|
Post by Jason Saunders on Jul 23, 2009 0:28:59 GMT -8
Best article I've read on the subject to date. Good job Maeve Reston. ________________ Los Angeles Times www.latimes.com/news/local/la-me-rail-car23-2009jul23,0,1561313.story By Maeve Reston July 23, 2009 Firm's track record may decide fate of its MTA contract In other cities, AnsaldoBreda has been accused of missing deadlines and specifications on rail cars -- but so have its competitors. A $300-million contract in Los Angeles is at stake. By Maeve Reston July 23, 2009 Pressured by intensive lobbying from groups that include Los Angeles County's most powerful labor unions, transportation officials are slated today to decide whether to give Italian rail-car maker AnsaldoBreda a second chance at a $300-million contract. For months, Los Angeles County Metropolitan Transportation Authority officials have been locked in debate with the company over the quality of the 50 rail cars it has built under an existing contract that is three years behind schedule. When MTA executives said they planned to seek competitive offers rather than extend the contract for another 100 cars, the company pledged to build a $70-million rail-car manufacturing facility in downtown Los Angeles if the contract is renewed. At a time when city unemployment is at 12.5%, that caught the attention of city officials who argued the factory could be the centerpiece of a clean technology corridor proposed by Los Angeles Mayor Antonio Villaraigosa, who sits on the MTA board. But federal regulations bar Villaraigosa and other MTA board members from considering that offer, leaving them to focus on the company's performance. Some board members have been scrutinizing AnsaldoBreda's record in five other North American cities, as well as several recent contracts abroad. Mixed reviews Interviews and records reviewed by The Times show that AnsaldoBreda has faced similar public criticism in the past, but that several competitors also have checkered records. "Anywhere in the world . . . you can find every rail manufacturer having problems," said MTA board member Richard Katz. "I don't know if it's because public agencies don't know how to order cars or they keep changing them, or if the private sector doesn't know how to deliver cars." Top MTA staffers say AnsaldoBreda has not met its contract terms. Because the cars weigh on average 109,557 pounds -- about 6,000 pounds more than specified -- the MTA has had to reinforce five bridges along the Expo Line, according to the chief executive overseeing its construction. Staff also initially complained that the cars were incompatible with others in the fleet, a requirement waived by a former mid-level MTA official. The firm's officials have disputed the weight calculations, blamed delays on MTA-ordered changes and highlighted inconsistencies in MTA statements -- including a glossy brochure on the Gold Line Eastside Extension in which former MTA Chief Executive Roger Snoble says the AnsaldoBreda vehicles perform "like a 21st century rail car." This week, the firm's union allies accused a competitor, Siemens Transportation Systems Inc., of lobbying to scuttle the potential contract extension. Officials at Siemens -- one of six companies interested in competing for the work -- denied that charge. Global portfolio AnsaldoBreda officials say the contract options are critical to expanding their North American operation. The company's only other active manufacture or overhaul contract in the United States is refurbishing 27 cars for Buffalo, N.Y. But the firm is bidding on a driverless system in Honolulu and plans to compete for projects in Miami, Washington, D.C., and San Francisco. In the 1980s, Breda Costruzioni Ferroviarie, which merged with Ansaldo Trasporti in 2001 to form AnsaldoBreda, built 48 light-rail cars for Cleveland. A spokesman for the transit agency there said the cars arrived six months late, but "customers were very happy with them." Breda manufactured 364 cars in the 1980s for the Washington Metropolitan Area Transit Authority. Asked about the cars earlier this year, the authority's vice chairman, Peter Benjamin, said the agency has "had a perfectly reasonable experience" with them. In the early 1990s, Breda manufactured cars for MTA's Red Line, which opened eight months ahead of schedule. The firm's officials have touted the comments of a former MTA executive who called Breda's system support "outstanding." But in a January memo to