04.23.15

SCHUMER URGES FEDS TO REVERSE COURSE ON TRANSIT PROPOSAL THAT COULD PUT HUNDREDS OF LOCAL JOBS AT RISK & CRIPPLE ROCHESTER FINGER LAKES AREA BUS AND TRAIN MANUFACTURERS

Proposed Federal Local Hiring Pilot Program and Rule Would Allow Transit Agencies Across The Country Receiving Fed Funds to Require All Buses and Trains Be Produced Locally, Meaning All Manufacturers & Workers Must Be Located in That Specific City to Bid on a Contract – Schumer Says This Rule Could Have Disastrous, Unintended Consequences For Jobs in Rochester Finger Lakes Area 

Under New Rule, Companies Like Alstom in Rochester And Coach & Equipment in Penn Yan – Which Produce Buses and Trains for Transit Agencies Nationwide – Would Face Choice of Uprooting Business to New Location For Each Contract or Losing Out on Business-Sustaining Work; Schumer Urges Fed Dept. of Transportation to Reverse Course 

Schumer: New Rule Could Make it Impossible for Bus and Train Manufacturers in Rochester Area to Survive & Cost Upstate NY Hundreds of Good-Paying Manufacturing Jobs

 

U.S. Senator Charles E. Schumer today urged the U.S. Department of Transportation (DOT) to reverse course on a proposed rule and clarify a pilot program that has the potential to devastate Rochester Finger Lakes-based manufacturers of buses and trains and put hundreds of local jobs at risk. The proposed rule and pilot program, which was recently released by USDOT would allow recipients of federal funding from USDOT to require local hiring on any procurement or contract – but the proposal is so broad that it also would include the procurement of rolling stock. Rolling stock consists of vehicles such as buses, vans, cars, railcars, locomotives, trolley cars, and ferryboats that are produced to carry passengers in major transit systems in cities across the country. Schumer explained that companies like Alstom in Rochester and Coach & Equipment in Penn Yan – two major sources of local employment – produce this rolling stock. However, Schumer said, this new rule under the “Local Hiring Pilot Program” could prove disastrous for rolling stock producers because transit agencies nationwide, such as the MTA, the Chicago Transit Authority and others, that receive federal funding would be allowed to prevent companies from bidding on contracts unless they relocated to that specific city. Schumer said that the unintended consequences of this rule could cripple the rolling stock producers and put hundreds of jobs at risk in Upstate New York.

Schumer explained that, under the new rule, companies like Alstom in Rochester and Coach & Equipment in Penn Yan would be at a harsh disadvantage because it would allow their customers, which are primarily major cities, to require that they be located in the specific city in which they are bidding on a contract. Schumer said that, in order to even be able to compete to produce rolling stock for a new transit agency project, these companies would have to either uproot their entire operation to a new location or forego new business that could potentially make it impossible for them to survive. That is why Schumer is pushing the federal DOT to clarify the rule and make it clear that it does not apply to rolling stock. Without such a clarification this rule would create an unworkable standard as well as pose a significant threat to both the Upstate New York rolling stock manufacturers and the jobs of hundreds of North Country residents.

“The U.S. Department of Transportation’s proposed rule and pilot program would jeopardize hundreds of good-paying jobs across the Rochester Finger Lakes  region and threaten to put our rolling stock manufacturers out of business. Rather than serving as an incentive to hire locally, the geographic-based hiring provision could force great companies like Alstom in Rochester, Coach & Equipment in Penn Yan, and producers across Upstate New York to relocate and hire a new workforce every time they compete for a contract in a new city,” said Schumer. “Rolling stock production is a capital- and labor-intensive industry, so requiring such a heavy lift could make it hard for businesses – and particularly those in rural and suburban areas – to survive. That’s why I’m calling on the feds clarify this rule, because we should be helping create good-paying manufacturing jobs rather than more bureaucratic red tape.”

Jerome Wallut, President of Alstom Transport North America said, “Alstom would like to recognize and thank Senator Schumer for his leadership on this very important issue.  The Southern Tier Rail Technology Cluster designs and manufactures the world's most reliable rolling stock, and Alstom’s Rochester Signaling Business continues to provide cutting edge technology to our customers.  The Senator’s support today will allow our highly skilled union work force in Hornell and Rochester, New York to continue this very important work they do for communities served by public transit and railroads across America.”

