Axing of Sumitomo Paints County Into Corner : Green Line: Officials are reluctant to open bidding to sole U.S. firm. Starting local rail car production would take years, critics say.

Now that Los Angeles County transportation officials have canceled their contract with Japanese-based Sumitomo Corp., a new problem has emerged: Only one American firm manufactures rapid transit cars.

That firm is Morrison-Knudsen, the Idaho-based company that was the losing bidder on the $122-million contract for the Norwalk-to-El Segundo Green Line.

Officials interviewed Thursday said they have no desire to put themselves at the mercy of a single bidder. Instead, they are scrambling to evaluate a variety of options, from joint ventures between foreign and American firms to establishment of a local, privately run train production facility--possibly in a new redevelopment district sponsored by the Community Redevelopment Agency.

“One of my fears in this whole thing was that Morrison-Knudsen would walk away with the whole thing,” said Assemblyman Richard Katz (D-Sylmar), who had pushed for cancellation of the Sumitomo contract. “Sumitomo could be in it if they’re willing to spend 75% of the dollars in Los Angeles County.

But some officials noted that the more ambitious proposals to emerge in recent days could take years to implement.

Whatever the resolution of the Green Line controversy, officials said they are unlikely to pursue suggestions that the county establish and operate its own rail car factory.

“The notion that somehow the government should get in the business of building rail cars is crazy,” said Deputy Mayor Mark Fabiani. “That idea just went into the dustbin of history in the Soviet Union and we shouldn’t be reviving it here. . . . We’d end up with cars with one wheel and statues of politicians.”

For their part, Sumitomo officials were assessing their options Thursday after what they viewed as Japan-bashing on Wednesday at the Los Angeles County Transportation Commission. The commission voted unanimously to cancel its month-old contract with Sumitomo after an extraordinary public outcry about sending jobs to Japanese that could go to Americans. At the same time, the commission delayed indefinitely the use of driverless cars that had been planned for the Green Line.

Among the options under consideration by Sumitomo officials is a legal challenge to reinstate the contract or to seek damages for its cancellation. Chuck White, product manager of Sumitomo Corp. of America, said Thursday no decision had been made about whether to proceed with litigation.

Some transportation officials said that Sumitomo might drop its threat of litigation and instead attempt to salvage part of the contract by participating in a joint venture with one or more American firms.

Several days ago, Sumitomo entered what it called “serious negotiations and discussions” with General Electric Corp. aimed at making GE a “substantial participant” in the Green Line contract. As part of a joint venture, GE would substantially increase the number of American and Los Angeles-area jobs produced by the project, Sumitomo officials said.

Whether Sumitomo could end up with part of the contract was among a host of unanswered questions about the Green Line’s future.

Along with its vote to cancel the Sumitomo contract--which had been awarded after years of study--the LACTC convened a special panel to evaluate a newly proposed six-point plan to standardize rail car design and build the vehicles locally. In theory, the plan would permit the LACTC to build and operate the Green Line using manually operated cars while retaining the option of converting to driverless cars in the future.

But the panel has only about three weeks to complete its study for a special commission meeting set for Feb. 19.

Some officials said that new proposals calling for construction of a manufacturing plant in Los Angeles are unrealistic, given the short time involved and the scheduled 1994 opening date for the Green Line.

Any solution that would involve the CRA is likely to take years. Ed Avila, agency director, said a study is under way of potential transit car manufacturing sites in existing CRA redevelopment areas.

Officials also are giving preliminary consideration to establishing a new redevelopment district in Van Nuys that would include a General Motors Corp. plant that is on the verge of being shut down. Creation of such a district would make the plant eligible for tax breaks that could be an incentive to retool the plant for production of transit cars. However, the process could take years, Avila said.

Some officials said the likely outcome of the Green Line controversy will be a renewed round of bidding that will produce proposals for joint ventures that promise more jobs for Southern Californians.

“The issue is maximizing local jobs,” said Gerry Hertzberg, an LACTC member who originally voted to give the contract to Sumitomo. “If Sumitomo or an Italian firm were to come here and locate a plant and hire American workers, that would be fine.

“Clearly, there are lots of opportunities if everybody is serious about formulating an industrial policy here,” Hertzberg said.