board members, MTA staff said the reliability and availability of the 30 original vehicles ordered from Breda "is by far the lowest" of its rail fleet. Breda also built 151 light-rail cars in the 1990s for the San Francisco Municipal Railway; a spokesman would say only that they "carry more than 140,000 people a day successfully on our system." Both AnsaldoBreda and Siemens have faced past criticism from officials at the Massachusetts Bay Transportation Authority. When the Massachusetts agency temporarily halted a Breda contract for trolley cars in December 2004 after a series of derailments, a top executive told the Boston Globe: "We bought a lemon." Both sides filed claims against each other, but later worked to complete the contract. Agency spokeswoman Lydia Rivera said "the reliability and performance of the vehicle has improved dramatically." In 2007, a state auditor faulted the Boston-area transit agency for failing to "provide detailed track standards and conditions data necessary . . . to properly design" the cars. Subsequently the agency complained publicly about its order for 94 subway cars from Siemens, which ran three years behind schedule. Oliver Hauck, president of Siemens' transportation division, said the delays stemmed from ownership changes at its third-party car assembler and a bankrupt supplier. AnsaldoBreda SpA, the Italy-based parent company of AnsaldoBreda Inc., has recently won deals in Brazil, Saudi Arabia and Taiwan. Contract dispute AnsaldoBreda's recent troubles with DSB, Denmark's state railway system, caught the attention of MTA board member Mike Antonovich, a county supervisor who favors seeking other bids rather than extending the firm's Los Angeles contract. Last year, DSB threatened to cancel AnsaldoBreda's contract for 83 diesel trains that were ordered in 2000 and scheduled for service six years later. The dispute was resolved in May when AnsaldoBreda agreed to pay a $411-million settlement. Despite improvements over the last year, DSB said in a statement that the process had been "unacceptable." AnsaldoBreda's lobbyist, Chris Lehane, said delays stemmed from complications after the company's 2001 merger. But he said AnsaldoBreda's owner, Finmeccanica, has done everything it can to address the problems. Antonovich argued in a letter that DSB's criticism illustrates the company's "inability to fulfill its contractual obligations." Although there have been past problems with Los Angeles County's contracts with Siemens and another rail contractor, Sumitomo, the MTA's new chief executive, Art Leahy, said they did not rise to the level of the recent disputes with AnsaldoBreda. He said his focus has been on the Italian firm's work in Los Angeles and "what way they might find to persuade us that they've resolved their quality control issues." maeve.reston@latimes.com
|
|
|
Post by rajacobs on Jul 25, 2009 12:59:21 GMT -8
I received an email from a friend yesterday to the effect that both providers of LRT for MTA have substantial sales to Iran. He cited the WSJ: "...one of the world's most sophisticated mechanisms for controlling and censoring the Internet, allowing it to examine the content of individual online communications on a massive scale..." (WSJ, June 22, 2009) and then cited Breda: "...Breda is owned by Finmeccanica, a conglomerate of defense, aerospace, energy and transportation companies, which has deals to provide Iran with 44 gas turbines through its subsidiary Ansaldo Energia." (LA Times, July 18, 2009). It’s unfortunate that our LRT suppliers are these two corporations.
|
|
|
Post by bobdavis on Jul 25, 2009 14:37:41 GMT -8
Finding a large international company that doesn't do business with nations that we in the US find distasteful, disgusting or downright hostile can be difficult. One writer who had a strong anti-General-Motors bias accused GM of being too closely associated with the Nazi regime in Germany, probably related to GM's ownership of Opel. It has long been said with regard to international bankers and conglomerates, "money flies no flag".
|
|
|
Post by James Fujita on Jul 25, 2009 21:12:04 GMT -8
Guilty by association can be a very ugly thing.
That's not to say that there aren't some potentially shady operations out there. People have gotten into big trouble for even attempting to sell parts (not weapons, but parts) to Iran. I personally think that corporations should be cautious about potentially damaging deals with untrustworthy nations.
