Talgo Coming Back to Milwaukee
Spanish train manufacturer will overhaul Los Angeles subway cars in Century City.
Spanish train manufacturer Talgo will reopen their facility in the Century City business park. The news was announced by Mayor Tom Barrett during his 2017 budget address before the Common Council. The facility at 3533 N. 27th St. has most recently been used by crews assembling the glass curtain wall for the Northwestern Mutual Tower and Commons, but Talgo has maintained a lease on a 25,000 square-foot section of the building for storage. As part of the deal, Talgo will expand their operations in the building and create dozens of jobs at the facility.
Talgo will be rebuilding 74 heavy rail cars for the Los Angeles County Metropolitan Transportation Authority (LA Metro). The $73 million, 56-month contract will overhaul vehicles originally placed into service in the early 1990’s. The cars were originally manufactured by the now-defunct Italian firm Breda.
The cars are in use on the busiest lines in the Los Angeles subway system, running on the Red and Purple lines that serve a combined 149,096 daily rides. That total is greater than the daily ridership of the entire Milwaukee County Transit System. Service began on the lines in 1993.
Mayor Barrett has been actively involved in trying to bring Talgo back to Milwaukee, including meeting with the evaluation team from LA Metro when they did a site visit. Barrett slammed Governor Scott Walker during his budget address, noting “As hard as the governor worked to kill this project, we worked even harder to build a solid relationship with the company. And that paid off.” Talgo hopes to expand their portfolio of business in the United States to include work on subway and light rail vehicles, expanding beyond their intercity rail offerings.
Talgo had manufactured four of their Series 8 trainsets at Century City. Two of those Milwaukee-made trains are now in service with Amtrak’s Cascades Service, running between Eugene, Oregon and Vancouver, Canada with stops along the way including Portland and Seattle. The other pair, originally intended to operate on the Amtrak Hiwatha Service between Chicago, Milwaukee and Madison will finally enter service in California. The company employed more than 80 people in Milwaukee to build the trainsets.
The move comes as a surprise, given that the Talgo CEO blasted Walker in a 2012 a story by Urban Milwaukee, complaining that “Gov. Walker does not keep his word. It’s like we’re talking about a Third World country, where people don’t have respect for their contracts.” The state and Talgo finally settled a lawsuit in 2015, with the state paying an additional $9.7 milion to Talgo for the trainsets. In total, the state will have paid nearly $50 million for trains that it never owned.
As part of the settlement, Talgo maintains ownership of the trainsets and can sell them to another buyer. If Talgo were to sell the trains, 30% of the net proceeds from a future sale are required to be returned to Wisconsin (up to $9.7 million). Wisconsin had originally agreed to buy the trainsets in 2009 for $47.5 million as part of Governor Jim Doyle‘s jockeying to win a high speed rail grant. Doyle’s bet did pay off, Wisconsin won a $810 million high-speed rail grant to connect Chicago, Milwaukee and Madison, but the funds were revoked by the federal government after Walker was elected and promised to end the project.
Talgo has yet to sell the trainsets, and instead leased them to a California transportation agency in August on a five-year deal for $15 million. They will operate on the 351-mile rail corridor between Los Angeles and San Luis Obispo, offering a travel time reduction of 25 minutes. The trains will be operated by the Los Angeles – San Diego – San Luis Obispo (LOSSAN) Rail Corridor Agency. LOSSAN received an $82 million grant from the state of California for improvements to the corridor. The LOSSAN corridor provides 7.2 million annual rides on over 150 daily passenger trains including Amtrak Pacific Surfliner intercity service and Metrolink and COASTER commuter trains.
The facility Talgo will operate in is owned by the city-affiliated Century City Redevelopment Corporation. The REV Group, led by Tim Sullivan, will soon begin manufacturing a prototype “Liberty” vehicle for the United States Postal Service in the building and hopes to win a contract that would create about 1,000 jobs at Century City to build the vehicles. REV Group is competing against five other bidders. The winner is expected to be announced in 2018.
As our photos capture, the original trainsets for Wisconsin were removed from the Milwaukee facility in 2014. Before the lease to California, they had been in storage at Amtrak’s Beech Grove, Indiana facility. It was previously believed that Michigan may purchase the trainsets, but that deal never came to fruition.