Training Detroit
- Posted by ryan on January 11th, 2009 filed in Transit
In comments, Daniel writes:
In Matt Yglesias’s post on HSR he argued that it wouldn’t be a good idea to have former Detroit autoworkers build the trains. What do you think about that?
I think it would be great if Detroit autoworkers could find jobs building trains, but I think the government should absolutely not be using policy to make this happen. For several reasons.
One of them is that an attempt to rejuvenate Detroit by encouring train manufacturing is unlikely to work. As Paul Krugman noted in his Nobel speech, the economic conditions that supported large-scale manufacturing agglomerations are largely gone, particularly in mature industries. And where we’ve seen former industrial cities reinvent themselves successfully, it’s almost entirely because those cities were able to transform into knowledge and service economies. There are still economic forces pushing people together in those sectors. If Detroit is going to recover as a city, it won’t be because of growth in manufacturing employment, I’m afraid.
Perhaps more importantly, an effort to artificially create a train-building industry could seriously threaten rail in this country. Given the expertise other countries have developed building trains, it would be very hard to establish a domestic industry without committing domestic rail systems to purchase new American train cars. This is probably against international trade rules, but even if it weren’t it would prove disastrous. You’d have inexperienced firms debuting new products for a captive market — a perfect recipe for low quality, which would hamstring fledgling rail systems. Domestic rail can be a serious transportation option or a jobs program for American train manufacturers, but I don’t think it can be both.
If we want to create jobs in rail and rail technologies in this country, the very best thing we can do is increase demand for rail products, by investing in new systems and capacity. Given the size of the American market, I suspect some new start-ups will find it profitable to operate here, and foreign producers may also open plants in America.
January 11th, 2009 at 2:40 pm
Ironically, train-making is the kind of things (lots of weight and volume) that benefit from a short supply chain. And you can’t outsource the track-building or maintenance.
January 11th, 2009 at 3:36 pm
There are already domestic content requirements on new transit vehicles paid for with federal aid. Factories for final assembly of rail vehicles exist in California, Maryland, and Oregon. Many components are imported; many are not. If the market expands, the percentage of components built in the U.S. will surely grow.
With the recent high level of the Euro, Siemens (owner of the Sacramento, California plant) has for the first time manufactured light rail vehicles in the U.S. for export to third countries, rather than concentrating all export production in Europe.
January 11th, 2009 at 4:06 pm
We can, however, very usefully employ Detroit auto workers to produce hybrid buses and trolley buses.
Quite obviously, given that we have the most backward rail safety system among the large high income nations on the planet, with the FRA focusing strongly on passive cash resistance rather than active crash prevention in order to allow bulk freight to be moved at the absolute lowest possible cost per ton-mile, a foreign train manufacturer that is producing large numbers of heavy rail, light rail, or mixed (tram/trains) for the US market will tend to have a specialized version for US regulatory standard that are manufactured here in the US.
Its just that Detroit is not the first place you’d think of to locate rail oriented manufacture with so many abandoned factory spaces available not far away with much better rail connectivity … northeast Ohio for example combines much better rail connectivity with ocean port connections to European specialty component suppliers.
January 11th, 2009 at 4:11 pm
A lot of the concern about ‘Detroit’ has to do with the web of suppliers- companies that make upholstery, wiring harnesses, light bulbs, paint, alternators, etc etc. Many of these products could be made for trains just as readily as for cars.
There is also some confusion about just where ‘Detroit’ is. Fixing ‘Detroit’ does not mean restoring the city of Detroit to its former status as car manufacturing capital of the world. It’s a figurative term referring to American car-making industries all across the country. Enough of this stuff is still close enough to Detroit the City to cause concern about what it would mean for Detroit the City if everything went bust, but the real concern is with the industry, not the city.
In fact, one of the first stimulus items that should happen is giving Amtrak a big chunk of money to refurbish rolling stock, and instructions that they seek bids from auto industry suppliers where they can.
January 11th, 2009 at 4:18 pm
Incidentally, why should we unilaterally surrender our advantage of having the largest internal market in the world?
Do you think the Japanese or the French did not restrict the purchase of HSR trains and supplies to their own companies? Of course they did, and the reason is plain- to develop industries with products for export. The US stands alone among developed nations in undercutting our own industries by purchasing abroad, and it hasn’t improved the life of the American worker.
January 11th, 2009 at 4:42 pm
I think bringing over the foreign producers is the only way to proceed in regards to high-speed rail. We are simply far too behind. If a city wants to court this industry it would be very smart have reps right pounding the pavement in Spain.
Manufacturing is not the only component needed, and in fact, the trains themselves are proportionately small (albeit expensive) component of the total industrial infrastructure needed to implement a high speed rail network.
Two important pieces are information technology and infrastructure engineering. Any area with a high concentration of these sectors, such as West coast and the Southeast (Detroit’s small counterpart in the SE, Greenville, S.C. - with the highest engineering population per capita - has the knowledge-based economy and tax incentives to ideally receive foreign firms).
January 12th, 2009 at 9:02 am
I agree, Eric. It makes no sense to require domestic content. If HSR is a good thing, then we should buy it as efficiently as possible.
January 12th, 2009 at 12:26 pm
Good heavens, we already do require domestic content and there have been no complaints about quality or delivery times. Considering how long it takes to build the track and hang the wire, there will be plenty of time to buy the trains.
January 12th, 2009 at 7:29 pm
Doug, January 12th, 2009 at 9:02 am:
If efficiency is a good thimg, then we should have an eye for dynamic efficiency as well as static efficiency. And in terms of dynamic efficiency, HSR is one of the industries where domestic content requirements have a case. We have a large chunk of the supply networks, we have the workforce, its the kind of technology intensive, capital intensive industry that we need to be creating a comparative advantage in.
Obviously the CAHSRA says they are going to take bid for established designs from established makers, so its obviously going to be European or Japanese technology (and of course there will be a lot of Japanese technology in the corridor, since they have a lot of expertise in running trains at 200mph+ through seismically active areas) …
… but getting into a knock-down, drag out political fight in the current environment to lift the current domestic content requirements needs a stronger case than just a hand waving claim of efficiencies.
January 13th, 2009 at 11:40 am
Bruce, I didn’t mean to wave my hand. My untested theory as to why so many good policy ideas go unaccomplished for so long is that we over-engineer them to please everyone. Hish speed rail is a convenience, also green, also commercially productive. To that we try to make it a jobs program, a protected infant industry, maybe route the train to serve some urban renewal goals, maybe make it greener by demanding that a percent of the electricity come from renewable sources, require organized labor and challenged business set-asides and pretty soon you have a shovel-ready perfect thing sitting on a table in umpteen city council meetings with outraged protestors filling the public seating area. I would rather see a somewhat greener, fairly productive resource built.