Scott Reston, President of Coach & Equipment said, “From our manufacturing center in Penn Yan, NY our over 100 employee workforce produces paratransit buses for public transit systems in New York City, Maryland, Delaware, Pennsylvania, and many other areas across the country.   We appreciate Senator Schumer’s support to ensure this new proposed regulation will not hurt our ability to continue to manufacture and grow jobs here in Penn Yan.”

Schumer said that rolling stock producers across Upstate New York—such as Alstom in Rochester and Coach & Equipment in Penn Yan—employ hundreds of workers. Schumer explained that the DOT proposed Local Hiring Pilot Program could jeopardize these jobs. That is because companies like Alstom and Coach & Equipment, which rely on contracts from transit agencies that are federally funded across the country, could not afford to relocate to a new location for each contract. Schumer explained that if a transit agency utilized the local hiring provision, manufacturers currently located in rural and suburban communities would find it nearly impossible to survive for this reason. If local hiring were to be enforced on the procurement of rolling stock, it could have the practical impact of forcing companies to build entirely new production facilities in communities every time there was a major job available in that region.

Schumer said this rule could require a massive capital investment on the part of the rolling stock producers and, as a result, significantly increase the cost to agencies and the federal government of procuring rolling stock. Schumer said the DOT should reverse course on this provision because it has unintended consequences that would lead to a counterproductive outcome. Schumer is urging DOT to revise existing proposals to ensure that rolling stock producers are not adversely impacted by this geographic-hiring provision.

A copy of Senator Schumer’s letter to the DOT appears below:

Dear Secretary Foxx,

I write to express serious concerns about the practical implications of the Local Hiring Pilot Program and the Notice of Proposed Rule Making on Geographic-Based Hiring Preferences in Administering Federal Awards (RIN 2105-AE38). While I understand the United States Department of Transportation’s (USDOT) goal in establishing the pilot program and issuing the proposed rule, the unintended potential impact of this action on certain industries and programs – especially on the manufacturers of rolling stock – could be disastrous. I urge you to adjust both the pilot program and the proposed rule to ensure that certain unintended consequences are avoided.

For example, in New York this effort could cripple the rolling stock producers and their suppliers and put hundreds of jobs at risk. There are countless New Yorkers employed at companies that rely on contracts from transit agencies that are federally funded. Companies like Alstom, Bombardier, CAF USA, Kawasaki, Nova Bus, Coach & Equipment, and Prevost are dependent on work from transit agencies throughout the country that utilize federal funding. These are capital equipment and labor-intensive operations that are rooted in the areas in which they are located. Allowing transit agencies to require local hiring would both create an unworkable standard and pose a significant threat to these manufacturers, as well as jobs at hundreds of their suppliers. If a transit agency were to utilize this local hiring provision, which USDOT is attempting to allow them to do, in rolling stock procurement, it would make it virtually impossible for manufacturers currently located in rural and suburban communities to survive. In addition, the proposal would trigger short-term job creation in communities with open contracts followed immediately by plant closures and lay-offs once the projects are completed.

Furthermore, this proposal could also significantly impact the cost of procuring rolling stock for transit agencies throughout the country. If local hiring were to be enforced on a procurement of rolling stock it could have the practical impact of forcing companies to build entirely new production facilities in communities every time there was a major job available in that region. This would require a massive capital investment on the part of the rolling stock producers and as a result significantly increase the cost to agencies and the federal government of procuring rolling stock. Clearly, this is not the intended impact of this program and this new rule, and it is vital that it be promptly altered to avoid this counterproductive outcome.

Given these implications I urge you to reverse course and alter your existing proposals to ensure that rolling stock producers are not adversely impacted by this program. Making it clear that local hiring preferences will not be allowed to be used in the procurement of rolling stock and other similar areas of the transportation industry is critical to ensuring the continued success of existing manufacturers and the best value for transit customers.

I appreciate your consideration of this request, should you need any additional information please do not hesitate to contact my office.

Sincerely,

Charles E. Schumer

United States Senator

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