By Larry Sandler of the Journal Sentinel
The decision that is ending Talgo Inc.’s manufacturing future in Milwaukee could open new opportunities for the company in other states.
Talgo, the Spanish-owned train manufacturer, is seeking high-speed rail business from three of the states that will share in the federal money taken away from Wisconsin and Ohio.
On Thursday, the U.S. Department of Transportation announced it would pull nearly all of the $810 million in stimulus cash awarded to Wisconsin for a 110-mph line linking Milwaukee and Madison because Governor-elect Scott Walker had vowed to kill the project. Ohio also lost almost all of the $400 million it was allocated for a 79-mph line opposed by Governor-elect John Kasich.
Federal officials redistributed the $1.2 billion from the two states to California, Florida, Washington, Illinois and nine other states.
On Friday, Talgo announced it would close its Milwaukee plant in 2012, leaving only a maintenance base. The company is building two trains for Amtrak’s existing Milwaukee-to-Chicago Hiawatha line and two trains for Oregon, but it also had hoped to build two trains for the Hiawatha extension to Madison.
In a notable contrast, however, Talgo has joined the competition to build and operate a high-speed rail system in Florida, even though that state’s governor-elect has voiced concerns about the $2.7 billion project’s future.
Talgo also plans to compete to build trains for Illinois and Washington when those states seek proposals next year, said Nora Friend, a Talgo vice president.
But the Florida and Wisconsin situations differ significantly, because Florida’s governor-elect didn’t close the door to proceeding with rail plans the way that Walker did, Friend said in an interview before the funding decision was announced.
Florida’s Governor-elect Rick Scott also is skeptical about the costs of a planned 168-mph high-speed rail line from Tampa to Orlando. But unlike fellow Republicans Walker and Kasich, Scott didn’t issue an unequivocal promise to end his state’s high-speed rail project, Friend said.
Instead, Scott has said only that he doesn’t want state taxpayers to cover any of the Florida system’s costs. The federal government has already awarded the state more than $2 billion for construction, and Thursday’s decision added up to $342.3 million more. Florida officials have said the companies building and running the system should absorb all operating costs themselves.
With that in mind, the bidders are coming up with their own plans to fill any remaining funding gap, Friend said.
Talgo has joined forces with other Spanish, American and Portuguese companies in Florida Mobility Partners, one of eight international consortiums of high-speed rail engineering, construction and operating businesses vying for the Florida work.