The FRA is soliciting bids for a $551 million contract for 130 bi-level railcars. As a condition for the contract, the railcars must be manufactured entirely with American steel and components. If you do the math, that comes to 4.2 million dollars each — double the global market price for a bi-level car.
In other words, the FRA is pissing away a quarter billion dollars. Imagine all the projects that might have been done with $250 million. Imagine all the jobs that might have been created with that money. I’m talking real jobs — not bureaucrats enforcing Made-in-America rules. Jobs like installing new PTC signaling, repairing bridges, or expanding the transit network. You know, things that have tangible benefit to riders.
The really crazy thing is that there is a glut in the passenger railcar market. The last thing needed is yet another product (a hopelessly primitive one at that). And since few operators besides Amtrak will be interested in this railcar, a lot of design and development will just go to waste. And yet, the Commerce Dept. has delusions of making industrial policy:
And this morning, at the Next Generation Rail Supply Chain Forum in Kansas City, Federal Railroad Administrator Joseph Szabo spoke about the importance of bringing rail equipment manufacturers and suppliers together so we can make these parts in America, too–helping support even more American jobs. The forum was held by the NIST Manufacturing Extension Partnership (MEP), a Department of Commerce partnership with DOT to help develop a robust domestic supply base to support our nation’s transportation infrastructure. It was a terrific opportunity to connect manufacturers of passenger rail and locomotives with potential suppliers so we can foster an all-American rail supply chain that produces quality goods and puts our friends and neighbors back to work.
Sorry, but the domestic passenger rail manufacturing is gone. And subsidizing obsolete FRA-compliant rolling stock isn’t the way to re-vitalize it.
I suspect domestic passenger rail manufacturing, like many other types of manufacturing, is coming back to the US.
And, I’d argue there’s almost no amount of money spent in the US manufacturing sector that would not be money well-spent — outside of the defense industry, of course.
It’s not the first time the topic of ‘onshoring’ has been raised recently.
http://economywatch.msnbc.msn.com/_news/2012/04/20/11308730-as-factory-jobs-return-to-us-the-need-for-technical-training-grows
The number of manufacturing jobs these regulations create is very low. The Amtrak loco order was a few hundred thousand dollars in extra cost per job; the jobs, needless to say, are not paying hundreds of thousands per year.
What would really help the American job situation is spending the minimum necessary amount of money on rolling stock, and instead employing construction workers building rail lines and high station platforms, stringing catenary, and installing signals.
Very true. To pile on, the FRA’s backwards “safety” rules for railcars are probably a bigger cause of overpriced trains than the Buy-America rules…. and the FRA might be more easily convinced to get rid of their backwards rules if we had modern signal systems installed. Spend the money on installing signal systems. *And for goodness sake don’t apply Buy-America to the signal systems.*
It’s hard to separate out the impact of explicit “buy america” rules from that of the FRA’s backward “safety” regulations, or even from that of actually-necessary customisations (platform height etc) for a currently very small market. All of the above need fixing, but I’d very interested in any data that indicates which is the biggest problem. (On intuition alone it’s very hard to decide which of “buy america” or the buff strength requirements seems worse.)
Very true. I wonder how the Buy-America rules would work if the standards for US railcars actually followed international standards for safety, instead of having all these stupid rules about putting dead weight in the cabs. Dead weight is very expensive.
My intution says that the buff strength rule is worse; it actually is *less* safe than crumple zones and makes the trains more expensive to operate, as well as to build.
I’d push to get rid of that first. Building fairly-close-to-standard designs in the US might cost more than building them abroad, but building totally non-standard designs clearly costs a LOT more than building standard ones. BART is the extreme example, paying, what was it, twice as much as anyone else because of their nonstandard gauge, profile, electrical system, etc.?
Many contracts in Europe also involve provisions for significant share of domestic work and – Hungarian FLIRTs is one example that comes to my mind – and they’re not overpriced. Get rid of unique american requirements, tender proper quantities (big enough for economies of scale, small enough so that you get at least three independent bids) and prices for US stock will go down to rest of the world levels.
[…] Image: Systemic Failure […]
FLIRTs are not Hungarian, they are Swiss.
“North American Bus Industry” (Ikarus) products? Now those are Hungarian!
So the FLIRTs roaming tracks around Budapest are indeed swiss-built? I was under impression that the contract forced Stadlert to build large part of vehicles in Hungary (but I’m too lazy to go trough RG archives to make sure).
I suspect domestic passenger rail manufacturing, like many other types of manufacturing, is coming back to the US.
Any rolling stock paid for with federal funds has to meet Buy America requirements, so manufacturers do build trains in the US with just enough domestic content to qualify as made in the USA. But Buy America requirements increase prices, don’t create many jobs and don’t foster a real domestic industry. There just isn’t enough demand for passenger trains in the US to generate the economies of scale needed for an “all-American rail supply chain” building trains with 100% domestic content at competitive prices.
[…] Of course, we now know that this FRA “standardized” design had the opposite effect. For example, Amtrak’s latest order for 130 new bi-level railcars came with an absurd price tag. […]