June 14, 2019 / 6:00 PM / 4 months ago

CORRECTED-UPDATE 1-Bombardier opening new California rail-car assembly site

(Corrects fourth paragraph to make clear that Bombardier is not renting space from Hitachi)

By Allison Lampert

June 14 (Reuters) - Canada’s Bombardier is opening a new facility in California that will assemble rail cars for San Francisco’s rapid transit system by year’s end, and potentially serve other West Coast rail projects.

The plane and train maker said in a news release that it will use the site for a 775-car contract with the San Francisco Bay Area Rapid Transit District (BART).

Rail car work for the San Francisco contract will be transferred to the new site in Pittsburg, California from Bombardier’s existing plant in upstate New York, the company said.

Bombardier began renting space at the site this month, and it will be operational by the end of the year, a Bombardier spokesman said. The company is eying other California contracts as its rail division pursues high-single digit growth in North America.

Bombardier said the new facility will help it meet U.S. content requirements. Railmakers awarded federally funded contracts for rolling stock in the United States will be required to complete 70% of the order with American content next year, compared with 60% in 2016, when the requirements were announced by the U.S. Federal Transit Administration (FTA).

Bombardier declined to disclose the value of the new site.

Bombardier’s rail division, its largest unit, has faced recent headwinds due to delivery delays and production problems at a handful of long-term projects, forcing the company to cut its first-quarter and full-year revenue targets for the division.

But Bombardier sees opportunities in the United States, rail division president Danny Di Perna told Reuters in May, and the company is eying a series of Los Angeles transit projects to coincide with the 2028 Summer Olympic and Paralympic Games.

“The Pittsburg site will also enable Bombardier to pursue additional business opportunities in the growing rail transit equipment market on the West Coast and to serve this market with increased effectiveness,” said Elliot Sander, president of Bombardier Transportation’s Americas division, in the statement. (Reporting By Allison Lampert; Editing by Cynthia Osterman)

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