Time Was Ripe for Green Line Deal’s Reversal

Timing, politics and--in the view of some critics--racism all played roles in Wednesday’s remarkable reversal of plans by Los Angeles County transportation officials to have the Japanese-owned Sumitomo Corp. build a high-tech, automated train for the Metro Green Line.

The action has left Sumitomo officials “in total bewilderment,” said Barna Szabo, a consultant to the company. “They understand that there is such a thing as local politics, but they don’t know how long this will last,” Szabo said. “It’s unfair.”

At another time, a public contract with a Japanese firm might have gone relatively unnoticed in Los Angeles.

In the mid-1980s, for example, Sumitomo won the contract to build the Long Beach-to-downtown Blue Line, which opened in 1990. At the time, there was no controversy. Several years ago another foreign firm, Breda Construczioni Ferroviarie of Italy, was awarded a $54-million contract to build the cars for the Metro Red Line, which will run from downtown to mid-Wilshire. Again there was little or no reaction.

But President Bush’s recent trade trip to Japan, the 50th anniversary of the Japanese attack on Pearl Harbor, a worsening local economy and an emerging pack of mayoral candidates who seized the moment all converged to transform what was an obscure local issue into a political flash point.

Sumitomo was awarded the $121.7-million contract just one month ago after years of debate over driverless technology and months of high-stakes lobbying. With a lopsided vote, Los Angeles County Transportation Commission members decided that Sumitomo had greater expertise in building rail systems than did its only competitor, Idaho-based Morrison-Knudsen Corp.

Sumitomo has been in the business for decades and built the cars for the Blue Line, which opened on time and is considered a success as the first leg of a vast new rapid-transit system for the Los Angeles region. Morrison-Knudsen began building rapid transit cars just three years ago. Sumitomo was awarded the contract despite the fact that Morrison-Knudsen was the low bidder by a margin of more than $5 million. Given their local and international track record, Sumitomo officials had reason to believe that the matter was settled last month. But they had not anticipated the extraordinary political outcry that followed the commission’s decision. The swiftness and intensity of the public reaction also seemed to catch commissioners off guard.

Several potential mayoral candidates were among the first to criticize the Sumitomo contract at a series of press conferences, rallies and hearings. The city officials jumped into the fray even though Metro Rail is a county matter over which they have no jurisdiction.

Assemblyman Richard Katz (D-Sylmar) and Los Angeles City Council members Zev Yaroslavsky, Nate Holden and Joel Wachs--all of whom are testing the water for 1993 mayoral bids--showed up at the county Hall of Administration on Wednesday to denounce the contract as unfair to beleaguered American workers who face high unemployment rates.

A Transportation Commission analysis of the bids had shown that Morrison-Knudsen’s proposal would have resulted in 3,150 more jobs in the U.S., of which 79 would have been in Los Angeles County.

Calls to a hot line set up last week by Wachs were overwhelmingly anti-Sumitomo and some callers left overtly racist messages with references to Pearl Harbor and World War II.

Yaroslavsky drew cheers Wednesday when he shouted, “Never again! Never again!” to a crowd of unemployed union workers who came to protest the Sumitomo contract. Some of the workers said they knew nothing of the earlier contracts granted to foreign companies and faulted themselves and their union leaders for failing to pay attention to the huge project.

All the potential candidates, including Yaroslavsky, have denied engaging in Japan-bashing. Yaroslavsky explained later that in saying “Never again!” he was referring to the commission’s decision to build the automated line as well as to the awarding of the contract to Sumitomo.

But Deputy Mayor Mark Fabiani on Wednesday accused the four of “whipping up xenophobic sentiments all over Southern California.”

“There is certainly no shortage of demagogues on the City Council who are eager to exploit anti-Japanese sentiments,” Fabiani said.

Mayor Tom Bradley, who is the chief backer of the automated technology, has supported Morrison-Knudsen’s bid in large part because the company would produce more jobs in the United States. Bradley has not yet said whether he will run for another term in 1993.

If there is a winner in the turn of events over the last month, it is Morrison-Knudsen, whose officials claim they did little to encourage the controversy that won the company another shot at the contract.

William Agee, president of Morrison-Knudsen, on Wednesday called the reversal “a great victory for all the people of the United States.”

People were “outraged” by the granting of the contract to a Japanese firm, he said. “It basically created a backlash and a real concern among the people in the streets,” Agee said. “I can honestly assure you that we did not stir the bushes.”

Sumitomo officials and others said Wednesday they believe that Morrison-Knudsen played a role in the events of the last month. Szabo, the Sumitomo consultant, said Morrison-Knudsen lobbyists worked to encourage letter-writing campaigns and garner support from the California congressional delegation and state Assembly members.

“They had a sequence of events which played very well with their theme of America first,” Szabo said. “In my opinion, they got lucky in terms of the overall milieu in which we’ve had to play.

Gerry Hertzberg, who sits on the Transportation Commission, said a “very orchestrated campaign” emerged over the last month to pressure the commission on behalf of Morrison-Knudsen.

Company officials “cloaked themselves in the American flag,” Hertzberg said.

Morrison-Knudsen has been represented by the influential lobbyist Maureen Kindel, Bradley’s chief fund raiser. Kindel, who accompanied Agee to the commission meeting Wednesday, declined to be interviewed for this story. Representing Sumitomo were former Gov. George Deukmejian and Bradley adviser Fran Savitch, neither of whom was at the meeting.

Hertzberg said he and other commission members were awash in letters over the last month that had similar critical messages about the Sumitomo contract. “There clearly was an orchestrated campaign,” he said.

Hertzberg, who represents Supervisor Gloria Molina on the Transportation Commission, had opposed automation, but voted for Sumitomo last month once the decision was made to use driverless technology. Hertzberg was among those who gave in to pressure and voted to cancel the contract.