Transit Panel Cancels Pact With Sumitomo : Green Line: Unanimous vote delays use of driverless light-rail cars. Union members cheer decision.

Yielding to an outburst of public discontent, the Los Angeles County Transportation Commission on Wednesday canceled its controversial contract with Sumitomo Corp. of America and indefinitely delayed the use of driverless cars on the Metro Green Line.

The unanimous vote, ending a month of controversy that improbably mixed local transit needs with global economic policies, drew cheers and applause from the scores of union members who had crowded the commission meeting.

They had recently joined the growing band of politicians and others who opposed giving the contract to Japanese-owned Sumitomo in light of the stubborn recession and high unemployment, and despite the fact that an American competitor, while less experienced, made a lower bid.

“The citizens of Los Angeles, the citizens of California have won a great victory here today,” said William Agee, chairman of Morrison-Knudsen, the American company that was the losing bidder but which now has a second chance. “Now we can finally have an open airing of this selection process.”

Sumitomo President Kenji Miyashara said he was “deeply disappointed” by the politics surrounding the commission’s decision.

“For the last two years, all concerned parties knew the ground rules for awarding the contract,” he said. “Nevertheless, our contract was canceled for non-business-related reasons. . . . We are considering how to respond at this time.”

Sumitomo consultant Barna Szabo attributed the reversal to a confluence of events that has stirred anti-Japanese feelings. He cited the 50th anniversary of the Pearl Harbor attack, the recession and preliminary posturing for “a very contentious mayoral race” next year.

Several commission members, including Los Angeles City Councilman Richard Alatorre, joined in decrying the sometimes harsh criticism of Sumitomo as “despicable.”

“We have been bombarded not just with opinion but with a tremendous amount of hatred,” said LACTC member Jacki Bacharach, a member of the Rolling Hills Estates City Council.

But City Councilman Joel Wachs, one of those opposed to Sumitomo, said, “This (controversy) is not about Japan-bashing. . . . This is for America. This is for American jobs. This is for local jobs.”

Wednesday’s 11-0 vote came on a proposal by Chairman Mike Antonovich to cancel Sumitomo’s $121.8-million car-building contract and convene a special panel to analyze a new “six-point plan” to standardize rail car design and build vehicles locally.

The ad hoc subcommittee is scheduled to submit its study of the six-point plan at a special LACTC board meeting on Feb. 19.

The plan could let the LACTC build and open the Norwalk-to-El Segundo line using manually operated cars while keeping the option of converting to driverless cars in the future. Driverless-car technology has been the other controversial element of the Green Line.

Although Antonovich had originally voted in favor of driverless cars, he backed off that position Wednesday, saying that because of the commission’s “substantial budgetary shortfall, due to reduced sales tax revenues, it is not advisable to incur the expense of full automation at this time.”

Antonovich endorsed the standardized, convertible vehicles that are at the heart of the six-point plan. For one thing, they would keep open the option of driverless cars. And the standardization would save money by consolidating the purchase of spare parts and maintenance items.

Mayor Tom Bradley, however, discounted the “six-point plan” as politically expedient but suspect. He has been the leading supporter of driverless cars and active in persuading the car-contract bidders to agree to increase the amount of work they would perform locally.

“The six-point plan offered so glibly to you today was the work not of the past six years . . . but of the past 72 hours,” he said, adding that he would continue to resist the advice of fellow commissioners to find a graceful way to back off his support of driverless cars.

“My friends, there is no graceful way to make a wrongheaded decision,” he said.

Significantly for Bradley and other proponents of driverless cars, the commission did not cancel Union Switch & Signal Co.’s $57.8-million contract for the sophisticated computerized train controls and signals that would be required for a driverless system.

But it kept open the option of canceling that contract while the county counsel reviews the matter. Commissioners were concerned that Sumitomo, if it sues, could use continuation of the train-signal contract to bolster its argument that its contract was canceled for purely political reasons.