However, for every legitimate beef, there are dozens of dubious claims: Prescott Bush. Joseph Ratzinger (i.e., the Pope). Japanese automobile manufacturers. (For the record, my father's company, Honda, didn't even exist until after WWII, so there!).
Or bringing the conversation back to modern mass transit: look at poor Cubic, described in blog after blog as a "defense contractor." And what did Cubic manufacture? Bombs? Fighter jets? Missiles? Guns? Bullets? Tanks? Poison gas? No, nothing nearly so sexy as that.
Cubic is a tech company. They provide virtual training systems and communications programs — stuff like that. The other half of Cubic is the half responsible for TAP.
In terms of Breda vs. other manufacturers, Metro should be looking at price, quality and ability to meet deadlines, and not factories or Iran. No company is perfect, but based on what I've read here and elsewhere, Breda sounds like they could qualify for the "Clunkers for Cash" program.
|
|
|
Post by wad on Jul 26, 2009 4:01:58 GMT -8
(For the record, my father's company, Honda, didn't even exist until after WWII, so there!). Aren't the Hondas descendants of a legendary samurai? You mean a trade-up or a trade-in?
|
|
|
Post by kenalpern on Jul 26, 2009 6:46:05 GMT -8
At this point, the Iran thing is a stupid canard. Ansaldobreda's really reaching and they're proving themselves to be hucksters of the worst kind. It's very hard to be trusting of an entity that has proven themselves to be consummate liars and distorters.
|
|
|
Post by rajacobs on Jul 26, 2009 10:33:08 GMT -8
Am I correct that Siemens and Bredo are the only choices on the table for LA? Just given the existing investment, knowledge on maintenace and working with the vendors, it seems to me as if it would make little sense to seriously consider a third vendor.
...But interesting comment concerning Ansaldobreda, "they're proving themselves to be hucksters of the worst kind." I haven't followe the negotiation or fulfillment closely enough to understand the basis for the assertion. ...if so, I suppose we should hope for Siemens to emerge as the preferred vendor.
|
|
|
Post by Jason Saunders on Jul 26, 2009 15:25:06 GMT -8
Are you guys familiar with Siemens role in the rise of the Nazi party and their use of Jewish slave labor during WWII? en.wikipedia.org/wiki/Siemens#World_War_II_era"Preceding World War II Siemens was involved in funding the rise of the Nazi Party and the secret rearmament of Germany. During the Second World War, Siemens supported the Hitler regime, contributed to the war effort and participated in the "Nazification" of the economy. Siemens had many factories in and around notorious extermination camps such as Auschwitz and used slave labor from concentration camps [8][9] to build electric switches for military uses.[10] In one example, almost 100,000 men and women from Auschwitz worked in a Siemens factory inside the camp, supplying the electricity to the camp.[11]." If you read a little further down the article describes their controversial role in modern Iran and the internet.
|
|
|
Post by Gokhan on Jul 26, 2009 17:38:47 GMT -8
Given that trains are humanitarian infrastructure and Italy doesn't have the restrictions US has with Iran, Zev's comments regarding Iran were inappropriate.
It would be great if Metro created their own design - build firm for building rail. They could probably cut the cost of building light-rail and subway between 25% - 50% by directly hiring subcontractors. They could also create a firm and factory that builds rail vehicles, probably a joint venture with leading companies like Siemens and Breda. Or they could ask the control of the factory Breda could build for, say, next 30 years.
But, then, given that they can't even coordinate with LADWP relocation of the overhead power lines, I think such organized ventures by Metro are probably a wild dream at the best. LOL Probably the problem lies with the board of Metro, which is made up of politicians, which in turn means inefficient operations because of bureaucracy.
|
|
|
Post by Transit Coalition on Oct 31, 2009 21:31:49 GMT -8
Well, those who might be wondering now have a treat as an answer. AnsaldoBreda has thrown its final curveball at Metro and they've struck out. Here is a post from The Source:
Metro Issues Media Statement on Rail Car Contract Negotiations Posted by Gayle Anderson on Saturday, October 31, 2009 - 3:43 pm
Italian rail car manufacturer AnsaldoBreda S.p.A. has declined to sign a contract with Metro to exercise an option to provide 100 additional light rail cars to meet the agency’s operating needs for new rail lines in Los Angeles County. As a consequence, Metro will proceed with seeking industry bids on a new rail car procurement.
