Siemens snares $26 million pact
Sacramento Business Journal - by Mark Larson Staff Writer
Siemens Transportation Systems Inc. has won a $26 million contract with Calgary Transit in Canada to build 11 light-rail cars in its South Sacramento plant.
The contract is the latest in a growing line of work for the German-owned company, which employs 500 in an assembly and final test factory on French Road.
In October, Siemens won a $37.9 million contract to build 15 light-rail cars for a transit system in St. Louis.
Meanwhile, Siemens is in the hunt for a major light-rail contract right here at home -- a 54-car order with Sacramento Regional Transit worth an estimated $135 million.
The local contract would fill out the needs of RT's two big expansion projects: an extension along Highway 50 from Rancho Cordova east to Folsom; and the new six-mile line planned from downtown south to Meadowview.
It was Regional Transit that caused Siemens to set up the plant here in the first place, back in 1984 when Sacramento was among the first batch of cities in the nation to invest in a modern light-rail system. Siemens was hired to build all of the 36 cars used in Sacramento's current service.
RT expects to award the pact sometime this spring.
For now, executives at the Siemens transportation division's New Jersey headquarters are happy getting the Calgary pact.
"It's a fairly sizable contract," said spokeswoman Elaine Dezenski. "They were one of our first customers in North America in the '80s."
Siemens built all 83 of the light-rail cars in use in the Calgary transit system, which began operation in 1981. The new cars will be used for extensions to the system.
Shells for the new cars will be built in Siemens' Carson plant in Southern California, with mechanical assembly and final test work to be done here.
While Siemens' local plant has a steady flow of manufacturing contracts lined up, Dezenski said there are no current plans to add to the local work force. But she admitted, that could change if the company manages to land car contracts to be bid out this year.
Besides its bid for the big Sacramento pact, Dezenski said, the company could win upcoming new car orders expected from transit systems in Salt Lake City and San Jose.
Siemens is one of four light-rail car manufacturers that have bid for the 54-car Regional Transit order. The three other contenders are:
• Breda Transportation of Italy
• CAF, a Spanish manufacturer.
• And Kinki-Sharyo of Japan.
Jonathan Davidson, in charge of the rail car bid for Regional Transit, called Siemens "a strong contender." Two factors are expected to bode well for Siemens: It is the incumbent supplier of Regional Transit's light-rail cars, and its manufacturing plant is a short drive away, cutting shipping costs.
Bidders will be judged on price, delivery arrangements and assembly quality controls, Davidson said. Regional Transit wants the new cars to be delivered beginning in the third quarter of 2001, and continuing through mid-2003.
Siemens is plugging into a high-demand market for new light-rail cars in North America and overseas. While it does not disclose sales for the transportation unit, the company has kept busy locally, winning add-on orders to systems for which it initially built cars.
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