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Pentagon spending bill boosts Springfield’s CRRC; U.S. Rep. Richard E. Neal added language to help rail car manufacturer

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Compromise language in a Pentagon spending bill passed Wednesday evening by the U.S. House of Representatives will allow Springfield’s CRRC MA factory to compete for contracts making rail cars for American transit agencies and not fall under a federal ban meant to stifle the Chinese-owned company.

Under language inserted in the National Defense Authorization Act through the efforts of U.S. Rep. Richard E. Neal, D-Springfield, CRRC has a grandfather clause allowing it to continue to compete for contracts making cars for transit systems with which it already does business. That list includes Boston’s MBTA, Philadelphia’s SEPTA and the Los Angeles Metro.

CRRC also has a two-year grace period to compete for any transit contract except with the Washington Metropolitan Area Transit Authority.

The compromise keeps nearly 200 employees working at CRRC’s $95 million factory in East Springfield.

“I am happy that I was able to work with my colleagues in the Senate to amend the NDAA language to allow CRRC Springfield to continue to work on secured bids,” Neal said in a statement. “This compromise means that CRRC will be able to maintain and protect the nearly 200 employees based out of the Springfield facility. Employees will continue their work without disruption to existing contracts with public entities like the MBTA; which has currently placed orders for Red & Orange Line railcars at a value of $800 million. These railcars are being built for Massachusetts residents by Massachusetts residents at a competitive wage with negotiated health and retirement benefits. This employer is important to Springfield and the region.”

Neal said Wednesday that he believes more MBTA cars will be built in Springfield.

“Well, the Trump administration was determined to do something about CRRC, and they had some allies across Congress,” Neal said. “I was pretty vigor in my pursuit of the solution and we prevailed.”

Neal is chairman of the powerful House Ways & Means Committee. The conference report for the defense authorization bill cant move forward without the signature of the Ways & Means chairman.

“I went back and forth with the administration,”Neal said. “Over the last two months this was intense.”

Trump’s ongoing trade disputes with China have driven up import tariffs on Chinese rail car components, however. This makes CRRC cars more expensive.

The cars are shipped as shells from China and fitted out here in Springfield with motors, electronics and interiors.

Sixty percent of the car components are US-made.

CRRC also has a U.s. plant in Chicago making cars for the transit system there.

CRRC plans to hire 120 more employees in the next year, Neal said.

“This will give them an opportunity to continue to expand their footprint,” he said.

Springfield Mayor Domenic J. Sarno praised Neal’s efforts.

“This not only saves good paying manufacturing jobs at our CRRC plant, just as important, it allows for expansion to create more new jobs,” Sarno said in a statement. “‘Richie’ has continued to show how to work in a bipartisan fashion to get positive initiatives done for Springfield, his district and our nation.”

John Scavotto Jr., business manager of Sheet Metal Workers Local 63, thanked Neal on behalf of the CRRC plant’s union workers.

“His tenacity on Capitol Hill saved jobs for hundreds of workers right here in his own backyard — Western Massachusetts,” Scavotto said. “This was no easy feat yet he was able to negotiate CRRC MA’s ability to continue to execute and identify rail contracts which is remarkable. We can’t express how grateful we are for his unwavering support and hard work to ensure our City experiences economic growth and job creation. As we approach the holidays we thank Chairman Neal for the early Christmas present. We are proud to have him representing Western Massachusetts.”

The $738 billion compromise defense bill also calls for the establishment of a Space Force and will grant up to 12 weeks of paid parental leave to the entire federal workforce. Now it goes to the Senate where it faces an up-or-down vote. President Donald Trump has said he will sign the bill.

This bill includes other important provisions relevant to Neal’s Western Massachusetts district:

  • It closes a loophole to allow National Guard bases to access Defense Environmental Remediation Account funds to address PFAS exposure and contamination. In addition, the bill bans the Defense Department’s use of firefighting agents containing the harmful chemicals by 2024. Westfield is dealing with PFAS contamination in its drinking water supply that originated from Barnes Air National Guard Base. Earlier this month the city received a $1.35 million reimbursement for related costs from the Air Force. Neal and his staff helped Westfield get the money.
  • The bill authorizes $75 million for the Defense Community Infrastructure Program, which helps state and local governments address infrastructure and facilities deficiencies in areas surrounding military bases like Barnes and Westover Air Reserve Base in Chicopee.
  • It authorizes funds for projects that benefit companies such as General Dynamics in Pittsfield, which makes components for small Navy combat ships, and Warren Pumps in Warren.

The bill is a help to CRRC, whose opponents wanted a blanket ban on the use of federal funds to buy rail cars from the company. Competing manufacturers accuse the Chinese government of selling cars to U.S. transit agencies below cost to drive other companies out of business.

CRRC’s bid to make cars for Washington’s Metro subway was especially worrisome for critics. Some feared Chinese spy agencies would install electronic surveillance equipment on CRRC subway cars serving the Pentagon in order to gather intelligence.

Speaking by phone Wednesday from Washington, Neal dismissed specuilation about the “spy cars”.

“The never established any facts talking about that,” he said.

The CRRC plant, at 655 Page Blvd., already has 184 employees, with 122 of them union production workers.

It’s continuing to hire as production ramps up on the MBTA Orange and Red line cars and CRRC prepares to begin bi-level commuter rail cars for Philadelphia.

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 the Southeastern Pennsylvania Transportation Authority ordered 45 double-decker 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.

CRRC built its plant on what was once the Westinghouse plant, an industrial zone that had been cleared for possible casino development prior to CRRC winning its contract.

I’I remember what this at site meant to Westinghouse when I was a kid," Neal said. “That was the center of industrial production.”

The Westinghouse Electric opened in 1915 and grew to employ 4,500 by 1930. It remained one of the city’s major employers through the 1950s.