Good faith negotiations between the two parties have gone on for more than a year. The Board of the L.A. County Metropolitan Transportation Authority had set a deadline of midnight Friday, Oct. 30 to reach agreement on exercising the rail car options. But within hours of the deadline last night, AnsaldoBreda S.p.A. required changes to the agreement that were inconsistent with the Board’s direction, including financial penalties for late deliveries. Considering AnsaldoBreda S.p.A. has been late in delivering its base order of 50 cars, Metro officials declined to accept this last minute change.
Last week the agency’s Board of Directors gave AnsaldoBreda S.p.A. additional concessions including a guaranty financial cap and agreed to accept the company’s offer of two free rail cars because it couldn’t deliver rail cars within the weight limits specified in the contract.
With half a dozen new rail projects expected to open in the next decade, thanks to the Measure R transportation sales tax, Metro needs more than 100 rail cars manufactured and accepted in time to operate those lines. To avoid losing valuable time while negotiations with AnsaldoBreda S.p.A. were ongoing, the Board directed Metro staff to simultaneously prepare for soliciting bids for new rail cars. Industry experts have been advising staff in drafting the package. If all goes according to schedule, the transportation agency’s Board next spring will award a contract for new rail cars. AnsaldoBreda S.p.A. would be eligible to bid on this new contract along with manufacturers from around the world.
|
|
|
Post by kenalpern on Oct 31, 2009 22:09:04 GMT -8
Well, well, well--it's nice to know that the Measure R money isn't being taken for granted, and that Metro really did and does know what it's doing!
|
|
|
Post by Transit Coalition on Nov 1, 2009 7:06:03 GMT -8
While the failed contract called for cars at $3 million/each, going out to rebid will cost about $3.7 million/each. That will cost $70 million more. However, the Breda option was not eligible for Federal or State matching funding. Using match funds, we actually get better value from the L.A. County share of our 1.5% sales tax.
Now the race is on to get state funds rolling in again and to get a bigger pot from the Feds.
Here is the on-line version of the Times brief. It has more than the print edition that I received:
Los Angeles Times: Sunday, October 31, 2009 | 9:14 pm MTA's rail-car contract falls apart at last minute, scuttling hundreds of jobs [Updated]
A tentative and controversial deal to build 100 rail cars for Los Angeles County's transit system has fallen through -- taking with it plans to build a $70-million factory that would have created hundreds of local jobs.
Last-minute negotiations failed to result in a contract with AnsaldoBreda, an Italian manufacturer that is three years behind schedule on an existing contract to deliver 50 rail cars to the Los Angeles County Metropolitan Transportation Authority. Despite those delays -- and the delivery of cars that were 6,000 pounds heavier than specified -- AnsaldoBreda was positioned to win the new $300-million contract through an option with a deadline of Friday at midnight.
Just weeks ago, L.A. Mayor Antonio Villaraigosa had hailed the impending deal because the company said it would build the rail cars at a new Los Angeles factory. Villaraigosa had cited a study estimating that the plant would deliver $368 million in economic activity, including 650 factory jobs and close to 1,000 union construction jobs to build the facility. The Los Angeles County Federation of Labor had lobbied the MTA board in favor of the contract.
Today, the mayor expressed disappointment. "In these tough economic times, it was important to make every effort to bring good jobs to L.A. and simultaneously exercise due diligence to protect public funds in pursuing this contract,” Villaraigosa said in a statement. “Unfortunately after months of negotiations, at the last minute, satisfactory financial guarantees were not provided and the deal was not signed.”
