Villaraigosa seeks a second chance for rail car maker
Mayor Antonio Villaraigosa plans to ask the Los Angeles County Metropolitan Transportation Authority to take a second look at an Italian rail car manufacturer, despite warnings from the agency’s top executives that the company’s cars have significant design flaws.
The Italian rail company, AnsaldoBreda Inc., has marshaled an intense lobbying effort over the last few months, striking alliances with people known to have the mayor’s ear and offering to open a rail car manufacturing plant in an industrial stretch of downtown Los Angeles.
The company already holds a contract to provide cars to the MTA.
It began a new lobbying campaign in late January after MTA officials said they were not interested in exercising the company’s options to build 100 additional light rail cars, in part because MTA officials say the delivery of 50 cars under AnsaldoBreda’s current deal is three years behind schedule and the cars are too heavy.
AnsaldoBreda officials counter that they built the cars to the agency’s specifications and the delay is caused by changes requested by MTA.
The agency’s executive staff planned to allow AnsaldoBreda’s options to build the cars -- a project that probably would have topped $300 million -- to expire March 31.
Villaraigosa, chairman of the MTA board, is expected to ask members either to exercise the options or agree to a two-month reprieve that would allow time to assess the company’s performance and gauge the feasibility of their rail factory proposal.
“We are talking about creating thousands of high-paying jobs at a time when local residents need them the most,” said Matt Szabo, Villaraigosa’s spokesman.
“The mayor believes we need to explore every possible avenue to ensure that the Measure R [sales tax] investment yields maximum benefit for the L.A. economy.”
In an interview last week, Roger Snoble, MTA chief executive, characterized the factory proposal as a late-breaking development after the agency decided to consider other rail companies.
With the passage of last year’s Measure R, a half-cent sales tax for transit, the MTA needs to order at least 110 new light rail cars and refurbish 69 old cars.
The agency has told AnsaldoBreda it is welcome to compete against other companies for that business.
“The real question is: Are we going to get the original 50 cars?” Snoble said.
“All the commotion is over the future, and we tend to overlook the present. . . . Because of the difficulties we were having with Breda, my decision -- and this is my decision -- is that we should go out to bid,” he said.
With little time before their options expire, AnsaldoBreda put further pressure on board members, including the mayor, by opening negotiations with the Community Redevelopment Authority about building an environmentally friendly manufacturing plant on a plot of more than 18 acres in an area that city officials hope to transform into a green manufacturing corridor.
The rail company, which would build the facility only if it gets the deal, has partnered with the green building company Shangri-La Construction.
That company’s founder is Stephen Bing, who contributed $100,000 to the mayor’s 2007 campaign committee to elect three school board members and gave $50,000 to the mayor-backed solar initiative known as Measure B, which was defeated by voters earlier this month.
In recent interviews, a number of MTA board members and their deputies said they were still vetting AnsaldoBreda’s performance under its current $159-million contract.
“The issue comes down to dependability,” said Mike Antonovich, an MTA board member and Los Angeles County supervisor, adding that the agency could get the best value by allowing other companies to compete.
MTA board member John Fasana said MTA staff had made a compelling case about the delays and other technical issues. “We need a good product and we need it on a timely basis.”
Of chief concern for several board members is that the systems in the AnsaldoBreda cars are incompatible with those already in the Metro fleet made by two other companies, Siemens and Sumitomo.
AnsaldoBreda officials say that they could fix that problem but that an MTA official waived the compatibility requirement after the company said it would have to simplify the technology in its cars to allow the different manufacturers’ systems to communicate.
Snoble and other MTA officials also are concerned about the narrowness of the seats in the cars, the vehicles’ reliability and their weight.
Although AnsaldoBreda officials say MTA is using a flawed formula to calculate weight, an MTA consultant found that when empty, the cars were 6,000 pounds heavier than specified in the contract, meaning that they consume more energy.
Another top issue for some MTA board members is the delays: Metro officials say that they had to put pressure on the company to get enough vehicles in time for the Eastside extension of the Gold Line and that the 50th AnsaldoBreda car was to have been delivered by June 2007 but won’t arrive until July 2010.
Company officials say the cars were delayed because the MTA did not have enough space to store them -- which Snoble disputes -- and because the agency requested changes, including adding a black box in each car.
“They provide the design and we build what they ask for,” said AnsaldoBreda lobbyist Chris Lehane, who is also a Democratic political consultant.
Lehane said agency officials publicly praised AnsaldoBreda when the cars were first delivered and when seeking state funds for the cars in 2006.
“We are more than happy to make any changes with regard to the seats, the weight issues and other issues . . . at cost to AnsaldoBreda,” Lehane said.
AnsaldoBreda President Giancarlo Fantappie said the company told MTA that if it got a 100-car contract but did not build a factory in Los Angeles, it would “lose the contract entirely and pay a penalty” to be set by the agency.
AnsaldoBreda has strong support from the Los Angeles County Federation of Labor because it has promised to use union labor to build its proposed $70-million facility on the old Crown Coach site and allow rail workers at the new plant to unionize.
Maria Elena Durazo, the federation’s executive secretary-treasurer and a longtime Villaraigosa confidant, sent a letter to Snoble, copied to board members, urging the agency not to allow “this big opportunity to be squandered.”
“It would really kick off this whole concept of green jobs and middle-class jobs and a clean tech corridor,” Durazo said.
A number of officials familiar with the proposal have expressed skepticism about AnsaldoBreda’s contentions that the facility would create thousands of jobs.
A Los Angeles County Economic Development Corp. study, commissioned by the federation, found that if the company manufactured 75 cars and refurbished 36 cars annually -- which would be determined by its ability to win major contracts -- it would employ 535 workers full time in Los Angeles County.
If the company moved its corporate headquarters to the site, as it has offered to do, it would employ 126 more people full time, according to the study.
In the United States, AnsaldoBreda has active contracts with Los Angeles and with Buffalo, N.Y., where it is refurbishing some of that city’s rail cars, Lehane said.
He said the company would compete for the proposed high-speed train linking Northern and Southern California, a commuter train line in Honolulu and future rail expansions in other cities.