Posts Tagged ‘Nippon Sharyo’

Illinois Passenger Car Plant Closing

August 16, 2018

A passenger car manufacturing plant that was expected to build the next generation of rail cars has been closed by its owner and put up for sale.

Nippon Sharyo opened the plant eight years ago in Rochelle, Illinois, with the expectation that it would build 120-bilevel passenger cars to be used on Amtrak corridor routes in Illinois and California.

But when a prototype built at the plant failed to pass federal crashworthiness tests, the contract was given to Siemens in 2017.

The plant did, though build 160 Highliner cars for Metra, the Chicago commuter rail agency. The last of those cars was delivered in 2016.

At one time, the plant employed 800 workers but the payroll has been declining in recent year as car orders dried up.

Although Nippon Sharyo did not say when the plant would close, production has already ceased.

The only workers left handle administrative duties, field service, and maintenance services for customers.

The $371 million contract for the Amtrak route cars was awarded to Nippon Sharyo in September 2012 with delivery between the end of 2015 and early 2018.

In September 2015, the prototype car buckled during an 800,000-pound compression test.

Work on the cars halted and 98 workers were laid off. Nippon Sharyo has never publicly disclosed the reasons why the prototype car failed the compression test.

In a statement, the company said the complexity of the project prevented it from completing it.

“This result brought significant losses, which severely impaired our financial conditions to the extent that we can no longer build rail cars at the Rochelle factory,” the statement said.

New Midwest Passenger Cars 2-3 Years Away

December 6, 2017

New passenger cars for Amtrak’s Midwest corridor routes are at least two to three years away.

“The order is in but I don’t expect to see the cars out here for two to three years  . . . it’s a big order,” said Amtrak spokesperson Marc Magliari. “So we are not going to be able to re-equip all four of the Lincoln Service roundtrips with new cars I don’t think certainly in 2018, maybe in 2019, pretty confidently in 2020.”

The cars had been expected to go into service earlier, but the delays have been caused by a change in vendors.

A consortium of states, including Illinois and California, had awarded a contract to Nippon Sharyo to build the cars in Rochelle, Illinois.

But a prototype car failed to pass federal safety rule tests. That prompted the consortium to instead contract with Siemens to build the cars at its plant in Sacramento, California.

Canceled Car Contract Not Good News for Rochelle

November 16, 2017

The news that Nippon Sharyo has lost the contract to build new passenger cars for Midwest and California corridor trains operated by Amtrak is not good news for  Rochelle, Illinois.

Nippon Sharyo established a factory in the northern Illinois city that does not see any scheduled passenger trains to build the bi-level cars.

But a prototype car built at the plant failed to pass safety tests and many employees at the Rochelle plant had already been laid off before the California Department of Transportation announced that Siemens will instead complete the cars at a factory in Sacramento, California.

The contract with Nippon Sharyo had been announced in November 2012 by former Illinois Gov. Pat Quinn and was valued at $550 million.

The Illinois Department of Transportation had banded together with its California counterpart to oversee the car orders, which also involves the states of Michigan, Wisconsin and Missouri.

The original contract had called for 130 passenger rail cars of which California agreed to buy 42. The remaining 88 cars were earmarked for Amtrak’s Midwest corridor routes.

Some saw the new cars as a first-step toward creating 125-mph passenger service in the Midwest.

With more than $10 million in state and local financial incentives, Nippon Sharyo opened a new U.S. headquarters and the $35 million passenger rail car facility in Rochelle in July 2012.

As recently as 2015, the Rochelle plant employed 694. Last month employment there was 54.

Illinois officials had said when announcing the contract to build cars in Rochelle that Nippon Sharyo had agreed to create 250 jobs and retain 15 at its office in Arlington Heights. A report in the Chicago Tribune said it is unclear if this agreement has changed.

Nippon Sharyo said it “will continue its business operations going forward with a reduced number of employees to meet the needs of existing customers and contractual responsibilities.”

Caltrans recently said it has awarded a $352 million contract to Sumitomo Corporation of Americas and Siemens to complete the car order that Nippon Sharyo once had.

The new contract calls for 137 single-level rail cars of which 88 will be used in the Midwest.

The Midwest High Speed Rail Association says that single-level cars are safer and better able to protect passengers in the event of a crash.

Siemens to Complete Passenger Car Order

November 10, 2017

Siemens will replace Nippon Sharyo as the builder of new passenger cars for the departments of transportation of California and Illinois, the agencies have confirmed.

Caltrans said in a news release that it has amended its $371 million contract for new passenger cars so that Siemen and Sumitomo Corporation of American will complete the long delayed multi-state order.

Under the new contract, the order will include 137 single-level passenger railcars – 49 to Caltrans and 88 to IDOT.

The original contract called for bi-level cars with Sumitomo subcontracting construction of the cars to Nippon Sharyo. The revision designates Siemens as a subcontractor.

The cars are to be delivered in 24 to 34 months after production begins next year.

The original cars were being built in Rochelle, Illinois. A prototype car was completed, but failed to pass federal crashworthy tests.

The single-level cars will be constructed at a Siemens plant in Sacramento, California. All components will come from U.S.-based suppliers.

California plans to use the new passenger cars on Amtrak’s Pacific Surfliner, San Joaquin and Capitol Corridor trains. The equipment will also be used on Midwest corridor trains.

Siemens Cars to Replace Sharyo Cars

September 2, 2017

Single-level passenger cars built by Siemens will replace bi-level coaches that were to have been built by Nippon Sharyo.

