Siemens + Bombardier; Impact

Although the parties have been "talking for months", I only learned of this development today:

https://www.google.com/amp/s/global.han ... 786874/amp" onclick="window.open(this.href);return false;

Fair Use:

Insiders say Siemens is considering a merger of its railway business with Canadian rival Bombardier – a move that could cost more jobs in an already losing industry.

According to WirtschaftsWoche, a sister publication of Handelsblatt, the two businesses have been in discussions for months. The goal is to form a new, joint company combining the railway car, locomotives and control technology as well as subway and streetcar divisions. Siemens has already adopted a similar strategy with Gamesa, the Spanish wind energy equipment manufacturer.

The move could prove to be sensible. With joint revenues of nearly €15 billion ($16.8 billion), the companies could become a stronger counterweight to the Chinese state-run company CRRC, which had annual sales of more than €32 billion after currency conversion and is already successfully marketing its railway technology in developing countries across Southeast Asia and the Middle East.

Well, it looks like there could be a "hook up" between the best equipment vendor since Budd and EMD, with the worst save CAF.

Bombardier the worst? I beg to differ, aside from the AX and a few recent team orders BBD has been a largely reliable manufacturer. As noted in the V-II thread, Amtrak is a picky customer, and the fact that Bombardier didn't handle them well is unrelated to their later successes in the North American and world (Adtranz, MBB, etc.) markets.

Not that I think a BBD + Siemens merger is good for the market, but perhaps it'll open up room for more little guys domestically.

mtuandrew wrote:Bombardier the worst? I beg to differ, aside from the AX and a few recent team orders BBD has been a largely reliable manufacturer. As noted in the V-II thread, Amtrak is a picky customer, and the fact that Bombardier didn't handle them well is unrelated to their later successes in the North American and world (Adtranz, MBB, etc.) markets.

Their NYC subway cars are ok, but Kawasaki and Alstom build 'em better. The LIRR stuff is reliable, but loud, obscenely overweight, and rides like a dog poop. The much-flaunted NJT Multilevels should be nicknamed 'squeakliners' from the truck noises they make (never mind the frequent brake inspections NJT has to do...). The Comet cars are...well, they're Comet cars, what do you expect?

Sure the '46 was a good motor - Adtranz designed it. The first documentation even said Adtranz on it. The '45 works, somewhat, but whatever.

I've not been on the coffin car, so no opinion there but they sure do flip and crash easily enough.

Not that I think a BBD + Siemens merger is good for the market, but perhaps it'll open up room for more little guys domestically.

I think it'd be funny as heck if NJT's next MU order was won by Stadler, though it'd be out of character.

I suspect that regardless of how the 'merger of equals' goes, Siemen will make their influence felt early and heavily. They don't want to tarnish their rep in the railcar field.

mtuandrew wrote:Bombardier the worst? I beg to differ, aside from the AX and a few recent team orders BBD has been a largely reliable manufacturer.

I suspect that the streetcar riders of Toronto would disagree. Are you familiar with the massive delays in delivery of the TTC's fleet of BBD Flexiliners? First it was debugging delays involving the early cars, now it's manufacturing delays, and the cars they're replacing are now being held together with shoelaces and rubber bands as they soldier on well past their intended retirement.

ask MTA why they switched from Bombardier to Kawasaki and the loud cheering of all MofE employees ?

My mistake; I knew there were delays and overruns in Toronto but not their extent.

Figure on someone screaming "MONOPOLY" if this gets anywhere near serious merger talks.(European trade commission?)

Backshophoss wrote:Figure on someone screaming "MONOPOLY" if this gets anywhere near serious merger talks.(European trade commission?)

When ABB and Daimler (AEG) merged their rail operations into one joint company, AdTranz in 1995, there was no concern from the EU regarding antitrust issues, as ABB had its market share in Scandinavia while Daimler/AEG competed with GEC-Alsthom and Siemens throughout the rest of Europe.

To BBDs credit, the octogons are actually really good pieces of rolling stock, and they can make some pretty good stock in Europe. The way I was seeing in other articles was that it would essentially be a Siemens buyout of BBD's transit business, which would only mean that it would probably fix a lot of BBD's issues with supply lines and expertise, which have been their main stumbling blocks.

Siemens has been doing well lately, certainly in the US. Based on what I've read here, Bombardier has been failing as a corporation and needs to be recapitalized. And if BBD has been on Amtrak's ban list, a merger would solve that.

