(The following story by Jim Martin appeared on the Times News website on October 22.)
ERIE, Pa. — GE Transportation has teamed with an Indian company to chase what could be the largest locomotive order in company history.
Indian Railways had already named GE to a short list of companies eligible to compete for an order of 1,000 locomotives.
But now, GE has forged a local connection through an alliance with India’s Bharat Heavy Electricals, or BHEL.
“I think the partnership enhances our chances of winning the tender,” said Stephan Koller, spokesman for the Erie-based division of General Electric Co.
“There is always a local component to these tenders,” he said. “When you go into markets like Kazakhstan, India and China, it is crucial to establish contact with local companies.”
Although the 6,000-horsepower locomotives would be based on GE’s Evolution platform, it’s uncertain who would build them if GE and BHEL do win the order.
“I think that is a little too early to know,” Koller said. “We are working through the details. We have signed a memorandum of understanding that we both want to pursue this Indian Railways tender.”
Engineering for the locomotives has already been done at the John F. Welch Technology Center in Bangalore, India.
All GE locomotives for the North American market have been built in Erie with engines built in Grove City.
There is a growing precedent, however, for foreign customers to specify that much of the work be done inside the country where the locomotives will be used.
In 2006, when Kazakhstan National Railway ordered 310 locomotives for $650 million, the contract specified that only the first 10 would be built in Erie. The remainder were to be built at a state-owned plant in Kazakhstan, using engines built in Grove City and other key components, including cooling systems and traction motors, built in Erie.
A subsequent order for 300 locomotives from the Chinese Ministry of Rail called for just two fully built locomotives. The rest were to be shipped as kits, with the Chinese providing more of their own parts as time passed.
In the past, unions representing GE Transportation employees have pushed to have all parts and locomotives built in the United States.
Frank Fusco, president of Local 506 of the United Electrical, Radio & Machine Workers of America, said Tuesday that he was unaware the company is pursuing a contract with Indian Railways.
GE Transportation, which expects to build between 800 and 900 locomotives this year, has a backlog of orders for another 1,900 locomotives.
But with the U.S rail industry no longer in a buying mood, leaders of GE Transportation are pursuing business wherever they can find it.
“We are in a slowing U.S. economy,” Koller said. “We need to aggressively pursue growth opportunities worldwide. Emerging markets like India are an important opportunity.”
Lorenzo Simonelli, who took over during summer as chief executive of GE Transportation, said in a statement, “We are excited about the prospect of expanding our relationship with Indian Railways and to partner with BHEL.”
Although Simonelli had overseen the final agreement with BHEL, the alliance between the companies is not a new idea.
“This has been in the works for a long time,” Koller said.
GE’s partner in this venture is India’s largest engineering and manufacturing enterprise, with more than 40,000 employees, including 10,000 engineers.