Rail still rules in Steuben County economy
Bombardier enters strong scene dominated by Alstom, TTA
By ROB MONTANA EVENING TRIBUNE

LYNN BRENNAN/THE EVENING TRIBUNE Rail cars sit in the parking lot of one of Alstom's Hornell plants Thursday afternoon.

The Maple City was at its booming best when the Erie Railroad was driving its economy.

When the rail industry faltered in 1976 with the formation of Conrail, so too did Hornell, grasping to hold onto its roots. The city has been able to rebound from the dark days by - what else - depending on the rail industry.

Though traditional rail hasn't led the resurgence, the appearance of Alstom in the Maple City - and the big contracts the company has been awarded in recent years - has helped Hornell get closer to its thriving past. Alstom's Hornell operations focus on transit cars, refurbishing and building new ones for metropolitan mass transit systems such as subways across the country.

James Griffin, City of Hornell Industrial Development Agency executive director, called the transit manufacturing business in the area "upbeat." He said there are nine companies in Hornell and within a 20-mile radius that deal with transit car manufacturing in one capacity or another.

"We've really become a transit hub for North America here," Griffin said. "It started out a few years ago when the IDA bought the shops wondering where we would go.

"Rather than succumb to what everybody was doing, we decided to stick with the railroad industry," he added. "I think it was a wise decision, and it's really paying off with more people employed here than we ever had - in manufacturing jobs."

Hogan attributed the regional transit growth to an overall growth in the industry.

"It's just been that period of time where a lot of transit authorities have let a substantial amount of work, in most cases new car work," he said. "The R- 160 is really the contract that has sustained new car growth for Alstom; also the new car WMATA contract. That work is hitting at the same time."

What started the boom again was the fact Hornell had a knowledgeable, skilled workforce that could step right into the jobs Alstom had available, both Griffin and Hogan said. MK had an average employment of 850 for about 13 years, Griffin said, while Alstom is over the 1,000- employee mark and adding more.

"They're in the process of hiring 200 so they can get that wrapped up for the R-160 production that will start this spring," Griffin said. "Alstom has a couple of great contracts, but they've got to perform. With the options they have, they've got enough work to last five or six years."

Hogan also stressed the importance of Alstom obtaining the options for both of the big contracts - R-160 and WMATA - to continue thriving.

"Very seldom do transit companies make money on the first line of cars," he said. "They go through and work out all the bugs during the first part, make corrective action during that process, so when they get to the options they are a well-oiled machine and they can reduce their man hours."

The other piece of the puzzle, Griffin said, was Alstom's "urging their suppliers to get closer to Hornell."

"That's what brought Testori here from Nova Scotia," he said.

Hogan also stressed the importance of Alstom focusing on Hornell as its main base of operations for transit cars, as opposed to its precursor - Morrison Knudsen - which had four manufacturing operations going at the same time when it began to falter.

"Alstom is saying 'Hornell is our baby,'" he said. "They're saying they're not going to do new car manufacturing anywhere else but here.

"They may look for other places for warehousing and rehab work, but as far as new car manufacturing, the Hornell shops are it," Hogan added.

Another recent development regionally was the announcement Thursday that Bombardier had acquired Hornell-based TTA Systems LLC's railcar overhaul division as well as specific overhaul contracts. A dollar figure in the deal was not released, and the deal is only for TTA's Kanona operations. It won't affect the company's Hornell office, which focuses primarily on components for transit cars.

In the region, railroads have become more attractive again, said Bill Burt, WNY&P president and chief executive officer. He said the most significant recent change was the replacement of Conrail with Norfolk Southern. Hornell was long dominated by the Erie Lackawanna Railroad, but Conrail took control of it as the Erie line was faltering.

"Conrail took over Erie Lackawanna, but didn't really want it," Burt said. "Erie was the competitor to the lines that helped form Conrail.

"A lot of us tried very hard to keep the Erie out of Conrail, but that was not successful and it ended up being the stepchild of Conrail," he added. "It isn't to say Conrail didn't want it, but they didn't maintain it."

That impacted the Maple City, Burt said, effectively taking the rails out of the railroad town.

"As we well know, what is now WNY&P was not well maintained and it was given up for dead," he said. "Hornell was not a railroad junction until 2002 when we finally got back to Hornell.

"Hornell had a history of being a railroad town and a lot of it has come back," Burt added. "Hornell is now at the junction of two very busy rail routes."

The upward rail trend is happening all over North America, he said, primarily for transport of merchandise.

"Highways are becoming increasingly congested, fuel prices are up and there's been a persistent driver shortage over the last 10 years," Burt said. "What economic development directors will tell you, and we hear it too, is if you don't have access to rail it's tough for business."

"It's a good thing," he added, "and the Southern Tier has not only managed to preserve but rebuild its rail service."