April 09. 2012 9:15AM

Talgo plans layoffs in Milwaukee

Train manufacturer Talgo this week has begun the legal process of notifying its workforce and the state that it will lay off employees at its Milwaukee facility. The company has about 80 employees in Milwaukee.

The company established a facility at 3533 N. 27th St., in the former Tower Automotive and A.O. Smith plant, now called Century City, on Milwaukee's north side. There, Talgo has been manufacturing new trains for Wisconsin and Oregon. The State of Wisconsin purchased its trains, to serve the Amtrak line between Milwaukee and Chicago, for $71.8 million.
However, the state Legislature's refusal to approve funding for a maintenance facility for the Talgo trains has created uncertainty about the future of the company's Milwaukee operations.
The Legislature's Joint Finance Committee recently rejected a Wisconsin Transportation Department (DOT) request for $2.5 million in bonding for design costs for a passenger rail maintenance facility in Milwaukee.
Republican legislators on the Joint Finance Committee said they do not want to spend any more money on the trains. However, Democrats argued that without a maintenance facility, the trains that the state purchased from Talgo could end up being unused and Talgo might decide not to build any more trains at the Milwaukee plant.
The DOT, presumably with Gov. Scott Walker's blessing, has been considering two sites in Milwaukee to build a train maintenance facility. One site is a 4.36-acre parcel located at 6th Street, just west of the downtown Intermodal train and bus station. The cost to build a facility at that site is estimated at $58.8 million to $74.6 million. The other site is a six-acre parcel located at 17th Street in Menomonee Valley. The cost to build a facility at that site is estimated at $53.7 million.
The Century City site could be used as a permanent maintenance facility at a cost of $30 million for track upgrades, a Talgo spokeswoman said.
Milwaukee Mayor Tom Barrett, who is running for governor as a Democrat, said the DOT submitted inflated cost numbers for the cost of the train maintenance facility to legislators.
Barrett and Congresswoman Gwen Moore (D-Milwaukee) met with Talgo workers this morning and urged the legislature to reconsider the funding for the maintenance facility to protect the Milwaukee jobs.
Walker had rejected $810 million in federal funding that had been allocated by the Obama administration to Wisconsin to upgrade the Amtrak rail line between Chicago and Milwaukee and build a high-speed rail line connecting Milwaukee to Madison. The funds would have covered the cost of a maintenance facility for the Talgo trains, which would be used on the Amtrak Hiawatha line between Milwaukee and Chicago.