Amid much pomp and circumstance, Mayor Rahm Emanuel, the Chicago Transit Authority, a bevy of politicians, and representatives of CRRC Sifang broke ground yesterday on a new factory in the Hegewisch neighborhood that will be used to produce CTA subway cars.
Much of the hot air being blown by Hizzonor and other local pols was about how this is the first time since 1964 that rail cars for Chicago’s transit system are being made in Chicago. The south side of Chicago, as you know, was once famous for building rail cars. Its legacy is an abandoned factory complex and a struggling neighborhood bearing the manufacturer’s name: Pullman.
We’re huge fans of new manufacturing and new factories in Chicago, and this its nice to see The City That Works working with its hands as often as possible. But what is CRRC Sifang? It’s the American name for CRRC Corporation Limited, which is a company owned by the Chinese government.
In a nutshell: The CTA is giving the Chinese government (via CRRC) $632 million for 400 new subway cars (that’s $1,580,000 per car). The Chinese government’s company is spending $40 million building a new factory in Chicago to produce those subway cars. The advantage to Chicago is that the factory will employ local American workers, though Chinese government companies have, in other countries, brought in Chinese labor to run their foreign factories. Either way, the new subway cars get shiny “Made in the U.S.A.” badges on them. So +1 for mom, apple pie, and the no-longer-endangered bald eagle.
The upside for the Chinese gub’mint is that it saves a metric assload of money shipping rail cars in from a manufacturing facility in Buffalo, or Montreal, or wherever else would give it a deal, while making money off the CTA contract. Because even though it’s government-owned, CRRC is in the business of making money. So +1 for Beijing, smog masks, and risking arrest for typing “Tiananmen Square” into your computer.
But the benefits of the Hegewish factory go beyond the movements of little bits of green paper around the world. It has to do with people, and their movements around the world.
The same way a huge mound of lo-mein leaves you hungry for more lo-mein an hour later, the notion of a Chinese factory in Chicago makes Chinese investors hungry for more Chicago. It leads to better and closer business ties for private firms on both sides of the Pacific. Think more Chinese tourists coming to Chicago. More Caterpillar bulldozers headed to Shanghai. More Chinese investment in Chicago real estate. More bKL-designed skyscrapers in Beijing. And along the way, tens of thousands of people are kept employed in ancillary industries from translation to photocopiers to pizza delivery. If you’re into chaos theory, it’s the macroeconomics version of the butterfly effect. If you’re into butterflies, that’s called lepidoptery, and is entirely unrelated to this discussion.
The bottom line:
- Giving tax dollars to the Chinese government: Not great, but not any worse than you plonking down $200 at Target on plastic things made in China anyway.
- Building trains in Chicago and employing Chicagoland people: Always a very good thing.
Press release follows:
Mayor Emanuel, CTA, CRRC Sifang America Break Ground on New CTA Railcar Manufacturing Facility in Chicago
New Final Assembly Plant for CTA’s Next-Generation 7000-Series Rail Cars will be Built by 2018 on the Southeast Side, Creating Hundreds of Local Jobs
Mayor Rahm Emanuel today joined Chicago Transit Authority President Dorval R. Carter, Jr., CRRC Sifang America, CenterPoint Properties, Jobs to Move America (JMA) and the Chicago Federation of Labor to break ground on a new $100 million facility on the Southeast Side of Chicago that will assemble the CTA’s newest rail cars, the 7000-series, and create more than 300 skilled factory and new construction jobs.
The new CRRC Sifang America facility will mark the first time in more than 50 years that CTA rail cars have been produced in Chicago – the latest example of how investment in the CTA promotes economic development and creates employment opportunities for Chicagoans.
“This new facility represents a major investment in Chicago that will bring economic opportunities to the Southeast Side, while creating good-paying jobs for hundreds of workers,” Mayor Emanuel said. “The rail cars that emerge from this facility will be the latest step we’ve taken to invest in world-class transportation, and to create a 21st Century transit system.”
As part of CTA’s ongoing modernization efforts, the agency last year awarded a manufacturing contract to CRRC’s U.S. subsidiary, CRRC Sifang America, to build up to 846 new rail cars. The CTA’s first order of 400 rail cars will be assembled at the new facility and will replace CTA’s oldest railcars, which are more than 30 years old.
Once these new vehicles are in service, CTA will have one of the youngest fleets of any U.S. transit agency.
