• Yet Another Large Order from China

  • 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: AMTK84, MEC407

  by Allen Hazen
 
Thanks for posting that!
On re-reading, I noticed something I hadn't thought about the first few times i read the press release. 300 locomotives, to a new design, at the top end of GE's diesel locomotive range, and the deal is described as worth more than $450 million. That works out to $1.5 million per locomotive, which is about half what I would expect GE to charge a U.S. railroad for a comparable unit. (Given the number of units each of the bigger U.S. lines orders in a year, we can't even explain it away as a "volume discount" -- 300 units isn't that extraordinarily big any more!)
So--- One thing is that the Chinese drive a hard bargain (and GE ***really*** wants to get into the Chinese market). Another is that it is very unlikely these units will be built in Erie: the press release said that GE was going into a join venture with Qishuan, and I'd say it's a safe bet the locomotives will come out of qishuan's erecting shop. ($1.5 million seems like a low price even for the engine/generator/motors/control electronics that I'd expect GE to supply: maybe even the engines are going to come from a Chinese factory?)
  by nd2
 
I think there is a mix of everything you said here Allen. GE does give China a steep discount. The first order of 421 C36-7 was priced less than a million each.

I tend to believe most of 300 units will come from Erie though. Seeing that's how things have been done with the locomotive imports in China. (the previous imports from GE, Alsthom and Electroputere) all were produced overseas and shipped over. The technology transfer comes after that, then the local production will incorporate those designs.

The Ministry of railway also bought 6000 hp units from EMD, which is partnered with Dalian. The MOR is trying to set up QiShuyan and Dalian as competitors like GE EMD here in the US. Eventually the best of breed design from both builders will probably get absorbed into a domestic locomotive. Although China is moving towards electrification in a real hurry these days.

Allen Hazen wrote:Thanks for posting that!
On re-reading, I noticed something I hadn't thought about the first few times i read the press release. 300 locomotives, to a new design, at the top end of GE's diesel locomotive range, and the deal is described as worth more than $450 million. That works out to $1.5 million per locomotive, which is about half what I would expect GE to charge a U.S. railroad for a comparable unit. (Given the number of units each of the bigger U.S. lines orders in a year, we can't even explain it away as a "volume discount" -- 300 units isn't that extraordinarily big any more!)
So--- One thing is that the Chinese drive a hard bargain (and GE ***really*** wants to get into the Chinese market). Another is that it is very unlikely these units will be built in Erie: the press release said that GE was going into a join venture with Qishuan, and I'd say it's a safe bet the locomotives will come out of qishuan's erecting shop. ($1.5 million seems like a low price even for the engine/generator/motors/control electronics that I'd expect GE to supply: maybe even the engines are going to come from a Chinese factory?)