RAILWAY AGE, SEPTEMBER 2019 ISSUE: The passenger rail market in the U.S. is, in a word, “challenging.” Many would say “problematic.” Aside from funding that’s entirely dependent on government, today’s market is deeply affected by partisan politics and stringent manufacturing requirements—who builds what, and where—among other concerns. Railway Age Editor-in-Chief William C. Vantuono spoke with Siemens Mobility President USA and Canada Marc Buncher about how this Germany-based but undeniably North American supplier views the market.
RAILWAY AGE: How are North American market conditions? In what sectors are you seeing growth? Where do you see opportunity? What sectors are problematic?
BUNCHER: We’ve experienced tremendous growth over the past two years. Our big rolling stock contracts garner a lot of attention—Amtrak long-distance Charger locomotives for VIA Rail and Virgin Trains—but our other businesses, which consist of Rail Automation, Electrification, Intelligent Traffic Systems and our aftermarket business have also had good years. North America remains focused on urbanization and that keeps interest levels high in intelligent trains and infrastructure. For us, that’s adaptive traffic control, connected vehicle tech, energy-efficient locomotives, improved availability and capacity (i.e. predictive maintenance, CBTC) and multi-modal connectivity for trip planning, ticket purchases and a better passenger experience. We’re also benefitting from a resurgence of interest in both accessibility of mass transit to underserved commuters and luxury train travel. There are big projects in the U.S. and Canada that aren’t too common for us: The RER project in Toronto, California High Speed Rail and Virgin Trains’ new Los Angeles lines are incredibly exciting prospects for our industry and our company
As far as areas that are problematic, our business pretty much reflects the industry, which is still pretty siloed! I’m constantly amazed at the surprised reaction from customers in one area of our business, like rolling stock, who have absolutely no idea that we also provide signaling and automation for some of the biggest railway lines on the continent. For Siemens Mobility, we’re now one of the largest, if not the broadest transportation company in North America: locomotives to streetcars, signaling to traction power substations, Connected Vehicle to Adaptive Control Street Traffic. We’re seeing more and more synergies as technology moves the needle toward a more centralized, collaborative control model.
RAILWAY AGE: Given that passenger rail agencies are dependent upon government support, whether it’s federal, state or local, how is the current political climate affecting your customers? How is that affecting business? Are there any real concerns, going forward, about transit funding?
BUNCHER: We have a broad range of customers across the U.S., and for many, federal funding availability is critical. They don’t want to rebuild. They want to build, to innovate and, more often than not, they’re unable to get the funding when they need it.
RAILWAY AGE: There is a movement to get a meaningful “rail title” in long-term transportation funding. How is Siemens participating?
BUNCHER: I spend quite a bit of time in Washington, D.C. with policymakers, trade associations and industry colleagues to make recommendations for policies that will ensure that Americans can enjoy the latest, safest and most efficient transportation technology. The law was last updated in 2015, and a tremendous amount of innovation has occurred since then—things like making 100% availability of rail vehicles a reality thanks to modern digital capabilities. A big part of our role is sharing this kind of technological advancement so that Congress can focus on the “art of the possible” as it drafts the rail section of the bill. I think being Buy America helps in the U.S. too. Our products have to be local. We have 2,000-plus suppliers in the U.S. and we’re working to build a larger supplier network in Canada too.
RAILWAY AGE: There is a serious misconception, perpetuated by the general media, that there are “no U.S. passenger railcar builders” since most companies—despite having major U.S. operations employing thousands of U.S. workers—are domiciled in Europe, Japan, South Korea, etc. How are you dealing with this?
BUNCHER: I’m happy you asked this. Every time I am on The Hill I hear this. Our Rolling Stock plant has 1,500-plus employees. I have seen rolling stock plants all over the world and I have never seen anything as comprehensive as our plant in Sacramento. We make everything there. Usually you see a plant that specializes in locomotives or passenger cars, or even one that just does streetcars. We do it all in one plant: locomotives, passenger cars, LRVs and streetcars … the full build, not just final assembly. We even fabricate the bogies there. We also have 1,000 or so additional employees in engineering, manufacturing, assembly and testing in plants in Marion and Louisville, Atlanta, Portland, New Castle, McClellan, New York City and Pittsburgh that many don’t realize exist. Siemens has been in the U.S. for more than 150 years.
RAILWAY AGE: Regarding CRRC and China: Some believe that China’s goal is to dominate the global railway equipment market, and that CRRC is able to undercut competition by low-bidding on contracts, as the Chinese government provides CRRC with financial support. Many in the industry feel that this is unfair and monopolistic. As well, there is a movement afoot in Congress to ban CRRC (and possibly other Chinese companies) from the U.S. market. Do you agree with these viewpoints? Is Congress’ attempt to enact legislation a political stunt, or is it something worth considering, perhaps in a measured way? Many feel that this would be a form of economic protectionism, which in the long-term may be detrimental to the economy. If the Chinese are banned or restricted—and this is already occurring with trade tariffs—could this spill over into other companies like Siemens, Alstom, CAF, Kawasaki, etc.? What’s at stake? What could be the unintended consequences? These are difficult questions.
BUNCHER: Yes, these are difficult questions, and we’re not sure we have the answers. We are eager to compete against any company in the world and confident that our value proposition is unique and compelling. Everyone needs to be concerned with a situation where subsidized state-owned companies can distort a market. We believe we need to focus on the facts and retain a fair, competitive environment for all.
RAILWAY AGE: What advanced technology is Siemens offering?
BUNCHER: We’re proud to be able to offer some of the most innovative technologies out there: predictive digitalized maintenance, autonomous capabilities, remote operations and maintenance connectivity. Our customers are certainly aware of and eager to embrace some of the new technologies. But at the end of the day, it’s about funding: The heart is willing, but the wallet is unable. It’s often a choice between vehicles or new technology, rarely both.
RAILWAY AGE: What is Siemens’ viewpoint on autonomous or semi-autonomous rail vehicles? Is this the future? If it is, what sort of timeline are you envisioning?
BUNCHER: Autonomous vehicles are here to stay. The convenience and savings that this technology provides is hard to ignore. We’re seeing a lot of pilots roll out, including an autonomous shuttle that our connected vehicle technology is helping to run. That said, it’s something that is bound to be very disruptive on a lot of different levels. Elsewhere in the world, automated train operations are becoming commonplace—London, Paris, Nuremberg, Bangkok, the list goes on. I’d say we’ll shortly start to see some momentum in smaller railroads starting to use these in the U.S., with larger railroads taking a close look. More mainstream acceptance could happen within 5-10 years.