Kinkisharyo International has delivered its first Los Angeles rail car amid calls for the governor to step in and resolve a dispute that has threatened the opening of a company factory in the Antelope Valley.
Los Angeles County Metropolitan Transportation Authority, or Metro, took possession on Friday of the car that was assembled in Palmdale.
Kinkisharyo International President Teiji Tani said the delivery represents the company’s commitment to producing cars that are reliable and on time.
“We have forged a strong partnership with Metro, and we expect that this contract will further our reputation as the leading light rail vehicle manufacturer in America,” Tani said in a prepared statement.
Kinkisharyo, the El Segundo-based U.S. arm of Kinki Sharyo Co. Ltd. of Osaka, received a contract in 2012 from Metro for an order of 78 light rail cars, and options for an additional 97 cars. If options for another 60 cars are exercised by the Metro board the total contract with Kinkisharyo would be about $890 million.
The company is doing final assembly work on the cars in hangar space the company is leasing in Palmdale from Los Angeles World Airports.
The delivery came as Kinkisharyo backed off of plans to build a 400,000-square-foot manufacturing plant to produce the car shells citing opposition to the project from a labor-backed group, Antelope Valley Residents for Responsible Development.
In September, a South San Francisco law firm filed on behalf of the group an appeal of the site plan approval given by the Palmdale Planning Commission. The appeal by the residents group asserts that the project could cause widespread environmental damage. Central to the argument are 1993 and 1996 environmental impact reports on the property that the appeal calls “outdated.”
Mayor Jim Ledford and a representative for Kinkisharyo have said the they believe the underlying cause of the challenge was the result of the company not allowing the International Brotherhood of Electrical Workers Local No. 11 use card check at the new Palmdale plant, which would employ up to 250 workers.
Card check is a process by which a workplace can unionize if 50 percent or more of workers sign cards stating they want to be represented for collective bargaining. Typically, workplaces unionize by having employees vote.
Members of the local, based in Pasadena, are members of the residents group, which was only founded after Kinkisharyo sought to build its plant. An attorney for the group said the denial of card check did not figure into the decision to challenge the project.
On Monday, elected officials from Los Angeles County and Palmdale held a morning news conference in which they discussed the loss of the plant and the jobs it would have brought to the area. County Supervisor Michael Antonovich, who represents the Antelope Valley, called on Gov. Jerry Brown to step into the issue.
“What’s needed is a direct intervention by the Governor with his friends in labor as well as comprehensive reform of CEQA laws to prevent further abuses from sending prospective businesses to other states like Texas or Arizona,” Antonovich said in a prepared statement.
Madeline Janis, director of Jobs to Move America, a national coalition based in Los Angeles of labor, environmental, civil rights, and other groups advocating for good jobs in the transportation industry, said that Kinkisharyo and its politician supporters should not point fingers for its decision to not build the Palmdale plant.
“Los Angeles public officials ought to hold Kinkisharyo’s to its obligations to taxpayers, rather than blaming labor unions for the company’s failures,” Janis said in a prepared statement.
The advocacy group claims that Kinkisharyo is required to have at least 194 final assembly manufacturing jobs in Los Angeles County.
In a statement released on late Monday, Kinkisharyo spokesman Coby King said what the company has committed to is $72 million in new wages and benefits for the final assembly portion of the contract.
“While this equals approximately 194 jobs, Metro measures (Kinkisharyo’s) results on total wages and benefits, not specific job numbers,” said King, chief executive of High Point Strategies, a Los Angeles public affairs and media relations firm.
Kinkisharyo currently has about 163 employees in Los Angeles County, with 150 in Palmdale, King added.
Read the Business Journal's coverage of the issue in this week's story "End of the Line for Factory."