Ill. state money to help fund railcar plant in Rochelle

Chicago's Metra commuter rail service awarded Nippon Sharyo a contract to build its next generation of railcars. Metra will buy 160 over the next five years.

Nippon Sharyo U.S.A. will receive $12 million in the form of a state business investment package to supplement $35 million in private investment

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The following are excerpts from Nippon Sharyo’s news releases.  See:  http://www.nipponsharyousa.com

cars for this [Metra] contract will be similar to the 26 gallery-type electric multiple units (EMUs) that were delivered in 2005 and 2006. The cars will accommodate up to 140 passengers each, and will replace existing cars that have been in service at Metra since the 1970s. Half of the new cars will be equipped with bathrooms.

The contract price is $560 million. Delivery is scheduled to start at the end of 2012, and finish by the middle of 2015.

The new strategy is focusing on two elements, one to increase competiveness in the expanding passenger railcar market in the United States, and the other to respond to the increased desires for “localization” of railcar assembly.

The new production facility is also expected to reduce total production costs by reducing transportation costs and by mitigating the risks of exchange rate fluctuations. Having a new production facility in the US also offers greater flexibility for production planning and delivery schedules while increasing the “local content” for Illinois and providing job opportunities in the Region.

The new facility will also enhance Nippon Sharyo’s consistent “on-time, on-budget” contract performance accomplishment on every United States contract over the past 30 years.

Nippon Sharyo has delivered an aggregate of 886 passenger railcars to the US market since early 80’s, and has complied with “Buy America” and local content requirements without exception by utilizing US suppliers and conducting final assembly in the US.

Nippon Sharyo decided to enhance its presence in the United States by building its own new production facility in Rochelle, Illinois. This is in response to the Obama Administration's initiative in support of passenger rail investments to create more jobs in the United States.