In the News

SPRINGFIELD — The 122 production employees at CRRC MA’s mammoth rail car factory on Page Boulevard celebrated Monday with U.S. Rep. Richard E. Neal to mark a Washington compromise that allows the company to seek new contracts despite opposition to the Chinese-owned manufacturer.

“This was a victory for good policy and common sense,” said Neal, a Springfield Democrat and chairman of the House Ways & Means Committee. “This facility got caught up in international trade tensions.”

Those trade tensions, coupled with fears the Chinese government is seeking to create a monopoly in the worldwide transit car industry — or that the government might use the cars to spy on Americans or threaten national security — led some lawmakers to call for a ban on the use of federal money to pay for rail and subway cars built by Chinese manufacturers.

"The thing to remember here is that there is no domestic competitor," Neal said.

CRRC still faces new 25% tariffs on some Chinese components. The new import taxes were imposed as part of President Donald J. Trump’s trade war with China.

Neal on Monday said he's working with the U.S. Trade Representative Robert Lighthizer.

"With the two largest economies in the world, it is natural there would be some trade tensions," Neal said.

But he pointed to his role in successfully negotiating the new United States-Mexico-Canada Agreement, which took buy-in from the Trump administration and from organized labor as well as the Canada and Mexico.

CRRC will be able to compete moving forward, Neal said, under a under a compromise announced two weeks ago. As part of the $738 billion compromise defense bill, CRRC is free to seek new business under limited conditions:

A grandfather clause allows CRRC MA to contract again to sell more cars to its current customers including Boston’s MBTA, Philadelphia’s SEPTA and the Los Angeles-area subway system
A two-year grace period allows CRRC to bid for any transit contract other than the Washington, DC Metro. CRRC’s opponents fear that the Chinese-built cars could be used to spy on workers commuting to and from the Pentagon.
Neal said at Monday’s event that he has encouraged CRRC Ma to seek more U.S. investment during that two-year grace period in hopes that he can persuade lawmakers to extend it indefinitely.

For CRRC, this means it can keep getting more orders to keep the factory running. “And do what we do best, bring more good manufacturing jobs to Western Massachusetts,” said Jia Bao, President of CRRC MA.

Without the agreement, work would have dried up after CRRC MA completed its current contracts.

“We would have had to shut off the lights,” said State Rep. Bud Williams, D-Springfield.

Williams attended the ceremony with City Councilor Orlando Ramos and Mayor Domenic J. Sarno, and with John Scavotto of Sheet Metal Workers Local 63.

The prospect of not being about to bid for more work frightened Scavotto, who described meeting with Sarno and then with Neal.

"My brothers and sisters are going to lose their jobs and there isn't anything we can do about it," Scavotto said.

Sarno said the outcome is a testament to Neal’s clout and the respect he has earned in Washington.

Neal faces a primary challenge from Holyoke Mayor Alex B. Morse.

In 2014, CRRC received a $566 million contract from the MBTA to build 152 Orange Line cars and 252 Red Line cars in Springfield. In 2016, the state upped the order with another 120 Red Line cars, with production on those set to begin in June 2022 at a cost of $277 million.

Massachusetts went without federal money on the Red Line and Orange Line projects so it could mandate that assembly work be done in the state. The idea was to create a local rail car industry. CRRC won the bid.

In 2017, CRRC got a contract to build 64 subway cars for the Los Angeles metro in an order that could be worth as much as $647 million.

The same year, the Southeastern Pennsylvania Transportation Authority ordered 45 double-decker commuter rail cars from CRRC at a cost of $137.5 million. Today, the cost is up slightly to $138 million. SEPTA has an option to purchase 10 more cars.

All that’s enough work to keep the plant busy until 2025, said Vince Conti, director of business administration at CRRC MA.

“That’s the thing with this industry. If you get a contract, it takes at least two years before you see the cars on the factory floor,” he said. “It takes that long to ramp up.”

And it’s taken CRRC longer to ramp up to fill the T’s orders, Conti said. Problems with component suppliers, worker training and technical changes to the car’s specifications all played into those delays. At this point, CRRC has shipped 10 Orange line cars in five married pairs and has only just begun work on the Red line cars. That’s 60 to 70 cars behind where the company expected to be and the timeline it promised the T.

"They are not happy," Conti said. "But we've had several good meetings with them and they understand the difficulties we've had ramping up,"

A new production system goes into effect in 2020 and workers have gone through new training programs, he said.

CRRC has 122 production workers now and recently hired another 41, with 15 due to start jobs in January and another 65 in the rest of 2020.

Production will ramp up on MBTA Red line cars this year. Work begins on the SEPTA order for Philadelphia in the spring of 2020.

Cars come to Springfield as unfinished metal shells built in China. They shipped by sea to the port of Albany in New York, and then brought by truck to Springfield.

There, workers install all the electronics, interiors, motors and other equipment. More than 60 percent of the components are U.S. made, in accordance with the CRRC contract.

Neal said Gov. Charlie Baker, under fire for the state of the T, has told him Springfield will get more work as it orders more equipment. It’s only fair, Neal said, because Western Massachusetts taxpayers support the T. This is how they can get the benefit.

CRRC built its $95 million factory, with an assembly floor big enough to hold three-and-a-half football fields, at the old Westinghouse Electric site at 655 Page Blvd.

The site was cleared for possible casino development before CRRC took over, although CRRC did rehab an old Westinghouse building as its headquarters.

CRRC is also building a new warehouse at the factory site.