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New light rail firm rolls into Palmdale

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Credit: Andrew Nuñez

In yet another boost to the Palmdale economic engine, Kinkisharyo International will open shop here to build from 175-235 light rail cars for the Los Angeles County Metropolitan Transit Authority (Metro), a move which could mean as many as 150-200 new permanent local jobs.

Kinkisharyo, based in Osaka, Japan, is North America’s foremost manufacturer of “low floor” light rail vehicles (LRV); and the first 69 of these vehicles rolling off the assembly line will replace the aging cars on the Metro Blue Line running from downtown Los Angeles to Long Beach. The factory will open its doors by the middle of next month.

With the first cars expected for delivery by 2015, the succeeding vehicles are scheduled for the new Crenshaw/LAX Line, as well as the Metro GoldLine/Foothilll extension, and then on the Expo Phase 2 to Santa Monica. Metro, in 2012, awarded Kinkisharyo an $890 million contract to build the rail cars at Rockwell. International’s old “Site 9” at Plant 42 where the B-1B bomber was assembled in the late 1970s.

Kinkisharyo, which has manufactured rail vehicles since 1920, has been very busy attracting American clients. Already the firm has supplied vehicles for light rail systems in Phoenix, Ariz. and in Seattle, Wash., as well as vehicles for the New Jersey Transit System. Overseas, they have exported more than 1,000 vehicles to Egypt and, within Asia, Kinkisharyo has supplied transportation systems in Hong Kong, Thailand and Singapore.

Kinkisharyo is now seeking to fill positions in manufacturing engineering, production supervision, mechanical and electrical quality control, as well as a number of inspectors, technicians and master schedulers. The delivery of train cars will help resolve problems of past service delays and deferred maintenance on the Blue Line’s 20-mile stretch of track. This was the first Metro light rail line to open (1990).

Right now, NASA is using the famous Rockwell site to house a number of service aircraft, including the Stratospheric Observatory for Infrared Astronomy (a flying telescope), Lockheed’s high-altitude ER-2 and a DC-8 (McDonnell-Douglas) flying laboratory. The plant is located at 30th Street East and Avenue P.

“We continue to work hard to attract potential manufacturers to come to Palmdale and take advantage of all that we have to offer—a skilled workforce, outstanding retail and restaurants, beautiful parks and amenities, and affordable housing,” said Dave Walter, Palmdale economic development manager, who added that the sprawling plant could provide Kinkisharyo with the capability to produce more than light rail. Walter added that the company’s operation could pump as much as $20 million annually into the Palmdale economy.

The Metro contract called on Kinkisharyo to produce two rail cars in what Ledford called the demonstration phase of the project. These cars are part of Metro’s pilot program and are expected to be delivered by October 2014.

The next 76 vehicles will be delivered beginning in May 2015 through February 2017. The next batch of 97 LRVs to be built in Palmdale will be delivered to Metro beginning in March 2017. Palmdale Mayor Jim Ledford said in May that the contract included a commitment by the Japanese firm to create American jobs in the process of delivering the vehicles. “It sets the stage for the balance of the program,” Ledford explained. “This opens the door with MTA for other rail car construction.”

Palmdale officials also believe Kinkisharyo could play a role in the planned high-speed rail project that would link Southern and Northern California. Having those vehicles produced in California, Walter explained, could help lower the cost of the two ambitious projects, one of which will run from Palmdale to Las Vegas. The other will travel from the Central Valley to Southern California.

Kinkisharyo’s ameriTRAM in Dallas, Texas. (32162)

Although Kinkisharyo has contracted over the years with 16 American light rail systems, its agreement with MTA did not come without controversy. Metro broke last year with organized labor by awarding the contract to a foreign firm. Siemens Industries and CAF USA had also bid on the contract and that prompted labor and civic organizations such as the Los Angeles Urban League, the AFL-CIO and even the Southern Christian Leadership Conference to insist that local tax dollars used to pay for the rail cars be directed to create jobs in California and not in Japan. The groups said that Siemens, which has a factory in Sacramento, could create up to 1,122 California jobs, open a new factory and even provide employment training programs.

“Common sense and good business practices would dictate that Metro invest in our country and vote against sending jobs overseas,” testified Maria Elena Durazo, executive secretary-treasurer of the Los Angeles Federation of Labor, AFL-CIO, prior to the 2012 MTA vote. “Too many of our families have not benefited from the recovery yet.”

Metro estimated that Kinkisharyo could create approximately $138.8 million in employment benefits. Ironically, Seimens’ bid would bring in just over $140.6 million into the job sector, but Metro found that the Japanese firm would offer the “lowest risk” to the delivery schedule (better logistics) and that it provided a superior technical proposal for the rail car systems in terms of design and integration. Also, the Siemens bid would supposedly have created 391 new jobs, while Kinkisharyo would generate 348 positions.

The contract is contingent on federal and local tax revenue that will pay for the rail cars with a goal of creating and keeping jobs in California. In July 2013, the Metro Board of Directors also approved two of the four options with Kinkisharyo for an additional 97 cars at a cost of $400 million. This clause triggered a provision that required the Japanese company to establish a factory in Los Angeles County.

