How Siemens and Alstom Are Preparing for a Passenger Rail Boom in the U.S.

6


Once a leader in passenger rail, the U.S. has since fallen behind many industrialized nations in rail funding and ridership — but investment is picking up.

Investment in passenger rolling stock across North America, which includes high-speed rail, light rail, metro, passenger coaches and locomotives, is expected to increase 4.7% per year between 2021 and 2026, according to a projection from McKinsey & Co.

A significant boost to the rail industry comes from the Infrastructure Investment and Jobs Act (IIJA), which was passed in 2021 and designates $66 billion to improve the nation’s rail system.

“I think passenger rail in the United States has been a little bit slow in years past because of funding,” Marc Buncher, president and CEO at Siemens Mobility North America, told CNBC. “If you look at the federal funding that other nations get, it’s tremendous. Federal funding is the one piece that we need. And now that we have it, I think you’re going to see a tremendous amount of growth in the industry.”

Federal investment is also pushing companies to establish a domestic supply chain. At its facility in Hornell, New York, train maker Alstom is working on fulfilling an order for Amtrak, the federally owned U.S. passenger train operator, to upgrade its fleet of Acela trains.

“Today you probably have about a half dozen different rolling stock suppliers in the U.S. that are building trains,” Scott Sherin, chief commercial officer at Alstom U.S., said. “The challenge had always been the fragility of the supply chain behind them. And what we’ve seen with the investment that Amtrak has made in these next-generation high-speed trains is: We’ve brought about a dozen different suppliers from primarily Europe that have set up and done foreign direct investment in the U.S. and have set up factories and … capability.”

Aside from the government, private companies are also working on beefing up passenger rail in the country. Brightline has already built out its passenger rail service in Florida, and its sister company, Brightline West, is working on a high-speed passenger rail line between Las Vegas and Southern California.

CNBC visited rail car manufacturers Siemens and Alstom to see how they are ramping up passenger train production and to learn how the companies view the future of passenger rail in the U.S. Watch the video to find out more.

Source: Consumer News Business Channel