• What's next for GE and Erie?

  • Discussion of General Electric locomotive technology. Current official information can be found here: www.getransportation.com.
Discussion of General Electric locomotive technology. Current official information can be found here: www.getransportation.com.

Moderators: MEC407, AMTK84

  by MEC407
Jay Potter wrote:This and a number of other Internet discussions I've read in recent years have included references to GE locomotive prices being lower than EMD locomotive prices; however I don't recall any of those discussions citing any actual prices. Can anyone provide any specific pricing examples?

It's difficult to say "A GE ES44AC costs $_____ and an EMD SD70ACe costs $_____," because there is a lot of variation depending on the size of the order, the options a railroad chooses to add or delete, whether or not the purchase price includes a service contract, etc... but what makes it even more difficult is that there's usually no news coverage when a freight railroad buys locomotives.

It's a little bit easier with commuter rail locomotives because they're purchased by public agencies, and when a commuter rail agency buys new locomotives, it gets a ton of coverage in the newspapers, often including a total purchase price for the order -- for example, you might see something along the lines of "ABC Commuter Rail awarded a bid for 16 passenger locomotives to XYZ Motive, Inc., totaling $64 million." Then you could divide $64 million by 16 and get a per-unit price of $4 million. Unfortunately it's hard to decipher how much of that $4 million is for the locomotive and how much of it is for a service contract, training for ABC Commuter Rail's employees, etc., but at least with a public agency you could submit a FOIA request to get more specifics.

Conversely, when a freight railroad buys locomotives, it's not news. The bigger Class I roads will usually issue a press release of some kind, but generally they don't include prices. You might be able to find out the prices if you're a stockholder, but I have no experience with that.

The exception is when private railroads get new "green" switchers, partially or fully funded by government agencies -- in that case it's a lot easier to find out the purchase price, and there tends to be more news coverage because of the "green" angle. Not so with line-haul locomotives they buy on their own dime, unfortunately.
  by Jay Potter
MEC407's comments seem reasonable to me; but they bring me back to my original issue. If specific locomotive pricing information is so difficult to obtain, what basis is there for the belief, which has been periodically expressed during Internet discussions, that GE locomotives cost less than comparable EMD locomotives? That belief could certainly be accurate; but I've always been curious about the basis for it.
  by MEC407
Definitely a valid question. It would be great if there was some way to find out. Union Pacific would probably be the ideal candidate, as they tend to order from both builders and tend to spec their locomotives pretty similarly -- i.e. a UP SD70ACe is likely to be spec'd similarly to a UP ES44AC.
  by MEC407
From GoErie.com:
GoErie.com wrote:Urban development in Australia, South Africa and Brazil has brought significant business to GE Transportation, which on Friday announced fourth-quarter revenues of $1.5 billion -- a 43 percent increase from the same period in 2010.

Profits also were higher: $226 million for the quarter, up from $73 million the year before.

Most of those orders -- freight-train locomotives, and a variety of mining equipment -- went overseas.

"They need materials to build houses and schools and roads," said Stephan Koller, a spokesman for GE Transportation. "All those commodities are coming out of mines. So you need mining trucks. And you need locomotives to transport it.

"That puts us in the sweet spot."
Read more at: http://www.goerie.com/article/20120121/ ... er-numbers
  by Allen Hazen
If I were a GE stockholder (which I'm not) and not just a fan of GE locomotives, I would be glad to see that NBC has been gotten rid of. (This is mentioned toward the bottom of the article MEC407 linked to from the Erie newspaper.) Television networks are such a different kind of business from the engineering stuff that forms the historic core of GE's business that it is hard to imagine the same management team being good at both-- and I'd rather have GE's top people able to concentrate on the core without being distracted by peripheral ventures.

GE itself actually thinks like this to some degree. For some decades the company has made a point of selling off business lines in industries where it doesn't see itself being one of the top two (or so) firms world-wide: in part to limit the number of industries the company is involved in, so top management can actually understand them all.

For a railroad enthusiast, however, it is sobering to see just how small a proportion of GE's total business GETS represents: around 3%.
  by MEC407
From GoErie.com:
GoErie.com wrote:GE Transportation is sticking with its game plan.

