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As Contract Vote Nears, Rail Firm Pushes Its Leverage

By Eric Richardson
Published: Wednesday, May 27, 2009, at 10:52AM
Gold Line Yard Eric Richardson [Flickr]

Light rail vehicles sit in the Gold Line's light maintenance yard in a 2007 file photo.

In the lead-up to a Metro board vote on whether or not to pick up a $300-million option for light rail cars, Italian firm AnsaldoBreda upped the stakes by saying that it intended to build a manufacturing plant in Los Angeles if given the deal. The board delayed action.

A day before the option contract again comes up for a vote, AnsaldoBreda will this afternoon participate in a job fair at L.A. Trade Tech.

Earlier this year, Metro expressed displeasure with AnsaldoBreda's performance delivering fifty light rail vehicles it had ordered for the Gold Line's Eastside Extension. It claimed that the cars were overweight, use too much electricity and that delivery has been far behind schedule.

The firm's offer to open a manufacturing plant in the city of Los Angeles was an attractive carrot, particularly to Mayor Antonio Villaraigosa, who prominently featured clean technology and green jobs in his recent State of the City address. While the firm has several final assembly plants in the U.S., this would be their first manufacturing site outside Italy.

Last week, the board of the Community Redevelopment Agency gave its staff the go-ahead to negotiation a deal with AnsaldoBreda for 14.3 of the 20 acres at its proposed CleanTech Manufacturing Center just south of Downtown. Lease negotiations are conditioned on Metro exercising its option with the firm.

Today, the rail car manufacturer will join the Los Angeles County Federation of Labor and the AFL-CIO for a job fair at L.A. Trade Tech. Labor has been a big supporter of AnsaldoBreda's plans, and the March Metro board meeting had a heavy turnout by hardhat-wearing union members.

While the promise of manufacturing jobs is a tough political sell to turn down, it remains unclear whether the Metro board will put aside its concerns in favor of economic development. The L.A. Times reports today that Metro CEO Art Leahy is recommending the option not be picked up, saying that he could "find little reason for recommending exercise of the options."

The board could further delay action on the option. The agenda item for Thursday's meeting asks that the board "CONSIDER extending the expiration of the option, exercising the option, or allowing expiration" of the AnsaldoBreda contract.


As a sidebar, AnsaldoBreda representative Fabio Ficano has been outgoing with blogs and media. You can find Q&A with Ficano in the comments section of this initial Streetsblog report from the March board meeting and this followup thread. He also wrote an opinion piece for the L.A. Times, responding to a critical column.

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