Wabtec CEO: GE Partnership On New Locomotives May Be Ongoing
First Published Thursday, 2nd September 2010 06:01 pm - © 2010 Dow Jones
By Bob Sechler
Of Dow Jones NEWSWIRES
Wabtec Corp. (WAB), a maker of components for the railroad and transit industries, is characterizing a new partnership with General Electric Co.'s (GE) transportation unit as potentially ongoing if Wabtec's next-generation passenger locomotive is a strong seller.
Both companies also called the new locomotive--to be built by Wabtec with key parts from GE Transportation--a step toward higher-speed passenger train service in the U.S.
"It's really a building block," Wabtec Chief Executive Albert J. Neupaver said in an interview Thursday. "This type of design will help us start moving toward higher-speed locomotives."
Wabtec, based in Wilmerding, Pa., announced earlier this week that its MotivePower unit won a $114.6 million contract from the Massachusetts Bay Transportation Authority to supply 20 of the planned locomotives from 2012 to 2013. Terms of its partnership with GE haven't been released.
Specifications on the new locomotive call for it to travel up to 103 miles per hour, although Neupaver said it's being built for around 110 mph, based on technology that eventually could be used for even higher speeds. Truly high-speed rail is generally defined as 125 mph or faster.
"It leads us into the next generation" of higher-speed locomotives, Neupaver said. "We look forward to continuing to work with GE and this technology if the market accepts this."
The Obama administration has put an emphasis on the development of high-speed passenger train service in the U.S., setting aside $8 billion in federal stimulus money to help jumpstart the effort.
Neupaver praised the broad push but declined to quantify its potential near-term financial impact on his company, noting that the effort represents mainly a longer-term opportunity as various projects get off the ground. Wabtec's new locomotive contract wasn't related to the stimulus funds, he said.
Wabtec shares were up 33 cents recently, or about 0.8%, at $44.48. GE shares were off 1 cent, or less than 1%, at %15.01.
-By Bob Sechler, Dow Jones Newswires; 512-258-1690; email@example.com