US-Based HSR Supply Chain Comes Together
Last week I wrote about how HSR train manufacturing could provide a long-term boost to California’s economy. On Friday we received news that the federal government, along with the states of California and Michigan, are already thinking along these lines. US Transportation Secretary Ray LaHood announced that 32 companies had committed to building a US-based HSR “supply chain” to not just assemble the rail cars, but to produce some of the parts and other supplies here in the US as well:
As the Obama administration and Congress keep a close eye on jobless numbers and the shrinking American manufacturing base, Transportation Secretary Ray LaHood said today that 32 rail companies that have promised to expand U.S. operations if they are chosen to help states build high-speed train networks….
“If this program is perceived as not creating American jobs, it’s not going to succeed,” LaHood said, urging attendees of today’s high-speed rail conference to focus their attention on workers “who have been hardest hit by the recession.”
Several states, including Michigan and California, have looked to emerge from the pack of high-speed rail pitches by proposing to convert shuttered auto plants into train manufacturing facilities.
“If you look at the Buy American provisions of the stimulus act, that means we’re going to have to build the rail cars in the United States,” Michigan Gov. Jennifer Granholm (D) told Detroit’s WJR radio station in July. “It means we’re going to have to build a whole supply chain around those rail cars.”
A complete list of the companies that have promised to build part of that supply chain in America, if their state-level partners are singled out for high-speed rail money by the U.S. DOT, [can be found here].
What this means is that HSR will create genuine jobs for Americans, at a time when we desperately need them. And there’s no reason some of these jobs can’t be based here in California. Some of these companies, like Alstom and Siemens, already have some California operations. Others could potentially be convinced to move operations here. Even if that doesn’t occur, the jobs that HSR will bring will help build even broader support for HSR funding in Congress, and more Representatives and Senators will have jobs and factories in their districts and states that rely on HSR funding to remain afloat.
It’s good to see USDOT getting these commitments early on. We expect them to be honored. HSR can and should be a major part of the more sustainable and equitable 21st century economy.
The supply chain can be far flung except for a few critical parts like bogies and car bodies, which are produced in a few places in the world. Locomotives and cars were and are being produced in plants in the US now. No reason to build plants in California for a few hundred cars. The existing manufacturers can schedule them at the plants that are already operating.
What’s more important and what is the purpose of this project? To create jobs? or is it to find and use the best technology at the least cost? This project is not for creating jobs. That is a side benefit. The goal is to get this thing built cheaply and quickly with the best technology. If that means buy superior existing technology such as the Japanese Shinkansen system, then that is what we should do.
This development is tantamount to protectionism, only voluntary. Like Japan’s self-imposed quotas on car exports to the US, it’s backed by the implicit threat of real protectionism. This means American jobs for the producers, but it also means less competition among vendors and more chances for a screwup.
This was sold to us as a jobs project. jobs in california, for californians, now.
Rafael Reply:
December 8th, 2009 at 8:19 am
Ehm, no. It was sold as a massive transportation infrastructure project with the fringe benefit of large numbers of temporary and permanent jobs.
I realize that jobs are what people want and need right now, but California HSR simply isn’t going to deliver a whole lot of them for another 2+ years. It just isn’t far enough along the maturity curve yet and, any attempt to accelerate the CEQA process by exempting certain aspects will cause more problems than it solves. By the time the trainsets etc. have to be built, California and the nation will hopefully already have pulled out of recession. HSR is the “reinvestment” portion of ARRA, not the “recovery” bit. That’s why only $8 billion out of almost $800 were allocated to HSR.
Short-term job creation will have to come from other aspects of that bill and other government actions. There are projects with completed EIS/EIRs that are languishing for lack of funding, e.g. the run-through tracks for Amtrak/Metrolink at LA Union Station. I believe the BART extension to Santa Clara and SMART up in Sonoma/Marin are essentially in the same boat. Amtrak California, SF Muni, LA Metro, Metrolink, NCTD etc. probably also have minor but shovel-ready projects that are merely awaiting funds. Add to that the many bus operators around the state.
There are also lots of uncontroversial, small-scale infrastructure projects that could generate construction jobs in short order: fixing potholes, upgrading sewage treatment plants, expanding purple pipe networks for non-potable recycled water, seismic retrofits for legacy wooden buildings in areas of high seismic risk (e.g. East Bay), clearing brush and cutting fire breaks in forests near populated areas, improving trails in state and national parks, etc.
Andre Peretti Reply:
December 8th, 2009 at 8:19 am
Kawasaki and Alstom have their plants in New York state. Would they have to duplicate them in California?
