LA Metro's deal with Italian rail car manufacturer falls apart

L.A. County’s Metropolitan Transportation Authority has thrown AnsaldoBreda from the train. The Italian company had agreed to build a factory in Los Angeles and manufacture 100 more light rail cars for the regional transit system. But negotiations derailed over the weekend, and now the $300 million deal is off.

The deal looked about done almost a month ago when Los Angeles Mayor Antonio Villaraigosa gathered labor leaders who’d lobbied for it, and city and transportation officials who'd taken a while to get on board for a triumphant announcement at Union Station.

"When you have a great opportunity, you might as well take advantage of it," the mayor said on a Gold Line platform. "I’d like to officially welcome AnsaldoBreda to La Ciudad de Los Angeles. You’re gonna love it here."

The crowd applauded then. The factory AnsaldoBreda had pledged to build was supposed to create a thousand construction jobs, then more than 600 permanent jobs – and incubate a new green transportation industry in the Southland.

But contract talks with the company some call “Breda” broke down in their final stages. Richard Katz, Mayor Villaraigosa’s appointee to the Metropolitan Transportation Authority, said Villaraigosa put a lot of energy into making the deal happen.

"It was a great opportunity for Los Angeles," said Katz, "but one of the cornerstones from day one because of the trouble we had had with Breda before was always the financial guarantees and the financial incentives for them to deliver on time."

AnsaldoBreda is running about 3 years late on a contract to provide Metro with 50 new rail cars. The cars it’s already delivered are thousands of pounds overweight. That’s prompted people like L.A. County Supervisor Mike Antonovich to criticize the new deal with the company from the beginning.

In a statement, Antonovich described the derailment of the deal as a victory for Los Angeles County taxpayers. His transportation deputy, Michael Cano, says now Metro can solicit proposals from major companies like Germany-based Siemens, Canada’s Bombardier, and Japan’s Kinki Sharyo.

"We need reliability from our next rail car manufacturer," he told KPCC’s Patt Morrison, "to make sure we’re not dealing with penalties and delays – we’re dealing with results. "

Cano said that with all the voter-approved Measure R projects on track, Metro needs twice as many new rail cars as it expected AnsaldoBreda to build.