Hours before the deadline, the company raised new issues -- including a cap on daily penalties for delivering rail cars behind schedule, said MTA spokesman Marc Littman. Transit-agency negotiators declined to make additional concessions and the time period to reach an agreement expired.
The deal’s disintegration has ramifications beyond the future work, said MTA board member Richard Katz, a Villaraigosa appointee. He cited an agreement under which AnsaldoBreda was going to provide two free rail cars, which sell for $3 million each, to make up for building the vehicles heavier than specified. The heavier cars forced the MTA to reinforce some bridges.
In tones that reflected the soured relations between the company and local officials, Katz called AnsaldoBreda “unprofessional and so unbusinesslike,” and said the company's inability to perform under its existing contract could result in litigation.
Officials from AnsaldoBreda could not be reached, but the company has defended its work and says it can point to the successful delivery of rail cars in other cities.
[Updated at 10:26 p.m.: In a statement, AnsaldoBreda president and CEO Giancarlo Fantappié said that his company had provided sufficient financial safeguards for MTA and that he regretted a deal could not be reached "despite multiple efforts to negotiate in good faith on both sides." He added: "Despite this turn of events, Los Angeles continues to represent a focal point for our strategy in America." AnsaldoBreda is eligible to take part in new bidding to build the rail cars.]
The MTA intends to rebid the work quickly and hopes to sign a contract that will result in local jobs, Katz said.
The effort to exercise the option with AnsaldoBreda has long had critics, including county Supervisor Mike Antonovich, who in a statement called the latest development “a victory for taxpayers.”
The company “failed once again to deliver on a promise made to the people of Los Angeles County," said Antonovich, who also sits on the MTA board. “Los Angeles city insiders and special interests attempted to ram through a substandard outfit, creating costly delays in the MTA's ability to seek a legitimate firm to build rail cars.”
-- Howard Blume
|
|
|
Post by Transit Coalition on Nov 2, 2009 9:37:00 GMT -8
While the failed contract called for cars at $3 million/each, going out to rebid will cost about $3.7 million/each. That will cost $70 million more. However, the Breda option was not eligible for Federal or State matching funding. Using match funds, we actually get better value from the L.A. County share of our 1.5% sales tax. Now the race is on to get state funds rolling in again and to get a bigger pot from the Feds. Here is the on-line version of the Times brief. It has more than the print edition that I received: Los Angeles Times: Sunday, October 31, 2009 | 9:14 pm MTA's rail-car contract falls apart at last minute, scuttling hundreds of jobs [Updated] A tentative and controversial deal to build 100 rail cars for Los Angeles County's transit system has fallen through -- taking with it plans to build a $70-million factory that would have created hundreds of local jobs. Last-minute negotiations failed to result in a contract with AnsaldoBreda, an Italian manufacturer that is three years behind schedule on an existing contract to deliver 50 rail cars to the Los Angeles County Metropolitan Transportation Authority. Despite those delays -- and the delivery of cars that were 6,000 pounds heavier than specified -- AnsaldoBreda was positioned to win the new $300-million contract through an option with a deadline of Friday at midnight. Just weeks ago, L.A. Mayor Antonio Villaraigosa had hailed the impending deal because the company said it would build the rail cars at a new Los Angeles factory. Villaraigosa had cited a study estimating that the plant would deliver $368 million in economic activity, including 650 factory jobs and close to 1,000 union construction jobs to build the facility. The Los Angeles County Federation of Labor had lobbied the MTA board in favor of the contract. Today, the mayor expressed disappointment. "In these tough economic times, it was important to make every effort to bring good jobs to L.A. and simultaneously exercise due diligence to protect public funds in pursuing this contract,” Villaraigosa said in a statement. “Unfortunately after months of negotiations, at the last minute, satisfactory financial guarantees were not provided and the deal was not signed.” Hours before