“CRRC Sifang America is grateful for the opportunity to work with the Chicago Transit Authority to produce the next generation of railcars in Chicago, for Chicago,” said CRRC Corporation Vice President Sun Yongcai, who also serves as a member of the CRRC standing committee. “We are committed to producing top-of-the- line railcars to enhance CTA rider experience, while also creating new jobs at our assembly facility in the city. We are confident CRRC Sifang America’s partnerships in Chicago will make this project a success for us and for the city.”
The 7000-series rail cars, which will be the first CTA rail cars produced in Chicago since 1964, include such features as AC-power propulsion for smooth, quiet rides; additional security cameras both inside and outside the vehicle; and GPS-triggered announcements and automatic passenger counting for improved service planning.
“We are committed to providing our customers with more reliable and comfortable transportation for decades to come,” CTA President Dorval R. Carter, Jr. said. “We are continuing our investments in new buses and trains that will improve commutes, lower maintenance costs and provide a more pleasant customer experience.”
The 380,994-square-foot facility, paid for entirely by CRRC, will employ at least 169 factory and warehouse workers, as well as support approximately 200 construction jobs to build the facility. Approximately $7 million will be spent on training for their Chicago final assembly facility workforce.
“It has been more than 30 years since the last rail car rolled off the Pullman assembly line on the South Side and over 50 years since CTA’s rail cars were produced in Chicago. Today’s groundbreaking represents a new beginning for Chicago manufacturing – one that will help attract much-needed business and development to this area,” U.S. Senator Dick Durbin said. “I will continue to work to ensure that the CTA has the federal funding it needs, and I thank Mayor Emanuel and the Chicago Transit Authority for their hard work and commitment to modernizing our public transportation system.”
“Projects like this that upgrade and improve our public transit system, create good-paying jobs and invest in our communities are exactly the sort of projects we should be encouraging,” U.S. Senator Tammy Duckworth said. “Improving our city’s infrastructure and bringing rail car manufacturing jobs back to the Southside of Chicago for the first time in over three decades is a significant achievement that will open up new economic opportunities for local businesses and working families.”
“Once again, rail cars will be manufactured on the South Side. This continues our unique legacy that dates back 150 years to George Pullman,” Congresswoman Robin Kelly said. “I’m glad that this state-of-the-art facility will be creating jobs in the Second District community, while driving economic growth and serving the needs of America’s transit systems.”
CRRC Sifang America is committed to hiring from communities that make up the City of Chicago and surrounding areas and is working with unions such as the Chicago Federation of Labor, IBEW and SMART, to secure a union workforce from within these communities.
Working with CRRC Sifang America and the Unions in this endeavor are JMA, Calumet Area Industrial Commission (CAIC) and City Colleges of Chicago.
“Jobs to Move America congratulates CRRC on its commitment to invest in high-quality U.S. jobs and a permanent Chicago manufacturing facility. This initiative has been four years in the making and would not have been possible without the partnership of the CFL, the City of Chicago and the CTA. The community benefits agreement marks the first comprehensive jobs program of its kind that focuses on economic development in communities historically excluded from the manufacturing sector. Mayor Emanuel and Chicago are setting a precedent for the nation, lifting up industry standards and creating a model for how communities and businesses can work together in the future,” said Linda Nguyen, Deputy Director of JMA.
“Today I’m proud to say that 36 years after the last rail car rolled out of the Pullman factory, rail cars will once again be union made on Chicago’s Southside, thanks to a tremendous effort between Mayor Emanuel, the CTA, the CFL and the Jobs to Move America coalition. For many years, we have watched U.S. manufacturing jobs move overseas. The size of this bid provided Chicago an opportunity to leverage a robust manufacturing jobs program that will strengthen the middle class, stimulate increased investment in new domestic manufacturing facilities, and create opportunities for low income communities,” Jorge Ramirez, President of the Chicago Federation of Labor.
The new facility, expected to be complete in spring 2018, will assemble the CTA’s base order of 400 railcars for a total of $632 million or $1.58 million per car, with future options for an additional 446 railcars. These 7000-series vehicles are the first railcars purchased by CTA in more than a decade since 2006, when the 5000-series contract was awarded to Bombardier. The first rail car prototypes are expected to be completed in 2019.
Under Mayor Emanuel’s leadership, since 2011 the CTA has completed, begun or announced more than $8 billion in projects to modernize and upgrade the bus and rail system.