy American Act required that 60 percent of a tram car, by value, come from the United States. Siemens, to meet the requirements, opened an assembly line in Sacramento.

“We are now at 70 percent local content, with a potential for 90 percent,” said Robin Stimson, a Siemens vice president.

Siemens has trams operating in Charlotte, N.C.; Houston; Norfolk, Va.; and many other cities.

Other European players have made the market increasingly competitive. The Czech Skoda group (no relation to Volkswagen’s Skoda subsidiary) has delivered trams to Portland, Ore., and Tacoma, Wash., and is now bidding for a contract in Toronto.

AnsaldoBreda of Italy, an affiliate of the Finmeccanica group, has delivered streetcars to Cleveland; as well as San Francisco and Los Angeles.

Construcciones y Auxiliar de Ferrocarriles, or CAF of Spain, has supplied transit systems in Pittsburgh and Sacramento.

Apart from the market for trams, Alstom, a large French conglomerate best known for making the high-speed TGV and Eurostar trains, has sold subway cars to several American cities, including San Francisco, Chicago and Washington.

Though the Federal Transit Administration manages a $1.6 billion program for light rail, little of it, subject to complex distribution conditions, has been distributed to streetcar construction under the Bush administration. Financing has come mainly from local communities.

Federal spending on light rail systems totaled $473.4 million last year, after $935.7 million in 2006, according to the transit administration. “Cities opt to build locally, and eschew federal money,” Mr. Boothe said.

That is likely to change under the incoming Obama administration. But other obstacles remain.

Trams in America travel at higher speeds than their counterparts in Europe, because they usually operate over longer distances, connecting city centers with suburbs, rather than circulating in downtown areas.

To reach the 60 percent local content level, some manufacturers, like Siemens, have opened factories in the United States; others have hitched up with local partners. Skoda, for example, assembled trams for Portland and Tacoma, in conjunction with the Oregon Iron Works, near Portland.

Competition is fierce. Bombardier of Canada knows the American market well. Kinki Sharyo of Japan, an affiliate of the Kintetsu Corporation, has supplied trams to the Santa Clara Valley Transportation Authority, south of San Francisco; to Hudson-Bergen Light Rail in New Jersey; and to the Sound Transit Central Link in Seattle, which will begin carrying passengers next year.

Cities that want copies of old-fashioned trolley cars, like Charlotte, Little Rock and Tampa, have acquired them from the Gomaco Trolley Company, a unit of the Gomaco Corporation, an Iowa-based maker of construction equipment.

But the Europeans say their order books are growing.
http://transportworkers.org/node/933