This really seems like a non-issue. Either the manufacturers would retool and expand (if necessary) their existing plants in the US or they would open new plants in CA. As has been done around the world and here in the US when new railcars are procured, some of the initial cars will likely come from overseas. The plants don’t have to be complete manufacturing facilities, and most of the internal parts are going to be manufactured overseas anyway. We’re talking about assembly plants more than factories – screwdriver shops. The “Buy American” portions of the ARRA aren’t a new development, they aren’t really meaningful, and they probably aren’t even enforceable.
And we’re not talking about a large number of white collar jobs either, the design and engineering of these vehicles is still going to be done overseas. For the most part we’re talking about good construction and manufacturing/assembly jobs, and the vast majority of those are going to be in the construction portions.
If this system has any effect on high tech engineering jobs in CA, I would expect it to come later as a result of a American companies looking to take advantage of a new market for rail cars in the US.
Rafael Reply:
December 8th, 2009 at 10:05 am
Agreed, the vast majority of new jobs related to getting California HSR up and running will be in the civil engineering sector, i.e. with the companies responsible for earth moving, constructing grade separations and stations, installing OCS and signaling equipment, production and logistics of tunneling spoil and ring segments, cement production etc. The HSR-specific superstructure ought to be primed by experienced foreign companies, with local subcontractors.
Similarly, the trains should be designed and their construction supervised by companies that know what they’re doing. US or California companies can subcontract in that effort.
The primary objective has to be delivering a high quality transportation system that will provide useful service for decades. No matter what the politics may be right now, job creation must be a secondary consideration for the safety-critical aspects of the system.
O/T: EPA declares greenhouse gases to be hazardous to human health, effectively extending the Clean Air Act beyond local and regional to global impacts of airborne emissions. More to the point, since CO2 emissions are directly linked to carbon inputs, it de facto extends EPA’s remit to the fuel economy of all types of vehicles, electricity generation, industrial processes, space heating and cooling etc. This announcement has been several years in the making, especially since the state of California’s Air Resources Board demanded the right to curtail the CO2 emissions. EPA has actually been reluctant to take this step, which in theory gives the executive branch a way to impose climate change policy without Congressional ratification of an international treaty.
If Pres. Obama orders EPA to actually draft new rules to curb GHG emissions from US sources, there will be an immediate bureaucratic turf war with USDOT and the IRS, which manage CAFE standards and federal fuel/gas guzzler taxes, respectively. More seriously, since the consumption of fossil carbon is currently integral to virtually all economic activity, expect numerous lengthy legal challenges and furious lobbying from the industries most affected, especially coal, oil & gas production, refining, automotive, aviation, cement, steel etc. The list is very long.
Another point worth keeping in mind: if Pres. Obama declines to use EPA as a crowbar to force Congress to act, NGOs will likely sue EPA for failing to follow through on its commitment to curb harmful emissions – now including greenhouse gases.
Electric trains running on renewable electricity don’t generate any greenhouse gases or toxic compounds during operation, which makes them the automatic poster child of any new climate policy EPA ends up pursuing within the framework of the Clean Air Act. It could also quickly make them public enemy #1 for the powerful interests dedicated to preserving a lucrative status quo.
Also slightly OT “The Obama administration asked Congress today to give the federal government power to oversee the safety of subways, light rail and other urban train systems.”
FTA also, not FRA.
Rafael Reply:
December 8th, 2009 at 1:27 pm
This begs the question of who has that responsibility today. State governments?
Rafael Reply:
December 8th, 2009 at 1:33 pm
Btw, would e.g. Caltrain be considered a transit system under FTA jurisdiction or a heavy rail system subject to FRA rules? What about safety rules in a right of way containing tracks for heavy freight trains as well as tracks for light rail (incl. non-compliant regional/HSR vehicles)?
Safety rules ought to be based on accident risk not bureaucratic fiefdoms.
AndyDuncan Reply:
December 8th, 2009 at 1:39 pm
I don’t know. I’m guessing they would remain subject to FRA rules like they are today. It sounds like they’re trying to regulate the “non-compliant” systems that the FRA currently doesn’t care about (or have jurisdiction over) like BART. What I’m curious about is what happens to HSR. If CHSRA is building a completely isolated, no track-sharing Shinkansen-style system specifically to avoid running afoul of FRA regs, what happens to them now? Do they get put under the FRA umbrella or the FTA one? Certainly they aren’t “urban” transport, but if the DOT is trying to sweep up the unregulated rail systems, I wonder what they have planned for HSR.
Alon Levy Reply:
December 8th, 2009 at 2:28 pm
Caltrain is FRA-regulated. Everything that is or used to be mainline rail, or has a connection to mainline rail, is FRA-regulated. Even PATH is FRA-regulated.
By setting federal standards and monitoring systems including the backlog of maintenance and safety issues the deficiencies will be brought to light and more funding will have to made available. Its a way for transit agencies to justify getting better federal and state funding and will also create more jobs. So this is a good development.