the deadline, the company raised new issues -- including a cap on daily penalties for delivering rail cars behind schedule, said MTA spokesman Marc Littman. Transit-agency negotiators declined to make additional concessions and the time period to reach an agreement expired. The deal’s disintegration has ramifications beyond the future work, said MTA board member Richard Katz, a Villaraigosa appointee. He cited an agreement under which AnsaldoBreda was going to provide two free rail cars, which sell for $3 million each, to make up for building the vehicles heavier than specified. The heavier cars forced the MTA to reinforce some bridges. In tones that reflected the soured relations between the company and local officials, Katz called AnsaldoBreda “unprofessional and so unbusinesslike,” and said the company's inability to perform under its existing contract could result in litigation. Officials from AnsaldoBreda could not be reached, but the company has defended its work and says it can point to the successful delivery of rail cars in other cities. [Updated at 10:26 p.m.: In a statement, AnsaldoBreda president and CEO Giancarlo Fantappié said that his company had provided sufficient financial safeguards for MTA and that he regretted a deal could not be reached "despite multiple efforts to negotiate in good faith on both sides." He added: "Despite this turn of events, Los Angeles continues to represent a focal point for our strategy in America." AnsaldoBreda is eligible to take part in new bidding to build the rail cars.] The MTA intends to rebid the work quickly and hopes to sign a contract that will result in local jobs, Katz said. The effort to exercise the option with AnsaldoBreda has long had critics, including county Supervisor Mike Antonovich, who in a statement called the latest development “a victory for taxpayers.” The company “failed once again to deliver on a promise made to the people of Los Angeles County," said Antonovich, who also sits on the MTA board. “Los Angeles city insiders and special interests attempted to ram through a substandard outfit, creating costly delays in the MTA's ability to seek a legitimate firm to build rail cars.” -- Howard Blume Here is the spin from the Mayor and AnsaldoBreda on the failure: Villaraigosa: In these tough economic times, it was important to make every effort to bring good jobs to LA and simultaneously exercise due diligence to protect public funds in pursuing this contract. Unfortunately after months of negotiations, at the last minute satisfactory financial guarantees were not provided and the deal was not signed. We will continue to work to see that rail cars can be built in LA using local funds to reap the job and environmental benefits that a manufacturing plant can bring to the region." AnsaldoBreda release: AnsaldoBreda agreed to provide financial guarantees that included an Irrevocable Letter of Credit, a Performance Bond and a Parent Company Guarantee totaling a value well above that of the contract. However, AnsaldoBreda, in accordance with Company policy, required to restate the provision of the original contract, contemplating a cap on the liquidated damages. Therefore AnsaldoBreda proposed a solution which specified a cap for maximum delays and stated that if the threshold of the cap was ever reached, MTA could terminate the contract for reasons of default and avail itself of the above mentioned guarantees which would cover the total value of the contract. Unfortunately, on this last point, despite multiple efforts to negotiate in good faith on both sides, no agreement was reached. AnsaldoBreda would like to thank Mr. Leahy and the staff of MTA for the trust extended to them and for the dedication demonstrated in trying to reach a positive conclusion. Despite this turn of events, Los Angeles continues to represent a focal point for our strategy in America.
|
|
|
Post by transitfan on Nov 2, 2009 11:59:35 GMT -8
I'm guessing that the 100 cars were for lines/extensions a few years off in the future (i.e. Expo phase 2, Crenshaw, Gold Line to Azusa, etc.) I'd hate to think some of those cars were slated for Expo phase I, would be difficult if not impossible for MTA to obtain vehicles for a line that is supposed to open in less than 2 years.
|
|
|
Post by nickmatonak on Nov 17, 2009 21:58:38 GMT -8
Actually the earliest date for the cars to arrive would have been 2013 and keep in mind that Breda still owes Metro 13 cars that were supposed to have been delivered by 2007.
|
|