Wednesday, March 08, 2023

Siemens will invest $220 million in North Carolina rail car factory



Tue, March 7, 2023 
By Nandita Bose and Lisa Baertlein

WASHINGTON (Reuters) -Engineering company Siemens AG announced on Tuesday it is investing over $220 million to build a rail car manufacturing facility in North Carolina.

The announcement comes as the Biden administration and fellow Democrats direct billions in federal funding to upgrade aging infrastructure and increase U.S. manufacturing, hoping to encourage private-sector spending and create jobs. A bill subsidizing chip manufacturing has attracted large investments from companies such as IBM and Micron.

Siemens' new passenger-coach manufacturing facility, which will be built on a 200-acre site in Lexington, a 20,000 population town in central North Carolina, will bring 500 new jobs by 2028, the company said.

"We have a clear commitment from the administration to invest in infrastructure and in making a transformation of the mobility sector towards greener (power sources)," Siemens AG Chief Executive Roland Busch said in a telephone interview.

Busch said Siemens has a "strong foothold" in the market and sees longer term growth opportunities in high-speed rail.

The company's customers include Amtrak and dozens of transit agencies across the United States, which will be eligible for federal incentives for cleaner-powered locomotives.

Siemens' rail unit will be receiving a jobs development grant from the state of North Carolina, and the average salary for the new positions at the facility will be $51,568.

The grant agreement authorizes the potential reimbursement to the company of up to $5.63 million over 12 years, North Carolina Governor Roy Cooper's office said in a statement.

The German trains and software maker reported its strongest-ever quarter for its industrial business in February and raised its full-year profit forecasts.

Biden, who rode Amtrak for more than three decades while in Congress, has pushed investment in passenger rail and modernization of the busy "Northeast corridor," which is one of the nation's most congested rail corridors.

Mitch Landrieu, the White House official responsible for coordinating infrastructure fund disbursement, said the investment is "further proof that we're driving unprecedented private sector investment," with the implementation of the infrastructure law.

It is also critical for the Biden administration's climate goals, he said. "On the climate side we are getting ready for a clean energy economy. This is going to be a net zero facility."

The $1 trillion infrastructure law provides $66 billion for rail, an unprecedented boost in federal aid for trains. This includes $24 billion in grants for projects in the Northeast corridor.

Amtrak said in November it wants to expand dramatically across the United States and add up to 39 corridor routes and up to 166 cities by 2035.

(Reporting by Nandita Bose in Washington; Editing by Heather Timmons and Nick Zieminski)

NC city lands passenger rail manufacturing plant with promise of 500 new jobs


Courtesy Siemens Mobility

Brian Gordon
Tue, March 7, 2023 

On Tuesday, the North Carolina Economic Investment Committee awarded the German company Siemens Mobility a $5.6 million grant to construct a passenger rail vehicle manufacturing plant in the Davidson County city of Lexington, part of a broader $32.9 million package state and local governments plan to invest in the site.

The facility is expected to create 506 jobs by 2029 with a minimum average wage of $51,568.

Siemens Mobility, a division of the Munich-based conglomerate Siemens, currently produces passenger vehicles at a facility in Sacramento, California, but the company had sought to add a second U.S. plant east of the Mississippi River.

On Tuesday, the state shared that Siemens selected Lexington over an alternative site in Spartanburg, South Carolina. The county seat of Davidson County, Lexington is about 60 miles northeast of Charlotte and 100 miles west of Raleigh.

“The expansion will provide additional capacity to meet anticipated growth in demand, provide facilities for maintenance and servicing for the Eastern region,” said Mark Poole, finance director for the North Carolina Department of Commerce.

Siemens Mobility’s initial agreement with North Carolina was set to begin in 2024, but the company requested a one-year delay citing potential supply chain issues and labor shortages.

According to the Walden Model, which North Carolina uses to calculate the value of incentives it awards companies, the Siemens plant in Lexington will increase the state GDP by around $1.6 billion by 2036, the last year of the company’s agreement with the state.

By then, the state estimates the project will have added $30.3 million in net revenue.

The $5.6 million job development investment grant, or JDIG, will only be realized if Siemens achieves its hiring targets. But the project’s overall incentive package is much greater, as the North Carolina Department of Transportation will allocate $9.4 million to improve infrastructure around the site and the state will put $626,300 into a local utility fund. Additional public money will go to local community colleges to train future Siemens employees.

In total, North Carolina’s package for the Siemen’s plant is worth $16.8 million, while local incentives from Davidson County and the city of Lexington total an additional $16.1 million.

This story was produced with financial support from a coalition of partners led by Innovate Raleigh as part of an independent journalism fellowship program. The N&O maintains full editorial control of the work.

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