The departments of transportation of California and some Midwest states had ordered 130 bi-level cars from Sharyo that were to be built in Rochelle, Illinois.

However, design problems and an inability of a prototype to pass federal rigidity tests delayed the order.

Now the California Department of Transportation, which is leading procurement of the cars, has said it will substitute 130 Siemens cars for the Sharyo order.

The number of seats will be reduced, but state officials said the time frame for delivering the cars will be shortened from five years to 24 to 34 months.

In the Midwest, the Siemens cars are expected to replace Horizon equipment.

Layoffs Threaten Passenger Car Order

January 24, 2017

The factory that is to build new passenger cars for use on Amtrak routes in the Midwest and California has just laid off 100 workers, throwing the future of the order into further doubt.

Nippon Sharyo had already laid off workers from its plant in Rochelle, Illinois, in 2015 and 2016.

nippon-sharyoThe Japanese company has a contract to build 172 bi-level cars with $551 million of the cost being paid for with funding from the American Recovery and Reinvestment Act.

The cars are ticketed to replace the Horizon fleet cars that are now typical on Midwest corridor trains.

Nippon Sharyo has attributed the layoffs to continuing production and mechanical issues. Chief among those is the failure of a prototype car to pass a stress test in 2015.

The funding for the passenger cars will expire on Sept. 30, 2017, and revert back to the U.S. treasury if it is not spent by that date.

“The Midwest states know that there are delays relevant to Sumitomo and Nippon Sharyo being able to deliver equipment,” Tim Hoeffner, head of the Michigan Department of Transportation’s rail office, told Trains magazine. “The states don’t know what the new delivery schedule is yet and are waiting for Nippon Sharyo, California (which is leading the railcar procurement) and the Federal Railroad Administration to come back to us with a proposed schedule and a path forward.”

GAO Wants Better FRA Oversight of Car Order

June 4, 2016

The U.S. Government Accountability Office is recommending that the Federal Railroad Administration improve its oversight of the stalled project to build new passenger cars for Midwest and West Coast corridor passenger trains.

The agency issued its report in the wake of funding uncertainty for a 172-car order placed with Nippon Sharyo.

FRAMost of those cars – 130 – are being funded by a $551 million grant from the American Recovery and Reinvestment Act of 2009.

But that grant will expire on Sept. 17, 2017, if it is not spent by then.

The rest of the passenger cars are being funded by California Department of Transportation and are not subject to the same federal grant.

Production of the cars was halted after a prototype shell failed a compression test last August at the Nippon Sharyo factory in Rochelle, Illinois.

Engineers and designers have sought to find a solution to the problem but thus far have not come up with one.

The GAO said the FRA could be more effective in managing grant money by requiring “timely and actionable information on grantee performance” in its review process, giving grant recipients more specific guidance for tracking information such as deliverables and project milestones, and by formalizing a training plan for grantees and agency staff.

“Prior to 2009, FRA had a very limited grant portfolio, receiving appropriations for approximately $30 million in grant funding in fiscal year 2008, for example,” the report said. “With expanded responsibilities, the agency had to quickly award approximately $8 billion in Recovery Act funds while simultaneously developing policies and procedures for grants management.”

The U.S. Department of Transportation said it concurs with the report’s findings and will report within 60 days its plans to implement the recommendations.

Nippon Sharyo Says it Will Complete Car Order

May 23, 2016

A passenger car builder that has fallen behind schedule on constructing 172 new bi-level cars for Amtrak corridor service in the Midwest and California said it is committed to finishing the project.

Work at the Nippon Sharyo factory in Rochelle, Illinois, ground to a halt last year when a prototype car failed a compression test.

Nippon SharyoNippon Sharyo has laid 98 workers at the plant and the federal funding for the project may be in jeopardy if the order is not completed by Sept. 30, 2017.

In statement published on the website of Trains magazine, the Japanese company said it is still working to resolve engineering issues that caused the prototype car to fail the test.

The statement also said completion of the entire order is likely to be delayed.

“(We) have been diligently working with the customer and stakeholder to remedy the situation while ensuring that all the rigorous FRA safety standards and requirements are met in order to deliver a safe, high quality, 100-percent Buy America compliant car to the customer,” Nippon Sharyo said in the statement.

“Nippon Sharyo is committed to this project and to the growth and success of its manufacturing facility in Rochelle.

Although we are currently facing difficult times, and some temporary labor reductions, we are committed to investing in our workforce, getting production back on schedule, and being successful and prosperous in the near future.”

Passenger Car Order at Risk of Losing Funds

May 18, 2016

A project to build 130 passenger cars for use on corridor trains in the Midwest and California is in danger of being sidetracked because it might lose its funding.

Trains magazine reported that the project is in danger of losing $551 in federal funds, which will be returned to the U.S. treasury if not spend by Sept. 30, 2017.

Nippon SharyoThe cars are to be built by Nippon Sharyo in Rochelle, Illinois, but little progress has been made since a prototype car failed a compression test last fall.

A car shell buckled under the compression of the required 800,000 pounds, for reasons that the manufacturer has not yet identified.

In the meantime, Nippon Sharyo has suspended work on the cars and laid off 98 workers.

The company has invested $50 million in the facility as part of a federal law’s “Buy America” provisions.

Bruce Roberts, chief of California’s Division of Rail in the Department of Public Transportation, the agency overseeing the procurement, said Congress could extend the funding, but that seems unlikely.

He said Nippon Sharyo is “actively working” on a redesign of the cars to address the test requirements, and together Caltran, the Illinois transportation department, and the Federal Railroad Administration are “working with (the manufacturer) to explore other funding options.”