The fact that Talgo Inc. returned to Milwaukee is reason enough for city leaders to celebrate. So, too, is the fact it will bring dozens of jobs to the Century City site on Milwaukee’s northwest side. But the real reason for celebration is the longer-term prospects for the Spanish train maker to establish a new line of business in the city.
Talgo is overhauling trains from the Los Angeles County Metropolitan Transportation Authority’s Red Line at the facility. The work involves replacing much of the trains’ internal systems, including propulsion, braking, communication and automatic train controls, said Ferran Canals, Talgo project manager.
The nearly five-year, $73 million contract calls for Talgo to overhaul 38 trains initially and there is an option for another 36.
Antonio Perez, Talgo president and chief executive officer, said while the 75-year-old company has long built and serviced trains, this contract marks the first time the company is doing maintenance on equipment not manufactured by Talgo.
“This is a new line of work,” said Department of City Development commissioner Rocky Marcoux. “They’ve got a lot riding on this. This is a big bet for Madrid to enlarge their business. If this contract doesn’t go well, they’re not going to get any more.”
Canals said big, high-speed rail projects may come along only once every 10 years and there are often six or seven companies in the running. But there are four or five major train overhaul projects up for bid each year, he said, and there are usually only two or three companies bidding on them.
“There are plenty of projects,” Canals said.
Talgo officials pointed out there is plenty of room in the Century City facility to house more work beyond the Los Angeles contract and that is what gives city leaders hope the company’s presence will grow beyond the 40 initial jobs.
“They could have hundreds of people working here if they get those contracts. That’s what’s exciting about it,” Marcoux said.
Of course, Talgo, Milwaukee and Century City have combined to create great expectations before. During a recent open house, Mayor Tom Barrett said a four- or five-hundred-page novel could be written about Talgo’s history in the city.
“It would start with hope, anticipation, joy, ecstasy,” Barrett said. “It would turn to heartbreak and anger, it would turn to litigation; it would then turn to trust and friendship and redemption and hope, and it would have a happy ending.”
Talgo was selected to build trains for a high-speed rail line between Milwaukee and Madison, but Gov. Scott Walker cancelled the project, fulfilling a promise he made during the 2010 gubernatorial campaign. The company sued the state and the two sides eventually settled for nearly $10 million. Talgo ended its operations in Milwaukee in 2014.
“We’ve been able to take what was a very bitterly disappointing story for some people, for others a joyful story to pull the rug out from under a company that had a signed contract, but we were able to turn that around,” Barrett said.
Perez said the company was pleased to be back and had a great experience with Milwaukee and its workforce.
“We are committed to stay here at least five years and we expect many more,” he said.
Canals said the company will primarily be looking for electricians and the jobs will be at a slightly elevated skill level.
“The good thing is we did hire certain electricians in the past for the first project and we’ve been reaching out to them and some of them are willing to come back,” he said. “We already know people here. It’s not like stepping into a brand new city and where do we start.”
Alderman Khalif Rainey, who represents the Century City area, said Talgo’s return is desperately needed.
“Today represents promise. It represents hope,” Rainey said. “I hope this is a demonstration to others within the city of Milwaukee that this can take place right here on the north side of Milwaukee.”
He envisioned a future where the amount of work being done at Century City causes traffic jams on West Capitol Drive.
To make that vision a reality, the city will have to find more companies for the Century City site, starting with the speculative building constructed at the north end of the property by General Capital Group LLP. The 53,000-square-foot facility was completed last year and while Marcoux said there has been interest, the city hasn’t found the right fit yet.
“A lot of it right now has been the jobs coverage,” he said. “It’s getting a company that’s going to provide a significant number of employees.”
Marcoux and other city leaders believe the area around Century City has an advantage over suburban sites and it is the same one that brought Talgo back to Milwaukee.
“There’s a scarcity of labor in the suburbs,” he said. “We have the labor force. I think more and more people are putting two and two together.”