(The Omaha World-Herald posted the following story by Virgil Larson on its website on April 10.)
LINCOLN — Idle since December, the Kawasaki plant that builds railroad passenger cars here will begin work next January on two big contracts that will keep the factory humming into 2010.
When work ran out at the rail-car factory, Kawasaki moved the employees into its other Lincoln plant, which manufactures JetSkis, all-terrain vehicles and motorcycles.
Lincoln Mayor Don Weseley greeted the news of workers returning to the rail plant with enthusiasm because the city has seen job losses recently at several other large manufacturers.
“This is big news for Kawasaki and for Lincoln and Nebraska,” Weseley said Wednesday. Kawasaki had the deals pending when it opened the rail-car plant in April 2002, he said, “and now they are coming in.”
The Lincoln plant is assured of the lion’s share of the work on a $1 billion base contract to build 660 cars for New York’s Metropolitan Transit Authority, a Kawasaki Rail Car Co. spokesman said Wednesday.
If New York authorities exercise an option on that contract to buy up to 1,700 cars for its subway system, the deal will be worth between $2 billion and $3 billion, said J.S. Tomar, manager of marketing and business development at the company’s Yonkers, N.Y., office.
Tomar said there’s no question that the options will be exercised.
“Most of the work will be done in Lincoln,” Tomar said, beginning late next year.
Kawasaki also announced a $64 million contract to build 28 double-decker cars for the Boston transit system. Construction of those is to start in January with delivery to begin in December 2004.
These are the plant’s second and third car-building jobs. In a nine-month run that ended in December, the plant built 120 subway cars for New York City.
Seven years of work for Kawasaki’s rail-car plant is particularly welcome in the wake of the cutbacks at other Lincoln manufacturing plants.
“Despite lots of bad news, they’ve been nothing but good news,” Weseley said of Kawasaki.
Goodyear Tire announced last year that it will eliminate the jobs of 480 workers at its Lincoln plant, most of them by the end of this year. The company said it was moving the work to a new plant in Mexico.
Moving work at Square D and Textron Inc.’s Cushman plant to low-wage countries has brought recent job losses at Lincoln manufacturing plants to about 1,000 workers.
Part of Weseley’s enthusiasm about the Kawasaki contracts was the potential ripple effect.
“The great thing about manufacturing is that not only do you have good-paying jobs but you have to have suppliers for the manufacturers,” he said. “You get that multiplier effect.”
It isn’t clear yet whether the new contracts mean more jobs, plant manager Rich Grundman said. The subway car contract completed in December was done with one shift of workers, he said.
The plant, located near the Lincoln airport, employed 180 during that production run.
With the manufacturing of JetSkis, motorcycles and other products, the Lincoln operation, formally Kawasaki Motors Manufacturing Co., employs more than 1,000.
Grundman would not say how much in payroll Kawasaki adds to the Lincoln economy.
The contract with the New York transit authority is a joint venture with a French firm, Alston Transportation. Under the base contract, 260 subway cars will be built in Lincoln with some finishing work, such as installing seats, done in Yonkers, Tomar said. Lincoln will manufacture the undercarriages for another 400 cars to be built by Alston at its plant in Brazil.
Under the larger, 1,700-car option, the Lincoln plant will build all the undercarriages and 420 cars. Alston will build the rest.
Delivery of the cars is to start in 2006 with the last to be shipped in 2010.
Grundman said the job is the largest single contract New York City has ever placed for subway cars.
The joint venture resulted from Alston submitting the lowest bid and Kawasaki scoring highest in the technical qualifications, Tomar said. New York officials suggested a joint venture, he said.
Tomar is optimistic that in future contracts the work won’t be shared with other firms or even with Kawasaki’s own plant in Yonkers.
If the company is successful in winning contracts it is bidding on in Chicago and California, he said, “everything will be done in Lincoln.”