The Five Borough Report
Building Railcars in New York 
by Robert E. Paaswell

   New York City can be symbolized by its transportation systems. It has nearly one third of the nationís transit riders, more than 10% of the daily highway miles traveled nationally, three of the busiest airports in the world, and a global marine harbor. It can be considered a hub of rail transportation in the United States. It is the key location on Amtrakís Northeast Corridor linking Washington and Boston. It has the nationís busiest and most used subway system, and the nationís busiest commuter rail services. New York should be able to dictate the markets for transportation supplies, and it should be home to a broad spectrum of transportation-based industries.
    Railcars: Made Everywhere but in the U.S. With 7,849 railcars, it might be assumed that the Metropolitan Transportation Authority- home to the subways, Metro North, the Long Island Railroad, and the Staten Island Railroad, would dictate how the railcar industry in the United States should work. Together with PATH serving New York and New Jersey and New Jersey Transit serving all of New Jersey- but especially linking to New York- there might be a logic in developing long-term relationships with regional and local manufacturers to insure a steady flow of new or replacement vehicles and major vehicle rehabilitations. This would be the same logic that has Parisian subway cars made in France, London subway cars made in England, and Tokyo subway cars made entirely in Japan. 
    But the names on American railcars are not from American manufacturers; they are from European, Asian and Canadian manufacturers, all of which, by Federal Law, must insure that over 50% of the content is made in the U.S. The transit railcar industry in the U.S., once symbolized by names like Budd, Morris-Knudsen and others, has all but disappeared over the last two decades. Faced with uncertain transit budgets, railcar lifetimes extended from 20 to 35 years, and decline in the steel industry, U.S. producers could no longer be competitive. As the railcar manufacturers left, the impact was felt by their suppliers and, of course, the communities where their workers lived.
    The transit business is not like the auto business. Total annual production needs for the U.S. might be only in the thousands; in the auto business, we know, production is in the millions. But the values differ; each railcar costs $1.5-$2 million. One difficulty for manufacturers is that each rail transit property specifies railcars unique to its local needs. Overall length, width, seating, electronics, doors, suspension and propulsion systems are all tailored to the needs of the property; there is no U.S. standard. Each procurement is unique. A manufacturer cannot make a one-car-fits-all for the U.S. They must wait for orders and specifications for every procurement. This awkward process, of course, adds to the costs of manufacturing railcars. Offshore manufacturers have stepped up instead to meet U.S. needs.
    Why Local Manufacture Can Happen. Even with these complexities, it should be possible to restore the manufacturing of railcars to the U.S., and, as the home state of the biggest consumers of railcars, to New York State. There are a number of reasons why this might be worth pursuing now: first, the MTA is likely to continue going through a period of stable, somewhat predictable budgets for some time. Even in these uncertain times, the risk of a fiscal crisis that can undermine the capital budgets of transit systems in New York seems small. The integration of two major procurement tools- a five-year capital budget that identifies railcar procurement by year, and the ability to enter into a Full Funding Agreement with the Federal Government, can give manufacturers more certainty in the stability and continuity of production.
    The next factor arises from the fact that significant changes are taking place in the transit industry itself. Both railcars and buses, as well as terminals, yards, and shops, are being affected by the computer and information technology revolution. A new generation of vehicle is being built, a vehicle which can be operated by computers. Its components can ďtalk to each otherĒ and to a central control. Maintenance will be done on modules which can be addressed by hand held computers. The electronics sparking these changes were developed, in the first instance, in the U.S. The standards through which these computers will talk to each other are being developed by U.S. organizations. And these components - some unique to railcars - can also be adapted to  many types of vehicles, including trucks and buses. The industries that can supply these components to railcar manufacturers have a logical home in the U.S., and the skilled labor force that can produce them is here also.
    There is another source of demand for this industry. A new mode of transportation, Bus Rapid Transit (BRT), is being explored in many U.S. urban areas, including New York City. BRT, like rail, will operate on City Streets in exclusive rights of way. But, unlike rail, it can leave this right of way and operate as a regular bus. To gain public acceptance and use, BRT will be designed like railcars with modern, comfortable cabins and low floors. It will, in effect, be a railcar body on a bus chassis. Unique vehicles, they can be quickly adapted and built by railcar manufacturers. They fit the need in many areas where public transit is expanding and the markets call for 21st century vehicles. In fact, they reinforce the fact that transit ridership has been increasing everywhere over the past five years, and this growth is expected to continue.
    Boosting the Local Economy. But the strongest reason to relocate the railcar industry here is for its impact on the regional and local economies. Railcar and related manufacture could grow into a billion dollar business and serve rail transit throughout the U.S. Because of their higher wages, the employment multiplier effects of manufacturing are two to three times that of service-based industries. The transit properties themselves are already training grounds for some aspects of manufacturing and rail car rehabilitation. A highly skilled labor force, to build and assemble the entire product, can add stability to the local economy. And the continuing dynamics of the computer generation can build links between entrepreneurs, colleges, trade schools, and manufacturers to ensure that the integration and testing of new high tech components can take place economically and rapidly. Building vehicles here would shorten the times of delivery, prototype testing, initial run in and evaluations, all of which are costly and often frustrating. Further, U.S.- and New York- based companies would spend and reinvest their profits here, not take them abroad. This will help those industries grow and diversify.
    It is clearly time to rethink the role of manufacturing in New York and to begin with a product that is a quintessentially New York product.

Robert E. Paaswell is Distinguished Professor of Civil Engineering and Director, CUNY Institute for Urban Systems, CUNY.

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