Colorado Railcar Manufacturing, the company slated to provide the train sets for the potential Kenosha-Racine-Milwaukee (KRM) commuter rail line, has closed its doors due to a liquidity problem.  The company was the only supplier of diesel multiple unit (DMU) trains that met FRA standards to operate on the same tracks as freight trains.  So the battle over a recently released (and highly-flawed in our opinion) cost report might have to be tabled at this point.

Does this mean that the KRM line has no chance of going forward?  Absolutely not.  We still think Governor Doyle should include the ability for the RTA to collect up to a .5% sales tax in his budget proposal, due out sometime in mid-to-late January.  The lack of an American manufacturer of DMU’s that meet FRA’s standards is a void that will likely be filled by the market, especially as more and more metro areas aim to start new commuter rail programs.

To understand the importance of Colorado Railcar, it’s important to look at the laws and options surrounding transit systems.  Fortunately Fred Hanson, General Manager of Tri-Met in Oregon, wrote a great article breaking down why DMU’s from Colorado Railcar are important to new transportation systems.

Fact No. 1: In purchasing the railcars for WES, TriMet had to comply with the federal Buy America law. Only one American firm — Colorado Railcar Manufacturing — manufactures the vehicles we needed.

Fact No. 2: The Diesel Multiple Unit trains selected for WES are the only ones that meet federal safety standards allowing commuter trains to operate with active freight trains. Portland & Western Railroad controls the tracks upon which the WES trains will operate, and the company required that freight trains continue to operate on the tracks along with commuter trains. The DMU trains were also selected for this corridor because they provide for ease of operation (an operator cab at both ends), their size fits the Beaverton Transit Center, and TriMet can add future service outside the current “rush-hour only” schedule and safely share the tracks with freight trains.

The Buy American law appears not to be the only thing keeping foreign DMU train sets off American tracks.  They apparently do not comply with FRA standards that require the trains won’t crumple in a high-speed collisions.

What’s the solution?

I think it’s time for the state of Wisconsin and the City of Milwaukee to look at supporting Super Steel, our local railcar manufacturer (for clients such as Metra) to become a manufacturer of DMU trainsets.  Not only may it position Milwaukee to be a leader in the industry, but it will put more people to work in Milwaukee.

The title of this post is purely fiction at this point, but is what this writer believes should happen.

Undoubtedly you’ve heard by now that the General Motors factory in my hometown of Janesville is closing. What many (politicians and residents alike) are not considering is the massive trickle down effect this is going to have on the rest of Janesville as a large source literally abandons the city. Sure the UAW has ensured that many of the employees at General Motors are not going to feel any financial pain for a long-time, but thousands of others are not as fortunate. Employees of Janesville-based GM part suppliers (of which there are many) are going to receive next to nothing as they lose their jobs in coming years.  And that’s just the start

This massive unemployment will have the effect of putting the hurt on numerous other local companies and institutions. The School District of Janesville will be faced to downsize in the face of falling property tax values (despite just having passed the largest referendum in Wisconsin history). Mercy Health System will certainly feel some pain as the number of patients remains largely steady, but their ability to pay diminishes. Oh, and the massive number of chain food choices (both fast and sit-down) that exist along Milton Avenue, look for their numbers to greatly diminish.

Assuming nothing drastic happens (read: no large employers opens shop in town or there is no mass migration from the city) Janesville residents are largely looking at a future of under-and-un-employment. Many of the GM employees will be offered jobs at other plants, but that doesn’t include suppliers and those who relied on serving them (the service industry the city seems to want to tout now).

To make matters worse, long-time Janesville employer Gilman (now split into two companies ThyssenKrupp Krause Inc. and ThyssenKrupp Drauz Nothelfer) announced they were closing and eliminating all 140 jobs. This was a local employer that at one time not too long ago employed nearly 500 people in Janesville, my father included.

Politicians, including Janesville-natives Senator Russ Feingold and Representative Paul Ryan, are already calling for aid packages or more money to be sunk into the city to encourage new employers in Janesville. Most of the companies that have recently opened (or considered opening) shop in Janesville are in the warehousing and distribution industry, an industry highly susceptible to losses from rising fuel costs (much like the SUV’s made in Janesville are). Spending money on tax breaks and credits to attract industry to Janesville seems like a losing battle does it not? Especially since they did just that a few years ago, and now are asking General Motors to pay the state back.

The fact is that companies will either consistently search for the best tax deal (leading to a long-term losing game for cities) or for the best existing environment. Beloit largely has Janesville beat on location in the wake of soaring fuel costs. Beloit is located at the intersection of Interstate’s 43 and 39/90 and is closer to Milwaukee, Rockford, and Chicago. Why would the state look to continue to pour money into Janesville then? Good question.

The state should instead take a radical approach. Jim Doyle and company should largely encourage the unemployed in Janesville to move to Milwaukee (or Madison). Why? There are more jobs in the Milwaukee area, and Milwaukee certainly has the capacity to create more jobs (look no further than the redevelopment occurring Menomonee Valley and soon the 30th Street Corridor). The old adage of “it takes money to make money” holds true in the globalization era. The big cities like Chicago are getting bigger and stronger, while the stagnant towns like Janesville and many other manufacturing towns are getting smaller.

The ironic fact is that a migration of residents to Milwaukee could actually reduce the unemployment in Milwaukee. Creating a larger base of skilled/trained individuals for jobs should only attract more companies to the region, or to expand operations in the case of existing ones.

How do we achieve this migration? Create marketing plans for Milwaukee, bring in relocation specialists to help the unemployed find work in Milwaukee, and offer tax incentives for relocating families.

While Wisconsin politicians for obvious reasons can not advocate residents to move to Chicago, the Windy City offers a substantial number of opportunities, arguably more than Milwaukee.

How do we preserve home values in Janesville and help Janesville adjust structurally? Implement an aggressive urban growth boundary that prevents building outside of designated areas to preserve the value of existing homes. This will not only limit of the dilution of home values, but encourage urban infill (through the redevelopment of existing properties) and encourage Janesville to kick to structurally kick its oil habit through reduced drive distances.

The City Council of Janesville must also actively seek to make opening businesses in Janesville as easy a process as possible. They should also seek to improve the efficiency of existing employers.

Wisconsin and the Wisconsin Department of Highways (formerly Transportation) should also implement a legitimate mass-transit from Janesville to Milwaukee. While Van Galder/Coach USA provides a route to Madison, and Chicago, there is not a mass-transit to Milwaukee. In fact when I go to visit my parent’s house, I must first take a bus to Madison, then transfer to another to Janesville.

Janesville has a substantial agricultural base on which it can seek to orient itself around in the “ethanol era” where food prices currently only go up.

The most difficult thing that must be done in Janesville is to redevelop the Delevan Drive Industrial Corridor, for as it turns out Gilman and General Motors were not only in the same city, but next-door neighbors. This will likely mean dividing those properties into smaller units so businesses can locate there.

Wisconsin needs to do everything in its power to avoid Janesville becoming like Flint and so many other towns that have lost their largest employer. That starts with not pouring money into Janesville to give residents false hope.