Kinkisharyo is moving its U.S. corporate headquarters from Boston, Mass. to El Segundo.

“We are moving our U.S. headquarters because we believe in Los Angeles and believe that this location will give us great opportunities to grow our business,” said Teiji Tani, president of Kinkisharyo International, during an interview last week with the South Bay Daily Breeze. “In addition to it being a significant increase in the number of cars we are contracted to build, the execution of these two options triggers a commitment that we made last year to construct the actual car shells in the United States. So, we look forward to establishing and building a production facility in coming years. This will mean more high-quality, high-wage jobs for more American workers.”

Walter said Kinkisharyo and other firms such as Build Your Dreams (manufacturer of electric busses) are a “good fit” for Palmdale because the region’s skilled workforce provides readily-available talent for high-tech industries. “Because of that, we can supply such firms with the personnel necessary to fulfill their needs,” Walter said. “Palmdale is synonymous with the aerospace industry, and these workers have supplied the world with some of the most high-tech machinery.” Walter said some retraining may be necessary to meet the needs of rail-car manufacturing: “It’s just a matter of the proper fit from once building jets and rocket ships, to manufacturing rail cars,” he explained.

Kinkisharyo’s Sound Transit in Seattle, Washington. (32160)

Although national wages remain somewhat stagnant, paychecks have increased most when a single large business moves into a metropolitan area, according to the Bureau of Labor Statistics. The agency also reported in July of 2013 that a move such as Facebook transplanting from Palo Alto to Menlo Park aided the San Francisco economy considerably. Apparently, since Menlo Park is within the San Francisco metropolitan area, the average weekly wage of skilled labor in the metro region somehow grew more than 100 percent. Just the aspect of having more workers in town can generate more shopping, dining, and, most vitally, increased sales and business tax revenue.

Presently, it may be hard to find a city in America that isn’t planning, proposing, studying or actually building a light rail system. There are 30 light rail systems operating in the U.S. today, with at least 13 additional municipalities in the midst of building lines and many more being planned.

Light rail stops can create opportunities for denser development and can add to city coffers with the addition of mixed-used developments, residential/retail hubs, and entertainment venues. For example the Gold Line in South Pasadena/Pasadena has generated transit-oriented housing and retail at various stations).

Besides L.A., light rail has taken off in places like San Diego and Salt Lake City, Utah, and other cities large and small. The narrow “footprint” of light rail allows them to be placed in dense urban areas on already crowded streets. And, because they usually consist of two or three cars tops, electric light rail can transport more passengers more efficiently than diesel-powered busses. They’re called “low floor” vehicles simply because entering and exiting does not require much effort when stepping off or onto the platform. This design is said to have elderly and physically disabled persons in mind because an otherwise “elevated step” can sometimes prove difficult for such riders.

The use of light rail in the United States is low compared to some European nations, which do not traditionally have the system of highways that America invested in during the 1950s and ’60s. The American Public Transportation Authority, a international industry organization, reported this year that the cities of Boston, Mass.; Portland, Ore.; San Francisco; San Diego and Los Angeles have more than 250 million light rail passenger boarding each year. The Federal Transit Administration provides the majority of funding for light rail systems, although in San Pedro, for example, officials have decided to build a less expensive system with minimal federal dollars.

Boston leads by far in ridership with a reported 75.9 million patrons in 2012, followed by Los Angeles at 60.1 million, San Francisco at 52.2 million, Portland coming in at 40.8 million, Philadelphia with 31.6 million and Dallas, Texas with 28.5 million yearly passengers.

Kinkisharyo’s rendering of its newest train in Dubai. (32161)

Beginning in July, Los Angeles had 364,000 weekday boardings, with the Blue Line serving as the nation’s second busiest line with 73,000 daily boardings (some 26.2 million passengers each year). Los Angeles light rail is descended, indirectly, from the Pacific Electric Red Car and the Los Angeles Railway Yellow Car lines which operated from the late 19th century through the early 1960s.

Light rail should not be confused with “heavy rail” as the latter term refers to subway systems such as the L.A. Metro Red Line running underground from downtown Los Angeles to North Hollywood, and the Purple Line which travels between downtown L.A. and Mid-Wilshire.

The Site 9 assembly building is an historic part of the famous “Plant 42” at Edwards Airforce Base. Besides producing aeronautics marvels (planes, shuttles, bombers etc.) Hollywood producers have used the facility for location shoots on movies such as Jerry Bruckheimer’s “Pirates of the Caribbean” franchise starring Johnny Depp, and Steven Spielberg’s “The Terminal” starring Tom Hanks.

The famous B-1B had a somewhat rocky road to completion at Plant 42. Shorly after taking office, President Jimmy Carter, in 1977, decided to forgo manufacture of Rockwell’s then new supersonic bomber in favor of retrofitting the B-52 Stratofortress. The B-1B had what was called a “low mission capable rate” (it had to sustain completion of at least 75 percent of its missions), as well as a history of technical problems which caused the Air Force to spend another $2.4 billion to modify it into a conventional bomber. The first B-1B, “The Star of Abilene,” was delivered to the Air Force at Dyess Air Force Base in Texas in June 1985 and was in the air by October, 1986. The 100th and final B-1B rolled off the assembly line on May 2, 1988.

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