Bombardier España has a lot on its plate

Train manufacturer has successfully tapped export markets to weather the domestic crisis

Bombardier has participated in various rail projects in Asia and Europe, including the New Delhi Metro.
Bombardier has participated in various rail projects in Asia and Europe, including the New Delhi Metro.

Few companies have suffered the full force of the crisis in Spain more than Bombardier España, the Spanish subsidiary of the Canadian plane and train manufacturer. In 2007, the company sold 90 percent of its output in Spain in the domestic market but that figure has now fallen to 8 percent. Its turnover dropped from over 300 million euros in 2010 to 200 million last year. But despite this fall, Bombardier renewed its faith in Spain by transforming its production centers in the country into preferred suppliers for global demand, particularly trains and signaling equipment.

"Converting our plants into the most competitive in the group allowed us to open new markets for Spain," Bombardier España's chairman, Álvaro Rengifo, says.

Although turning the company's focus to overseas has not fully offset the drop of sales in Spain, it has saved it from a lot of other ills. Despite the crisis, it has maintained its workforce in Spain of 730. "We have even managed to create 150 new jobs, basically engineers," Rengifo says.

With the crisis starting to ease, Bombardier España is awash with projects in a new wave of investment in rail and urban transport worldwide. Its Trápaga propulsion systems plant in the Basque Country and its engineering center of excellence for signaling in San Sebastián de los Reyes, near Madrid, are global reference points. Despite the dearth of contracts in Spain, Trápaga has been kept busy with overseas orders.

With the crisis starting to ease, Bombardier España is awash with projects in a new wave of investment

"Not only are we building the locomotives for the Mecca high-speed train project, we are also working on the V300 Zefiro train for the Italian high-speed system and the monorail system that will carry 40,000 people per hour in São Paulo," Rengifo explains. The San Sebastián de los Reyes center has also won a tender contract worth over 100 million euros for the Long Island subway in New York.

Bombardier is benefiting from the push by the Spanish high-speed train sector to become more international. It won a contract from Saudi Arabia to supply 70 traction heads and bogies and supply maintenance for 12 years for the Mecca-Medina high-speed rail project. Rengifo says the project is going very well. "We are meeting our deadlines right on time. In December we handed over the converters to [consortium partner] Talgo. There have been delays but those have been on civil work that depends on another consortium." Rengifo takes it for granted that Spain will deliver the first train at the end of this year as scheduled and rules out the sandy terrain being an obstacle. "We are developing trains that are totally waterproof and dustproof," he says.

Rengifo is also confident that the Spanish companies making up the consortium led by state railway operator Renfe can win the contract for the Río de Janeiro-São Paulo high-speed train contract. The Brazilian government delayed the tender last year because the format it was presented in was "hardly attractive" for possible bidders, according to Rengifo.

Bombardier has opted to join forces with Renfe on the Brazilian project rather than submitting a bid on its own. "We could have gone it alone but it was better to go with Renfe basically because it is the best high-speed train operator in the world, and Brazil is very interested in it taking part in and being the leader of the project," the company chairman says.

Bombardier is also gearing up for a recovery in the Spanish market, which Rengifo believes could emerge within two to three years. One of the company's priorities is to be in a position to take part in the liberalization of the rail passenger transport market, which is of particular interest given Bombardier's experience. "We have been players in other railway liberalization processes in Japan, Germany, Britain and Sweden, in which in addition to selling equipment and providing maintenance, we have also taken part as operators with other partners."

We could have gone it alone but it was better to go with Renfe basically because it is the best high-speed train operator in the world"

Nothing has been decided yet on liberalization in Spain, but the company is already in talks with possible partners, with a number of options on the table. Among others, Bombardier is interested in establishing an alliance with an airline company to transport passengers by train to big airport hubs such as Madrid-Barajas - along the lines of Lufthansa's arrangement in Germany. "We've spoken to a number of companies, for example Iberia, with a view to having a high-speed connection to the T4 terminal at Barajas," Rengifo says. Bombardier is already a partner in this type of concessions in London, South Africa and Canada.

The company is confident that its Zefiro high-speed train, the traction for which is made by Trápaga and which has already been sold to Italian operator Trenintalia, will one day also run in Spain. "It's a more modern model than the Pato [the Talgo train that uses Bombardier traction], that is used in Spain and has been sold to Saudi Arabia. It is driven by traction heads, whereas in the Zefiro the propulsion is distributed along the length of the train," Rengifo explains.

The Bombardier chief is also confident of a revival in the Spanish market "because of the need over the next few years to replace part of the equipment currently in circulation" on long-speed, subway and suburban lines. The company has sold dozens of trams, including 14 to Alicante and 30 to Valencia and believes this form of transport is on the way back. "The tram will make a comeback and will be even better than before because it is one of the most efficient forms of public transport," Rengifo says.

And then there is the other side of Bombardier's business: planes. Already a global leader in executive jets such as the Learjet and Challenger, Bombardier is also looking to be one of the top three manufacturers of medium-range commercial planes. The company is already in the executive jet market in Spain with a share of 25 percent and has sold 60 CRJs to carrier Air Nostrum. It has also sold 34 of its famous amphibious fire-fighting aircraft in Spain and is looking for clients for its new C Series aircraft. "The idea is for carriers such as Iberia, Vueling and Air Europa to acquire these planes, which carry between 120 and 160 passengers."

Although 2014 will not be a good year for the company as economic cycles take longer to reach the transport equipment industry, Bombardier España is very optimistic about the future. "We're in good shape. Despite the crisis, we have shown that we have the most profitable production and engineering centers of the group with very competitive costs. When the Spanish market takes off, we have a lot of options in terms of increasing business," Rengifo concludes.

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