By anyone's standard, Raymond Mancardi's vision is fast becoming reality. ALSTOM Transportation's Hornell, N.Y., complex has already become a world-class assembly and manufacturing plant. Like the Phoenix, the mythological creature that arose from ashes to be renewed, so too has the rail car industry been reborn in Hornell.
With headquarters in Paris, parent company ALSTOM is an industrial giant, recognized around the world as a leading supplier of systems, components and services for diversified lines of business that include energy transmission and distribution, transport, industry, marine and local contracting.
As part of its global strategy, ALSTOM established its U.S.-based subsidiary, ALSTOM Transportation, in 1995 with the intent of securing new business with emerging passenger rail and rail freight industries in North America.
The Acela: Full-Speed Ahead
The TGV, which traverses France at 150 mph (241 kmph), and the Eurostar, which travels from London to Paris and Brussels through the Channel Tunnel, are proven high-speed passenger rail systems. Both systems were designed and produced by ALSTOM.
In a consortium with Bombardier of Canada, ALSTOM Transportation is now developing the "Acela," a 150-mph high-speed passenger train system specifically designed for Amtrak's Northeast Corridor -- Washington to New York to Boston. Named to convey both "acceleration and excellence," the Acela will be the first major high-speed rail system in the United States.
Amtrak pins high hopes on the success of its inaugural fleet of 20 new luxurious Acela trainsets. There's good reason for so much optimism and excitement -- high-speed passenger trains are seen by many to be a time-saving and economical option for metropolitan commuters faced with crowded airline terminals and congested highways.
The excellent manufacturing track records established by both ALSTOM and Bombardier also help support such enthusiasm. "We know we have a product here that will absolutely knock the socks off the competition," said Amtrak President George Warrington at the train's unveiling.
The high-speed propulsion units for the Acela are produced in Hornell. But the Acela is just one little part of the story of ALSTOM Transportation -- and of the city of Hornell.
The Hornell Car Shop
Formerly known as GEC Alsthom, ALSTOM's roots lie deep in the dawn of the railway age in Europe. With nearly 100 years of experience, it has emerged as the worldwide leader in rail transport technologies. When ALSTOM decided to establish its U.S. presence, it spurred some intensive "house-hunting" on ALSTOM's part.
ALSTOM's biggest challenge was locating the right facility. Siting factors included location, infrastructure, transportation access, utilities, support services, and perhaps the most important component to a manufacturing facility, a skilled labor force.
Meanwhile, the Hornell Industrial Development Agency (IDA) was the real estate agent for its vacant Hornell car shop. (Hornell is located in upstate New York near the Pennsylvania border, between Buffalo and Binghamton.)
For years, Hornell had served as an important manufacturing center for the railroad industry, with activities ranging from rail car assembly to production of propulsion systems. Through cyclical periods of "boom or bust," the original Hornell "car shop" changed hands several times. In 1972, then-owner Conrail sold the facility to the Hornell IDA.
The Hornell IDA bought the original 90,000-sq.-ft. (8,361-sq.-m.) car shop from Conrail for US$450,000, and then invested another $4 million in the car shop for facility and infrastructure upgrades. Seeing the long-term potential for a major railroad manufacturing center, the IDA soon expanded operations to other locations within a 2-mile (3.2-km.) radius of the car shop. First, the IDA acquired the old, 130,000-sq.-ft. (12,077-sq.-m.) SKF building (for the apparatus shop) -- then it added another new 30,000-sq.-ft. (2,787-sq.-m.) facility (for the motor shop). Soon thereafter, Morrison-Knudsen (M-K) became the IDA's first tenant of its Hornell operations.
M-K successfully operated the Hornell facilities until 1995, when financial troubles forced M-K to file for Chapter 11 bankruptcy. At that time, M-K employed over 1,000 workers in Hornell. A bonding agency then formed Amerail, a temporary corporation assigned the task of completing M-K's existing contracts and work orders. As this work phased to completion in 1997, the Hornell IDA scrambled to find a new tenant.
ALSTOM Comes to Hornell
At that point, ALSTOM was the largest manufacturer of transit cars in the world, but it had no U.S. production facilities. That was soon to change. The company sensed an evolution in rail transportation in North America. Major recent mergers in the industry and increased, renewed interest in passenger rail systems seem to confirm this strategy.
With the Hornell facilities so ideally suited to railroad equipment manufacturing, the IDA's strategy was simple: They would aggressively seek companies engaged in this businesses sector. Thus, the IDA quickly focused its attention upon railroad manufacturers, with Bombardier, Kawasaki, Siemens and ALSTOM emerging as primary candidates.
ALSTOM quickly recognized that the Hornell site had many advantages as a well-situated North American manufacturing center. After conducting exhaustive research and evaluation, ALSTOM successfully negotiated a lease agreement with the Hornell IDA, including the three main production shops (car, apparatus and motor). Under ALSTOM Transportation, the Hornell facilities resumed operations in mid-1997.
Once on site, ALSTOM immediately set about laying plans for renovation and expansion of the Hornell facilities. Its presence greatly bolstered a sagging local economy.
To facilitate such major expansion and renovation, the Hornell IDA serves as lead agent in state-required environmental reviews. In turn, the IDA appointed ALSTOM to construct and equip any new building on the site. As site owner, the IDA allows ALSTOM to schedule payments in lieu-of-taxes, and provides ALSTOM with a mortgage tax exemption and a sales tax abatement for goods purchased during the construction period.
A Valued Business Partner
In addition to IDA incentives, ALSTOM also found another valued business partner in the community -- New York State Electric & Gas Corp. (NYSEG). NYSEG delivers, markets and supplies electricity and natural gas to more than 1 million customers across more than 40 percent of upstate New York.
ALSTOM is a major customer of NYSEG's in Hornell. Once ALSTOM decided to expand operations there, NYSEG representatives offered the company a package of services and technical support, including competitive energy prices.
In fact, NYSEG helped fund an operational audit to improve efficiency for ALSTOM. "NYSEG's really been a valued business partner for us. NYSEG put its money where its mouth is -- they've really helped us out -- particularly when we were just getting started here in Hornell," says L. J. Mahon, chief operating officer for the Hornell operations.
World-Class Manufacturing In Hornell
ALSTOM jumped out of the starting gate. With an initial work force of fewer than 100, ALSTOM immediately began securing new contracts, adding headcount and re-investing in facilities. Today, just two short years after taking over the Hornell facilities, ALSTOM employs more than 800 workers, and has invested more than $25 million into its operations.
"We're really committed to developing Hornell and creating new jobs in New York state," Raymond Mancardi says. "It's my ambition to develop a large [amount of] activity in Hornell. Our mission is that Hornell be known all over the United States as a great center of expertise for railroad development and manufacturing. Our company has made great strides in becoming a world-class manufacturing operation. Today, customers are recognizing that we fulfill all our commitments, that we deliver product on time -- or ahead of schedule!"
-- by Steve Jeremko
"Our mission is that Hornell be known all over the United States as a great center of expertise for railroad development and manufacturing."