Talgo will return to Milwaukee

$73 million, 56-month Los Angeles Metro contract awarded last week

Spanish train maker Talgo Inc. plans to perform work on a $73 million contract for the Los Angeles County Metropolitan Transportation Authority at its Milwaukee facility in the Century City business park, Mayor Tom Barrett announced Monday during his 2017 budget address.

The Los Angeles County Metropolitan Transportation Authority board voted last week to award the contract to Talgo over Alstom Transportation Inc., which proposed to do the work at a facility in California but bid $10 million more than Talgo.

A Talgo train assembled at the Century City complex.

The contract calls for Talgo to overhaul 38 heavy rail vehicles with an option to overhaul another 36 vehicles. The full contract period is for 56 months.

The exact number of jobs the contract could bring to Milwaukee is unclear. Talgo plans to relocate some of its global engineering resources to Milwaukee for the project and will likely need to ramp up employment at the Milwaukee facility as well.

Department of City Development spokesman Jeff Fleming said the city’s understanding is that initial employment related to the new contract will be between 25 and 30 people.

A Talgo spokeswoman indicated the company is waiting for LA Metro to complete its award process before issuing a statement on receiving the contract. That is expected to happen within a few days.

Talgo’s history in Milwaukee and Wisconsin is a complicated one. The company was selected to build trains for a high-speed rail line between Milwaukee and Madison, but Gov. Scott Walker cancelled the project after he was elected in 2010. Then the state refused to pay for an take ownership of trains Gov. Jim Doyle’s administration had ordered from the company.

In 2014 the company notified the city is was terminating its lease and moving out of Century City, taking the two trains it had built for Wisconsin with it. Fleming said the company has retained some storage space in the building, but no manufacturing has been taking place.

In his budget remarks Monday, Barrett said the city had worked to maintain a relationship with the company, even as Talgo was engaged in litigation with the state of Wisconsin over the train deal. The lawsuit was ultimately settled, with the state paying Talgo $40 to $50 million.

When he ran for governor, Walker criticized the $47.5 million non-bid contract that the state signed with Talgo under the Doyle administration.

“As hard as the governor worked to kill this project, we worked even harder to build a solid relationship with the company, and that paid off,” Barrett said. “Talgo could have undertaken the new Los Angeles work almost anywhere in the country. Yet it chose Milwaukee. Despite the hard feelings between Talgo and the state, the company recognizes its Milwaukee location is a great place to manufacture.”

Fleming said the city has been in regular contact with Talgo, including some other opportunities that didn’t materialize. DCD Commissioner Rocky Marcoux has had frequent communication with Talgo’s North American leadership and the mayor met with LA Metro officials during a site visit in January.

Asked for comment on the Talgo portion of Barrett’s budget address, Walker spokesman Tom Evenson reiterated the governor’s position that the rail line would not have been covered by federal money.

“The $810 million rail line between Milwaukee and Madison was a boondoggle for taxpayers and would have cost Wisconsin taxpayers far more than promised, as the taxpayers of California have seen over and over again,” Evenson said in an email.

Sign up for BizTimes Daily Alerts

Stay up-to-date on the people, companies and issues that impact business in Milwaukee and Southeast Wisconsin

Arthur covers banking and finance and the economy at BizTimes while also leading special projects as an associate editor. He also spent five years covering manufacturing at BizTimes. He previously was managing editor at The Waukesha Freeman. He is a graduate of Carroll University and did graduate coursework at Marquette. A native of southeastern Wisconsin, he is also a nationally certified gymnastics judge and enjoys golf on the weekends.

No posts to display