The decision to separate the train controls from the car contract apparently came after a last-minute campaign by Pittsburgh-based Union Switch & Signal to persuade board members that it can offer whatever kind of system the commission wants--manual or automated--and do it by employing American workers.

The signal-maker said it would employ 150 people, equally split among Los Angeles, Pennsylvania and South Carolina, for Green Line work. Ironically, in light of the uproar over the foreign ownership of Los Angeles-based Sumitomo, Union Switch & Signal is owned by an Italian company, Ansaldo Transporti SpA.

Foreign ownership of Sumitomo figured prominently Wednesday in rhetoric heard both during a rally outside the County Hall of Administration and during the commission meeting inside.

The rally, organized by Wachs, featured several dozen union members who gathered at the Temple Street entrance to cheer and wave signs with such slogans as “American Jobs for Americans” and “Keep America Green: Let’s Spend Our Dollars Here.”

Inside, William Robertson of the AFL-CIO told the commission that there is no need to look overseas for workers capable of manufacturing transit vehicles.

“We’ve witnessed over the last 10 years an exodus of industry from this country--rubber tires, steel, auto, aerospace,” he said. “. . . We can build those (rail) cars here. . . . Los Angeles is symbolic of what can be done here in America.”

Ultimately, the commission allowed itself an opportunity to find a way to build cars locally. By canceling the Sumitomo contract, it kept open the option of designing a whole new car, the standardized “L.A. Car,” that it could use not only on the Green Line but on future lines from Los Angeles to Pasadena, Glendale, Santa Monica or South El Monte.

LACTC Executive Director Neil Peterson said this should let the commission order more cars at one time, giving it more leverage to demand that contractors build them locally with local workers.

The commission has authorized only the Green and Pasadena lines, but plans to approve a third light-rail line soon. Peterson said the agency plans to purchase about 87 cars now, and potentially could buy 600 over the next 30 years. The Green Line order canceled Wednesday was for 41 cars.

That proposal for a standardized car, backed up by a commission commitment to demand more local jobs from contract winners, won wide approval Wednesday, even from such ardent commission critics as Assemblyman Richard Katz and City Councilmen Wachs and Zev Yaroslavsky.

Less well-received was a companion proposal to explore the possibility of the LACTC buying or leasing its own factory site, at an estimated cost of $49 million, which it would require contractors to lease when they assemble any future rail-car order.

“The concept of the public sector establishing a manufacturing business in competition with the private sector is, in my judgment and the judgment of the business community and government leaders, very expensive, very inefficient and would put the LACTC in a business well beyond its charter,” said Agee, the Morrison-Knudsen chairman.

Peterson said he adopted the idea from the federal Department of Defense, which he said operates facilities known as “GO-CO,” or “government-owned, contractor-operated.”

Agee said his company has already inspected three local sites it could use for a permanent assembly plant if it ultimately gets the contract.

Critics, including executives in the transportation industry, also scoffed at LACTC claims that standardization of light-rail car design will result in significantly lower costs over time. The commission asserted that the cost of cars would fall to $2 million apiece from $2.7 million once an assembly line was up and running.

The transportation executives, who asked not to be named because they may seek business from the commission, said the cost of rail cars has been climbing sharply for years, even with large orders of hundreds of cars at a time placed by transit authorities in New York and Chicago.

“It’s pie-in-the-sky,” said one of the executives.. “It will not happen.”

Times staff writers Greg Krikorian and Jane Fritsch contributed to this story.

The Metro Green Line

The Metro Green Line, scheduled to open in 1994, will span 23 miles from Norwalk to El Segundo, running down the center of the not-yet-completed Glenn Anderson Freeway (formerly called the Century Freeway.) As it nears the ocean, the Green Line will split into segments extending north to Los Angeles International Airport and south to El Segundo. The Green Line will connect with the Blue Line, which is already in operation, and other segments of the region’s vast new rapid transit system that are planned or under construction.