March 04. 2013 9:00AM

Wisconsin manufacturers might still be in line for high-speed rail production

Energy & the Environment

By Erica Breunlin

  
A lthough a high-speed rail line that was proposed for Wisconsin is instead being built across the state of Illinois just south of the border, some Wisconsin manufacturers ultimately may benefit from the expansion of high-speed rail across the nation anyway, according to a new report by the Environmental Law & Policy Center (ELPC).

The organization has identified 73 Wisconsin supply chain companies —mostly manufacturers — and more than 460 companies throughout the Midwest that have the potential to gain production and jobs from work to build high-speed passenger rail lines across the nation.

The Chicago-based environmental advocacy organization named the companies in a recently released report titled, "Midwest High-Speed Rail Supply Chain," which documented the possible benefits of high-speed passenger rail construction on manufacturing jobs and economic growth.

"We at the Environmental Law & Policy Center for a very long time have spoken about the environmental and transportation benefits of high-speed rail," said Kevin Brubaker, deputy director of ELPC. "We wanted to take a hard look at the economic development and job creation associated with actually building a network."

The report looked at supply chain companies that manufacture necessary materials and components, including seats, lights, flooring and brakes that original equipment manufacturers (OEM) use in making trains.

As passenger rail has gained more riders in the United States, rail advocates have pushed for development of high-speed rail service. In 2012, Amtrak reported new records of annual increases in ridership for nine of the last ten years, and ridership across the country has increased by 50 percent from statistics in 2000, the ELPC report said.

"Roads are more congested," Brubaker said. "Our airports are increasingly difficult to use. Meanwhile rail service continues to improve, so as the other modes continue to get worse, rail gets better and that's only going to continue."

A combined $782 million in federal funds is being distributed among California, Illinois, Iowa, Michigan, Missouri and Washington to buy 33 quick-acceleration locomotives and 130 modern bi-level passenger rail cars for high-speed rail service, according to the ELPC report.

In September, California officials announced contracts for next generation railcars in line to be purchased with federal funds, the report said. Nippon Sharyo, a railcar manufacturer based in Japan, secured the procurement bid. The railcars are being constructed at its Rochelle, Ill., production facility, which opened for operation last July.

Illinois will announce contracts for the quick-acceleration locomotives later this year.

While OEMs such as Nippon Sharyo look nationally at supply chain companies that can make the parts they need, they typically prefer companies located relatively nearby for cost savings on delivery as well as easier communication and overall logistics, according to Brubaker. So, Midwest companies' close proximity to the Rochelle facility strengthens their attempts to secure bids, Brubaker said.

Milwaukee Composites, based in Cudahy, which serves OEMs and transit authorities globally, produces phenolic transit composite floors for high-speed railcars, along with subway cars and buses. The company is also supplying Nippon Sharyo with floor panels for 160 bi-level trains for Chicago Metra commuter rail trains (which is not high-speed rail).

Floor decks of trains have historically consisted of plywood or ply metal – heavy materials that are susceptible to moisture damage and don't comply with fire safety. Milwaukee Composites' reinforced plastic composite floor deck is the only product of its kind in the world and is able to pass a 30-minute fire test, said president and owner Jeffrey Kober. The floor panels, which are customized for each individual transportation project, also typically last the life of a rail car, are lighter weight and resist moisture.

"And the importance there is every pound of weight we save can allow the passenger rail car to run more efficiently, use less electrical energy, and we can actually haul more people," Kober said.

Milwaukee Composites will supply its floor panels to Nippon Sharyo over the next two and a half years.

The manufacturer has also been involved in an ongoing aftermarket program, the Amrail Retrofit Program, for Chicago Metra to renovate old floors of used railcars.

While the market for railcar supply chain companies is competitive, Kober has confidence in the quality of his floors.

"It's competitive, but we have a product that is innovative and it is one of a kind and it has lasting value so that customers are buying the value," Kober said.

As high-speed rail expands and OEMs seek supply companies, Kober is also confident in the quality of the state's manufacturing force.

"There's no question that industrial base, there are going to be suppliers in Wisconsin that are going to get jobs," he said.

Other qualified Wisconsin companies cited in the Environmental Law & Policy Center report that could benefit from high-speed rail construction and could become part of the supply chain include: Rockwell Automation Inc., Super Steel Products, Avalon Rail, Capitol Stampings, General Electric, General Plastics, Kracor, Monarch, Motive Equipment, NRE Wheel Works, Technical Metal Specialties, and Wagner.

Wisconsin Gov. Scott Walker's rejected $810 million federal grant to construct a high-speed passenger line between Chicago through Milwaukee to Madison. The state's rejection of the funds led the U.S. Department of Transportation to redistribute them to other states.

A line is now being built just south of Wisconsin across the state of Illinois from Chicago to the Quad-Cities, creating hundreds of jobs for construction in that state.

To identify supply chain companies that could potentially benefit from the growth of high-speed rail lines, ELPC spoke with existing manufacturers about their suppliers, relied on lists of trade associations and conducted their own phone- and Internet-based research.

The report is a first-order examination of firms in Illinois, Indiana, Iowa, Michigan, Minnesota, Ohio and Wisconsin that could be qualified to compete for contracts with OEMs, Brubaker said.

Now that the report has been published and is accessible to the public, Brubaker said he expects more firms will step forward to vie for contracts, as well.

The ELPC hopes to illustrate to policymakers how investments in high-speed rail could add to manufacturing jobs in the Midwest.

"So by building high-speed rail, we can not only improve transportation networks and connect cities, but we can also revitalize the manufacturing capacity here in the Midwest and create jobs and economic opportunity," Brubaker said.

The full report is available at http://elpc.org. n

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