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Light rail firm says it wants to move to L.A. -- if MTA renews a contract

February 10, 2009 |  6:14 pm

A  dispute involving millions of taxpayer dollars and potentially thousands of so-called green jobs has erupted between the Metropolitan Transportation Authority and a manufacturer of light rail cars, according to interviews and documents. 

A firm called AnsaldoBreda says it will relocate its assembly and manufacturing plants from Pittsburg, Calif., and Italy to Los Angeles if -- and it's a big if -- the MTA agrees to buy 100 rail cars from the firm for more than $300 million. The MTA doesn't want to commit to the purchase and agency officials say they want to consider having other companies build new rail vehicles.

In 2003, the MTA signed a contract to buy 50 rail cars from AnsaldoBreda with two options to build a total of 100 more cars. Thirteen of those cars are being used on the Gold Line and six are being tested by the MTA before being put into operations.

The gray cars are recognizable for their streamlined, Art Deco-ish look. They're also known to passengers for a more dubious reason: The seats are two inches narrower than in other types of light rail cars used by the MTA, meaning riders are more squished together.

In the meantime, there has been a lot of finger-pointing between the MTA and AnsaldoBreda over issues involving the manufacturing of the cars.

MTA staff, in a Jan. 28 memo, wrote that the AnsaldoBreda cars are about 6,000 pounds overweight, use too much electricity and can't be used on the MTA's other light rail lines because they aren't interchangeable with other types of rail cars. MTA officials also say that all 50 of the cars were due by May 2007.

Mike Cannell, the agency's general manager for rail operations, said that there have been other problems, including train doors that were opening too soon and brake pads that were falling off cars. As for the narrow seats and interchangeability issues, Cannell said that it isn't clear if someone at the MTA changed the requirements for the cars since the original order was placed.

Cannell said that the passage of a half-cent sales tax increase last year to build more mass transit means that more new rail cars are needed. Instead of buying 100 of the cars from AnsaldoBreda, the MTA would rather contract to purchase 118 new rail cars and have the same company rebuild 69 existing Blue Line cars.

"I'm not canceling their contract," Cannell said. "It's simply a question of why do we want more of them -- if the passengers don't like them?"

Four years ago, the relationship between the MTA and AnsaldoBreda seemed better. In a 2005 news release about the delivery of new rail cars, MTA Chief Executive Roger Snoble praised AnsaldoBreda. "The 2550 [rail car] is as technologically advanced as any light rail car operating in the United States," the release quoted Snoble as saying. "AnsaldoBreda has answered our call for a first-class vehicle that meets the needs of all three Metro Rail light rail lines, to be delivered on time and within budget."

AnsaldoBreda officials could not be reached for comment. But a letter Friday from the company's CEO to the MTA Board of Directors outlines their side of the story. The firm says that the MTA has repeatedly praised its performance and that delays in producing the new cars was the result of the MTA changing specifications for the vehicles after some of the cars were delivered.

"AnsaldoBreda specifically began exploring the idea of locating the company's American manufacturing facility and corporate headquarters to Los Angeles in the fourth quarter of 2008 after the economic meltdown and the overwhelming passage of Measure R," wrote AnsaldoBreda President Giancarlo Fantappie in the letter to the MTA board. "The manufacturing facility and headquarters will generate approximately 5,000 jobs and millions of dollars in revenue for Los Angeles."

The company also argues that picking up the option to build the 100 rail cars could qualify the MTA to receive money from the economic stimulus plan proposed by President Barack Obama.

What remains unclear is whether AnsaldoBreda is actually going to move to Los Angeles or use the prospect of a move as a negotiating maneuver. The firm, in its letter, said that it began to consider the move in the "fourth quarter of 2008" -- in other words, just weeks before the MTA decided whether to exercise its options to buy 100 more of the AnsaldoBreda cars.

"We've met with them and they were very impressive," Cecilia Estolano, chief executive of the Community Redevelopment Agency in Los Angeles, said of AnsaldoBreda. "They seem to be strongly committed to coming to Los Angeles if they can make progress with [the MTA]. The job numbers they presented to us and the wage scale they presented to us were very attractive."

Estolano said the company is interested in building a plant on a 20-acre plot of industrial land that the redevelopment agency purchased from the state last year. The agency has dubbed the area as the "CleanTech Manufacturing Center" and is hoping to use incentives to attract environmentally-friendly companies.

Estolano added that the agency is evaluating AnsaldoBreda along with other firms interested in potentially using the site.

Los Angeles Mayor Antonio Villaraigosa has been involved in talking to AnsaldoBreda. "The mayor has been aggressively pursuing the opportunity to bring new green manufacturing jobs to Los Angeles," said Matt Szabo, a Villaraigosa spokesman. "Hundreds of new jobs would provide exactly the kind of boost the local economy needs."

"With respect to the contract, the mayor is committed to ensuring that AnsaldoBreda receives a full and thorough review on its merits in front of the MTA Board of Directors before making a decision on the contract," Szabo added.

The entire matter will ultimately land in the lap of the MTA board -- which is chaired by Villaraigosa -- at its monthly meeting in March. That gives officials with AnsaldoBreda and other companies who hope to win a rail car contract plenty of time to make their case: AnsaldoBreda will lobby to have the options picked up and other firms will want the chance to bid on a different, larger contract. 

Given the size of that contract -- it will total in the hundreds of millions of dollars -- rest assured there will be plenty of lobbying on all fronts.

--Steve Hymon