The Italian firm AnsaldoBreda was awarded a contract for 100 light-rail cars, in addition to the 50 already ordered. The city was swayed by AnsaldoBreda's comittment to build a 240,000-square-foot green-manufacturing plant on a 14-acre, city-owned industrial parcel downtown.

This LA plant would position the company to compete for future rail contracts, for the MTA, California’s proposed high-speed rail system, but also for the high-speed rail authority for virtually every transit facility in the hemisphere." 

AnsaldoBreda also committed to use union labor to build the plant, and pay the living wage which would be at least $10.30 an hour.

The Los Angeles County Metropolitan Transportation Authority board Thursday awarded a contract to the Italian firm AnsaldoBreda for 100 additional light-rail cars, clearing the way for a new rail manufacturing plant that the company has promised to build with union labor in downtown Los Angeles.

The decision was a victory for Mayor Antonio Villaraigosa, who said the manufacturing plant would be a catalyst for his plan to attract clean technology companies to a four-mile-long industrial corridor straddling the Los Angeles River. 

“This means that L.A. is going to be the center of green jobs in the nation," Villaraigosa said after the 8-3 vote. "This facility will not only provide rail cars for the MTA, but for the high-speed rail authority for virtually every transit facility in the hemisphere." 

Though the board was not permitted to weigh the possibility of local jobs in its decision, the vote followed impassioned speeches from union workers who said many of their colleagues were out of work and losing their homes. 

Concerned about the company’s past performance, three MTA board members voted no:...(and) favored seeking competitive bids.....Breda has failed to deliver on time in two previous MTA contracts, and the current contract is already three years behind schedule in delivering certified rail cars.

The negotiations dragged on for much of this year because of the MTA staff’s frustrations with the firm’s work under its base contract for 50 cars. Under the new deal, AnsaldoBreda must reduce the weight of their cars, which are 6,000 pounds heavier than specified, and make them compatible with the rest of the fleet. 

Art Leahy, the MTA’s chief executive, recommended against exercising the contract options. But just before the vote, AnsaldoBreda officials circulated an e-mail indicating that the firm’s parent company, Finmeccanica, would back AnsaldoBreda’s financial guarantees. 

In addition to a $300-million performance bond, the company offered a $75-million irrevocable letter of credit that could be tapped by the MTA if the company fails to perform. If exhausted, the fund would be replenished by AnsaldoBreda up to a cap of $300 million.

Villaraigosa and other board members said those financial terms were unprecedented. "Nobody has ever secured this kind of guarantee," the mayor said. 

AnsaldoBreda has contracted with the green-building firm Shangri-La Construction to build a 240,000-square-foot manufacturing plant on a 14-acre, city-owned parcel at 15th Street and Sante Fe Avenue. 

Villaraigosa’s new chief deputy mayor, Jay Carson, previously worked for Shangri-La on the project, but has recused himself from projects involving his former company. 

Cecilia Estolano, who is overseeing the rail plant project as chief executive of the city’s Community Redevelopment Agency, noted that AnsaldoBreda has agreed to pay the living wage to full-time workers at the plant, which would be at least $10.30 an hour. "It’s a major step forward for rebuilding L.A.’s economy," she said. 

AnsaldoBreda Inc.'s president, Giancarlo Fantappi?, said the MTA set "very, very tough terms for us to comply with," but that the move to Los Angeles would position the company to compete for future rail contracts, including on California’s proposed high-speed rail system.

“We are here to stay," Fantappi? said. "Being here, logistically, will be much easier for us." 
 

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