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8608FW: [Tr2000] Bombardier puts the brakes on N.A. high-speed train plans

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  • Andrew Dawson
    Jun 3, 2005
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      The HSR situation here in North America. Till later, Andrew Dawson

      >Bombardier puts the brakes on N.A. high-speed train plans
      >Unit's president sees little appetite for it here; no projects are
      >under discussion
      >
      >
      >By BERTRAND MAROTTE
      >Globe and Mail
      >Friday, June 3, 2005 Page B1
      >
      >
      >
      >MONTREAL -- Bombardier Inc. has put on ice its once-ambitious
      >plans for high-speed train travel in North America.
      >
      >Andr� Navarri, president of Bombardier Transportation, said in
      >an interview yesterday that there is little appetite for high-speed
      >rail in North America, unlike in Europe and parts of Asia.
      >
      >"For the time being, there is no project which is close to being
      >promoted," he said. Asked about the potential for its once highly
      >touted JetTrain technology in North America, he replied: "As there
      >is no high-speed corridor for the time being, there is no
      >JetTrain."
      >
      >Bombardier Transportation spokeswoman H�l�ne Gagnon said
      >later that Bombardier is no longer in discussions with any
      >government bodies anywhere in North America regarding the
      >funding of high-speed train travel.
      >
      >"There is no project of any kind in Canada or the United States
      >that is the subject of discussions," she said.
      >
      >Bombardier Transportation is the rail unit of the global plane and
      >train maker.
      >
      >Montreal-based Bombardier had for the past several years been
      >running a major campaign to spark interest in its high-speed
      >train technology in the United States and Canada.
      >
      >A high-profile attempt to win approval in Florida for its
      >240-kilometre-an-hour JetTrain failed last November after
      >taxpayers voted it down.
      >
      >And Bombardier, along with French partner Alstom SA, has been
      >plagued by technical and other problems with their Acela
      >Express train operated by Amtrak in the Washington-New
      >York-Boston corridor, the only existing high-speed train in North
      >America.
      >
      >"Is there a market in North America for a very high-speed train?
      >It's a difficult issue," Mr. Navarri said at corporate head office.
      >
      >While high-speed trains have staked out a place in the popular,
      >well-established rail system of Europe, "it's a little more difficult
      >to find the right [rail] corridors in North America," he said.
      >
      >"We are still prepared to discuss the [high-speed] potential in
      >North America, but in North America we will mainly focus on the
      >mass transit market," said Mr. Navarri, a former senior executive
      >at Alstom who was hired last year by Bombardier to lead a
      >sweeping restructuring at Bombardier Transportation.
      >
      >It is difficult to get all the players -- especially governments -- to
      >agree on how best to develop high-speed train travel in North
      >America, he added.
      >
      >"Up to now, it has not been possible to find this agreement, with
      >the exception of Acela."
      >
      >In Canada, Bombardier had high hopes for its JetTrain,
      >particularly in the Quebec City-Windsor, Ont., corridor, and had
      >been lobbying the federal government for financial assistance to
      >upgrade the corridor at a cost of up to $3-billion.
      >
      >"Quebec City-Windsor for the time being is on ice, for financial
      >reasons," Ms. Gagnon said.
      >
      >Other city-to-city links that Bombardier had identified included
      >Calgary-Edmonton, Chicago-St. Louis, Los Angeles-San
      >Francisco and Orlando-Miami.
      >
      >Mr. Navarri said he is not disheartened by an embarrassing
      >series of technical glitches, delivery delays and contractual
      >disputes related to the Acela Express.
      >
      >He said he is confident that the latest snafu -- the Acela was
      >yanked out of service in April after cracks on brake components
      >were discovered -- will be amicably settled and won't degenerate
      >into a legal brawl, as happened four years ago over costly
      >design changes.
      >
      >Meanwhile, Mr. Navarri said he expects strong growth from
      >Eastern European countries as they join the European Union
      >and become eligible for funding to upgrade their aging rail
      >equipment.
      >
      >Bombardier Transportation -- the world's largest manufacturer of
      >rail transportation equipment -- also sees growth from the
      >planned standardization of Europe's patchwork rail signalling
      >system, as well as from the boosting of its services unit to about
      >30 per cent of revenue from 17 per cent today, he said.
      >
      >Outside Europe, China represents a huge potential market for
      >Bombardier, Mr. Navarri said.
      >
      >He also said Bombardier Transportation's restructuring plan --
      >announced last year -- is on track and even ahead of schedule,
      >with a work force reduction of about 15 per cent, to about 30,000
      >from more than 35,000 and the closing of seven facilities in
      >Europe by the end of this year.
      >
      >"All these plans are starting to show good results, especially in
      >terms of profitability," and the rail unit should reach its target of
      >6-per-cent profit margins in the medium term as expected.
      >
      >Six per cent is not the ultimate goal, he added.
      >
      >"After that, we want to go even further."
      >
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