Due to delays and defects, Boston MBTA may have to cancel a railcar order with Hyundai Rotem. The root causes are no surprise:
Hyundai Rotem made a bold entrance into the US market a decade ago with attractive promises, well-placed connections, and prices that beat experienced competitors.
Some in the industry considered it a risky bet, given that Hyundai Rotem had yet to open an assembly plant on American soil, a requirement under federal law, or demonstrate experience negotiating the stricter safety standards and other requirements that have bedeviled several large international corporations trying to break into the US transit and passenger rail market.
“North America is the most difficult market. It is the graveyard of car builders,” said Jonathan Klein, a global transportation consultant and former executive and chief mechanical officer at multiple large rail and transit agencies.
a) Buy-America only applies if federal money is used to buy the cars. The MBTA and Commonwealth of Massachusetts may buy cars built anyplace they like, as long as they use their own money.
b) The primary cause of the cancellation seems to be crappy low-quality behind schedule assembly at Hyundai Rotem’s US plant. Blaming the problem on US laws and regulations seems a bit of a stretch.
a) The MBTA has a Buy-America requirement as part of the Hyundai contract. It is a de-facto policy at most transit agencies, even when not using Federal funds.
b) Without the Buy-America and FRA rules, Hyundai would not be in the position of having to debug a new design, or rushing to open a new plan in the US.