And that plan called for the company to keep investing in the business, even during the darkest days of the recession and even as the Lawrence Park plant experienced massive layoffs of nearly 1,500 people.

That's just what GE Transportation has done, spending $1 billion in new facilities and technology since 2010, said Lorenzo Simonelli, the company's chief executive.
Some of the company's investments include money for a new plant in Fort Worth, Texas, the development of a new battery plant in Schenectady, N.Y., $72 million for two engine plants in Grove City and $136 million to upgrade the Lawrence Park plant.
Work also continues on the hybrid locomotive, a concept that was introduced in 2005.
The company's goal is to have the hybrid available for sale in 2016 when new, more stringent emissions standards take effect.
Read more at: http://www.goerie.com/article/20120215/ ... paying-off
  by Ira
Best Answer - Chosen by Voters
They cost between 1.8 and 2.5 million dollars the last time i heard a price named.They could be more now as that was a while back.
UPRR engineer
  by MEC407
"the last time I heard a price named" and "that was a while back" doesn't tell us much, unfortunately.
  by E-44
It's not like running down to your local dealer and working out a price or going to locomotives.com. Some units are leased and some are sold. GE Capital finances both ways. Final prices depend upon service and support agreements, parts inventories, emissions kits and, yes, size of the order. There really is not a publicly available "MSRP."

The deals get even more complicated when GE sells "kits" that are made in Erie (and soon in Texas) to be assembled in a foreign country. Then there may be a third-party arrangement for the assembly and testing or a joint agreement with the buyer whereby GE provides on-site expertise to direct the assemblies and conduct testing.

GE might just be able to out-finance EMD, as opposed to simply producing a less-expensive product. And right now, the GEVO is a superior product.

And there are going to be some amazing leaps forward in battery technology in the next 2-3 years that will propel GE ahead of the competition thanks to the huge investment they've made in the new operation in Niskayuna (Schenectady).

But then again, I'm prejudiced and I do own stock in the company :-)
  by MEC407
More good results for GE Transportation:
GoErie.com wrote:Visitors to the General Electric Co. website were met Friday by an image of a shiny, new, Erie-built locomotive.

Maybe it was a coincidence. Or maybe it was a tip of the cap to GE Transportation for its starring role in the company's earnings report.

That Friday morning report brought a mixed bag of news for the Fairfield, Conn.-based conglomerate, which beat the predictions of analysts but saw profits fall 12 percent compared with the first quarter of 2011.

But the news was all good from GE Transportation, Erie County's top employer.
Read more at: http://www.goerie.com/article/20120421/ ... ofits-fall
  by Ira
But with all the talk of fort worth building loco's where does that leave Erie? What is the future of the Erie plant, what will they manufacture. There is a contract in 2015 to be worked out.... with fort worth looming. My guess is Erie will be building something new, fewer employes??? What are your thoughts.
  by DutchRailnut
instead of starting rumors, maybe we should wait for new plant and the 2015 contract, looking for monsters in shadows won't solve anything.
  by MEC407
From GoErie.com:
GoErie.com wrote:Letters were sent Monday to employees nearing retirement that the company would like 75 of them to take early retirement.

The lower demand for mining equipment, which has been well-chronicled in the media, comes as the company is ramping up capacity at its new plant in Fort Worth, Texas.
. . .
Roger Zaczyk, president of Local 506 of the United Electrical Radio & Machine Workers of America in Lawrence Park Township, said he's been told the company should be in good shape through at the least the third quarter of 2013.

"Nobody is getting laid off permanently," he said.

The net result, said Miller, is, "Basically there are some folks who are going to have the opportunity to retire a little bit early."
Read more at: http://www.goerie.com/article/20121106/ ... ning-slows
  by GEVO
950 people will most likely be losing their jobs in Erie as Evolution Locomotive production moves to Fort Worth. This would be all the Class 1 Locomotives used in North America. They have mentioned that within the next 60 days, the union and company can negotiate to try and keep some of the jobs in Erie. But based on past history, such as stating over and over that the majority of production of locomotives would never be moved to Texas, seems like the company is just trying to squeeze the workers before the final hatchet falls.

Multiple articles at the Erie times on the subject.