GE and Chinese CSR announce joint veture to develop US Bullet train

GE, China’s CSR to Invest $50 Million in Fast Rail

By Rachel Layne - Dec 6, 2010

http://www.bloomberg.com/news/20 ... speed-rail-bid.html

General Electric Co. and CSR Corp., China’s largest maker of rail vehicles, plan to invest $50 million in their U.S.-based venture for supplying passenger trains for high-speed lines in California and Florida.

The initiative may “sustain or create” 250 jobs by 2012, probably at GE Transportation factories in Erie and Grove City, Pennsylvania, the company said today. The partners also will form a business to work on medium-speed trains and on urban rail-transit systems, GE said in a statement.

“We are committed to advancing the global high-speed rail technology market,” said Vice Chairman John Rice, whose appointment last month to oversee a new international business structure from Hong Kong signaled Fairfield, Connecticut-based GE’s focus on overseas markets and partnerships.

The rail venture supports Chief Executive Officer Jeffrey Immelt’s goal of investing more than $1.5 billion in joint ventures in “key high-technology” sectors with China, adding $500 million to GE’s research centers in the country and boosting U.S. manufacturing.

The GE-CSR alliance may face competition from trainmakers including Bombardier Inc., Alstom SA and East Japan Railway Co.

Bombardier and China’s Ministry of Railways yesterday signed an agreement to co-develop train cars and signals for use in China and internationally. The accord establishes China Railway Signal and Communication Corp. as a strategic partner for Bombardier signal systems, according to an e-mailed statement from the Montreal-based trainmaker.

U.S. Projects

President Barack Obama’s administration is championing high-speed passenger rail projects, with $2.3 billion in federal funding allocated in January to the California line and $1.3 billion for the Florida project.

GE’s agreement on a so-called cooperative framework with CSR follows comments last week by Zhao Xiaogang, the Chinese company’s chairman, in Hong Kong that the companies may also compete for a project on the U.S. East Coast, and will decide which of the lines to bid on over the next three years. GE and CSR signed a memorandum of understanding on rail projects in 2009.

China’s passenger trains reach more than 220 miles (354 kilometers) an hour, while GE is the world’s biggest maker of diesel-electric locomotives. The venture aims to meet Buy America standards for U.S. content, GE said. three years, he said.