What’s an Industry Worth?

Brad Schmidt has a lengthy piece in the Sunday O about the delayed delivery of streetcars from Oregon Iron Works.

I won’t debate any facts in the article, I think Brad has a fix on the chronology and events, and I’m not in a position to comment on what he found internally at OIW. I might quibble with his characterization that the prototype is “four years late”. There was a deliberate choice to use the prototype to test a Rockwell propulsion system, and to let OIW take the vehicle on the road for a number of months while selling to other cities.

The question the article poses is whether the jobs created by having a U.S. (and Oregon!) based streetcar manufacturing industry are worth 8 months of delay in getting vehicles in service and getting 5 cars rather than 6? (The vehicle reduction was due to a decision early in the project to substitute an Elin propulsion system for the Skoda system – although there is still a potential to earn back credits that will help fund a 6th car eventually.)

The other question in play is whether the delay is the result of incompetence and the willingness of government sponsors to tolerate it, or if this is just plain hard?

Well, here’s my perspective:

  • Streetcars have a bright future in this country, and the opportunity to have a first mover position in a manufacturing industry is a very good bet.
  • We tolerated a delay of several months from Inekon when opening the extension to Gibbs and had to operate 100% of our fleet daily under similar circumstances. It’s not as if the European streetcar industry has a great track record in on-time delivery.
  • We’re still going to deliver this project within the budgeted contingencies – there will not be an overall project overrun.
  • Yes, it’s hard. I’m not claiming Oregon Iron Works is perfect, but building a streetcar is a VERY complicated enterprise.

Bottom line – I certainly regret the inconvenience to our passengers, but this is a very short-term blip in what I believe is still a terrific economic development opportunity for our region. And I’m grateful our local leaders have the resolve to stick with it.

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