Why Talgo Stays in Milwaukee

Spanish train manufacturer Talgo continues to operate its Milwaukee plant despite the fact that the State of Wisconsin breached a contract and never placed the two trainsets it ordered into service. In fact, it’s even looking to hire 60 people in the coming months.

The company, having settled with the state, is now pivoting the plant into a new line of business: refurbishing rail equipment. The company just took receipt of its first delivery of mid-life commuter rail cars from the Los Angeles area and will begin rehabbing them. It’s also refurbishing subway cars for Los Angeles. Passenger trainsets, similar to those made for Wisconsin, operate on the Amtrak Cascades Service in the Pacific Northwest.

So with all of its business on the country’s West Coast, why stay in Milwaukee? “The combination of technical conditions and trust,” said Talgo’s US CEO Antonio Perez. He praised the trust he has in Mayor Tom Barrett and Department of City Development Commissioner Rocky Marcoux as well as the skilled workforce. High praise given that the CEO once compared Scott Walker‘s governing of Wisconsin to that of a “third world country” after his administration voided a deal to buy trainsets. “They always honor what’s promised,” said Perez of Barrett and Marcoux.

A host of other technical factors keep Talgo here as well, as Perez quickly ticked off. He cited the mainline access to the United States railroad system, the city’s flexibility with leasing approximately 150,000 square feet in the former Tower Automotive campus, the ability to train workers on site and the tooling on-site that the city and Talgo have invested in as reasons Talgo doesn’t head elsewhere.

The company, which current employs 27 people at its Milwaukee plant, intends to add 63 people to complete the two refurbishment contracts. Perez said the commuter rail job would require 40 people for the subway contract and 50 for the commuter rail job. The latter work is scheduled to run through March 2023 and an option could extend it to March 2026.

The jobs announcement is music to the ears of Milwaukee politicians. “It’s a very exciting day when you can tell your neighborhood ‘jobs are on the way’,” said Alderman Khalif Rainey.

“They have a strong history of hiring people from the surrounding community,” said Barrett. He praised the commitment Talgo has made to Milwaukee to date. “We have worked together through some good times and challenging times.”

Perez thinks the jobs will be here to stay. He said the company is bidding on multiple refurbishment jobs every year and will soon have more experience to give it an edge. “This type of vehicle is spread all out (in) the United States and Canada,” said Perez of the Bombardier Sentinel commuter rail cars behind him. The cars can last over 30 years said Perez, but must be rebuilt after 15 to ensure smooth operation.

The company will use the cavernous former Tower Automotive building to complete the first two contracts, rehabbing up to 121 commuter rail cars and 74 subway cars. Only four to five cars from each order will be on site at a time said Perez, given the need for the transit agencies to continue operating regular service.

Alongside the hiring Talgo will soon be making capital investments in the Milwaukee plant, including constructing a painting booth and sandblasting facility. “The work will be 100 percent performed in this facility,” said Perez of the combined $212 million in rehab contracts the company has won.

The company could soon have a neighbor in Century City. City officials announced last week that Strauss Brands would build a meat processing facility on a portion of the vacant site just north of Talgo’s facility. “What you seeing in real-time is the resurgence of Century City,” said Barrett.

What About Those Wisconsin Trainsets?

Talgo hasn’t forgotten about the trainsets it made for Wisconsin. The company settled with the state in 2015, getting paid for the trains and getting to keep them. But it doesn’t want them on its balance sheet long term. Perez told Urban Milwaukee the company is a manufacturer, it doesn’t own trains.

The company sends employees from Wisconsin to the Amtrak shops in Beech Grove, Indiana once a month to check on the vehicles, perform basic maintenance and move them. Perez said the trainsets can’t sit still for long periods without risk of the bearings and other components “freezing.”

Where could they ultimately end up? Perez said they’re still working to sell them to Washington for the Cascades Service or to the Gulf Coast states which are starting up a new line.

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