R36 Combine Coach wrote:

Backshophoss wrote:Figure on someone screaming "MONOPOLY" if this gets anywhere near serious merger talks.(European trade commission?)

When ABB and Daimler (AEG) merged their rail operations into one joint company, AdTranz in 1995, there was no concern from the EU regarding antitrust issues, as ABB had its market share in Scandinavia while Daimler/AEG competed with GEC-Alsthom and Siemens throughout the rest of Europe.

Oh well...
I work for a company that uses the first generation of ADtranz-"Variotrams" (=V6). Luckily, we have only 6 of them, since 1996.
No other vehicle has had so much teething-problems, and still has, as these small batch of the "dirty half dozen".
I can remember at least three "events", that put these cars out of service for months.
They're cold in winter, hot in summer, slow in every way, and make noises you would expect from a century old horse tram on worn out tracks.
The latter led to a half-year grounding because of major cracks in the carbody around the doors and the articulation-hinges. When I heard about that, I opened a bottle of champagne as I expected that this would be the end for that snail-paced rattleboxes- but I was wrong.. The cracks have been welded, but as I was told it would be only a matter of time that they would appear again.
The floors are rotted through and have been completely replaced the second time. I don't remember such a thing from the proven DÜWAG-trains.
So, please don't be too much confident into ADtranZ-products. The fact that the cars mentioned are still in service for more than 20 years is only due to the fact that there are no relieable spare vehicles left, and everything with wheels has to roll...

Motorman wrote: So, please don't be too much confident into ADtranZ-products. The fact that the cars mentioned are still in service for more than 20 years is only due to the fact that there are no relieable spare vehicles left, and everything with wheels has to roll...

ADTranz was a bit hit and miss in the US. The AEM-7s (ASEA) were excellent, the ALP-44s (ABB) were good too. The Septa M-4 cars are pretty decent, but came in way too heavy. Ditto the N5s. The ABB rebuilds of the Arrow IIIs netted the only mainline trains in the US that can get out of their own way (when working right), but they're flaky as they've aged and they can't go faster than 80mph (130 kmh), which everyone moans about but really isn't a big issue on most of NJT (even on the corridor, it's not like the Multilevels spend much time above there, save for Jersey Ave to Princton Junction to Hamilton).

The ALP-46 has turned out to be decent.

I'm not sure how Amtrak or NJT feel about this merger (not like anyone cares, it's their problem, not BBD and Siemens'). It'll depend on who takes charge, which I suspect will be Siemens. Let's face it, they're merging because BBD is in big trouble all around, and needs to do something. Siemens has a century or so of doing this stuff well to point to.

The passenger rail equipment market is quite simply Global in scope; as such I doubt if any trade regulatory authority is about to yell monopoly.

There is no longer a US sourced passenger rail equipment market, i.e. Budd, Pullman, but rather foreign sourced players setting up shop on US soil and building what they must here to meet "Buy American" requirements.

Now there is a new kid on the block; the Chinese.

They have been awarded railcar contracts from Boston, Chicago, and LA transit agencies. They have announced or are building assembly plants in both Chicago and Springfield MA (there's full employment in Boston nowadays; doubt if same can be said of Springfield). They could also have visions of Talgo's "hell on wheels" business plan - and with much greater impact and leverage to say "don't give us more orders and we pack up".

In short, the market is Global, and the US has no players. But if there is to be any kind of rail passenger service, the demand is there. No one of sound mind will play the monopoly card when the market is evolving into a "Eurasian Duopoly".

I would think the authority most likely to look in askance at this is the EU Competition folks. Siemens+Bombardier would remove several areas of light and heavy rail competition, leaving Alstom, CAF, Hitachi (who just absorbed the wreck that is Ansaldo-Breda) as major players. Their attitude in such matters is usually fairly robust, and may require some business units to be divested or retained by Bombardier.

I'm not sure what the competition is like in signalling but after the L Bombardier took in London that business was probably not in great shape anyway.

There are still North American builders, they just don't build passenger cars. Having said that, if I am not mistaken, Bombardier wants out of the rail business in the worst possible way to focus on jet skis or something like that. Also lets not forget what is probably their finest piece of Bombardier built equipment out there, the Superliner IIs.
Cheers,
Nick