Chinese railcar company putting down roots in Springfield

Printed from: http://newbostonpost.com/2015/09/04/chinese-railcar-company-putting-down-roots-in-springfield/

Written by Andy Metzger

SPRINGFIELD — The site of a failed casino bid in Springfield will find new life as China’s largest railway manufacturing corporation sets up shop to build MBTA subway cars and eventually seek work for other transit agencies.

CRRC, a state-owned company also known as China Railway Rolling Stock Corporation, beat out all competitors for a $566 million contract to build Red and Orange line cars after a bidding process that required final assembly in Massachusetts.

“Sometimes you just get credit for stuff that just happens on your watch,” said Gov. Charlie Baker, who said he was “thrilled” to be at the groundbreaking Thursday and said he looked forward to working “to make CRRC a real powerhouse here in the United States of America.”

The new trains will have environmentally friendly air conditioning systems, LED lighting and regenerative braking, Baker said.

The contract was awarded under the Patrick administration and Transportation Secretary Stephanie Pollack said it was a wise move to forgo federal dollars to enable a Massachusetts manufacturing requirement.

“A lot of folks are in the early stages of gearing up to do what we’ve done in Massachusetts, and I’m actually quite happy we’re sort of in line ahead of them because there’s limited capacity,” Pollack said. She said, “If you use federal funding you cannot specify manufacturing in your state” and said in addition to the local construction and manufacturing jobs the project will give the MBTA an opportunity for “close oversight” of the assembly.

Pollack said many other transit agencies around the country have cars that were built in the 1970s, offering future business opportunities for CRRC and allowing the corporation to demonstrate on-time, on-budget quality production of the Red and Orange line cars.

“The Springfield train factory is the first ever Chinese investment in high-end railway transportation” in the United States, said New York Chinese Consulate General Commercial Counseler Yi Liu, who predicted “more orders to Springfield” as other transit agencies around the country seek cars. Chuanhe Zhou is the president of CRRC USA Rail Corp., the company’s American subsidiary.

Pollack said CRRC is well insulated from China’s recent economic troubles because the company has a steady stream of revenue. Pollack said CRRC is seeking certification in New York, which holds the nation’s most extensive subway system, to be an eligible provider.

CNR, which won the manufacturing contract, merged with China CSR Corporation, another major state-owned Chinese railcar manufacturing firm, to form CRRC, which was officially created June 1. China Business Review, the publishing arm of a trade association for American companies doing business in China, reported that CRRC is valued at $26 billion.

According to the New York Times, the merger between two companies that had been split apart in 2000 created controversy in China because CRRC supplied 80 percent of freight and passenger cars there.

The contract calls for 152 Orange Line vehicles and 132 Red Line vehicles. A CRRC diagram of the planned facility shows expansion areas and rail leading off the site.

Rick Sullivan, who was Gov. Deval Patrick’s secretary of energy and environmental affairs and later chief of staff, said Penn National did demolition and engineering on the 40-acre parcel in its plans to build a casino there.

Springfield Mayor Domenic Sarno chose instead to negotiate a host-community agreement with MGM, which plans to start construction on its downtown casino soon. Sarno told reporters that when he selected MGM he envisioned something like CRRC’s facility in the industrial park.

The twin developments in a city that has struggled in economic development means Springfield will soon be home to two international corporations and CRRC plans to place its U.S. headquarters there. Penn National now operates the state’s first slots parlor, Plainridge Park Casino in Plainville.

Sullivan, who is now president and CEO of the Western Massachusetts Economic Development Council, said CRRC have been “really good partners,” have met with local businesses and there may be opportunities for local manufacturers to be part of the railcar manufacturer’s supply chain.

Sullivan said being able to establish a headquarters and manufacturing center in Massachusetts was part of the reason why CNR offered such a competitive bid.

“Being able to get that beachhead was very important,” Sullivan told the News Service. “I think you will see them be aggressive in the markets, not just here in Massachusetts, but really the entire Northeast in particular.”

The $95 million 220,000 square-foot facility and 2,240-foot test track in Springfield is expected to create 100 construction jobs and employ 150 people.

“This is part of our $2.7 billion in economic development going on in the city of Springfield,” Sarno told reporters. He said average pay would be about $66,000 per year “and up.” He said the city is training students in science and technology starting in middle school and said, “having the world’s largest railway company come to the city of Springfield for manufacturing, precision manufacturing was tremendous.”

Dan D’Alma, president of the Pioneer Valley Building Trades Council, said under a project labor agreement with CRRC, which was not mandated by the state contract, the construction will be “100 percent” union and the union would represent workers at the assembly plant. D’Alma said CRRC wanted the work done well, on-time and without any work stoppages, which led to the agreement.

State officials have identified a lack of workers skilled in advanced manufacturing, even as many seek work. A Springfield resident, D’Alma said the union would provide training.

Rep. Carlos Gonzalez, a Springfield Democrat, noted the state has provided job training funds, which Gonzalez told the News Service would go to colleges and training centers among other recipients. Aside from the MGM casino, Gonzalez estimated that the last major development on a scale of the CRRC facility in Springfield was the Bay State Medical Center. D’Alma said the casino construction is also a union job and estimated construction there would start in late winter or spring.

Lamont Clemons, a Springfield entrepreneur, said he is excited about the opportunity to potentially provide painting work and energy procurement to CRRC.

“A company like this, of this size, is going to be doing a lot of different things,” Clemons told the News Service.

The site once housed the Stevens-Duryea automobile plant, “the first mass produced auto plant in the United States,” according to CRRC, and was later home to the Westinghouse manufacturing center.

The city is also home to the corporate headquarters of Peter Pan Bus Line, which ferries travelers around the Northeast and was founded in Springfield in 1933.

Lydia Rivera, a former MBTA spokeswoman who served as program host, said CRRC visited more than 50 sites and determined the Springfield lot was “the right fit.”

Construction is set to begin next spring, with plant production scheduled for 2018 and the first cars completed in January 2019.

Josh Ostroff, of Transportation for Massachusetts, said the new subway cars would be “hugely important” for reliability and comfort of commuters, and would help in allowing trains to travel with greater frequency.

“The old cars are highly unreliable after years and years of service well past their useful life,” Ostroff said.

Red Line cars date from between 1969 to 1994 and the Orange Line fleet dates to 1981, according to the Conservation Law Foundation.

“We’re talking about upgrading the aging Orange and Red line fleets,” said Baker, who recalled something Pollack had told him during the relentless snow that pounded exposed stretches of Red and Orange lines out of service last winter. He said, “You know, a lot of those Red Line trains out there, they were running during the Blizzard of ’78, the same cars. Think about that. That’s a long time ago, folks.”

Under the midday early September sun, Weiping Yu, vice president within CRRC, greeted Baker with a hug and by telling him through a translator that, “Our mood is as good as the sky today.”

The CRRC executive told reporters, through a translator, that the company is interested in communicating with other cities, but the MBTA work is the priority.

Credited with development of high-speed trains in China, Yu also expressed hope that the company’s high-speed train will one day be in place in the area.

“I certainly believe that’s an initiative that’s worth pursuing. We wouldn’t be fixing Union Station if we didn’t think so,” Baker said when asked for the potential of high-speed rail to the area. He said the state has “a lot of work to get our act together” on the MBTA and noted the recent opening of a rail station in Holyoke that he said “hadn’t been opened in 50 years.”

Copyright State House News Service