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TTC: Flexity Streetcars Testing & Delivery (Bombardier)

dowlingm said:
I never bought the economy of scale argument back when Miller made it, ehlow. It meant the uptown dog was wagged by the downtown tail, which was an RFP so restrictive that virtually every other tram maker in the world (apart from Trampower, haha) said "no thanks". If the downtown RFP had been for a 70% low floor car we could be a lot further along than we are given the delay the first time round with the derailment simulation failure.

Compared to even European light rail systems, 204 cars is a huge order, and that could be 264 if Byford gets his way. Even then, some aspects of the cars are not interchangeable. Finally, as Metrolinx will own the uptown cars there will be limits to how much parts pooling could and would happen.

The upside to Alstom would be a mature platform - more than 1500 delivered - which is already being Canadianised for Ottawa who gets worse weather than we do. There would likely be a lower CanContent because that wasn't insisted on to the same extent in Ottawa's RFP which was for a complete build rather than separating out vehicles, but 100+ cars would be a good incentive to improve on what is being done for the 34 Ottawa cars. But politically I can't see it happening. Bombardier's federal and provincial bodyguards would freak out since the company is already bleeding profusely due to C Series.
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I think you have to be careful when commenting on a public company to not make false or misleading statements. You may have your own personal definition of the words I have bolded but in financial terms when a company is described as "bleeding" it suggests the company is losing money and has no cash. Neither statement is true.

Bombardier remains profitable, continues to pay dividends to shareholders and is sitting (as at the end of its last reporting period) on about $2B of cash. Yes it is true that it has made a major bet on the C Series and time will tell if this is/was a wise move...but the over $4B it has invested in the C Series has largely come from cash on hand and cash flow from the business.....they remain a profitable, dividend paying company with cash resources on hand.

The share price is off from 2011 highs of around $8/share....not totally surprising as markets hate uncertainty and that really is what the C-Series represents at the minute....but it is interesting that (according to First Call) of the 21 analysts who cover the stock 11 have it as a "buy" or "strong buy" (8-3 split there) 7 have it as a hold and only 3 have it as "underperform" and no one has it as a sell.
 
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dowlingm said:
There would likely be a lower CanContent because that wasn't insisted on to the same extent in Ottawa's RFP which was for a complete build rather than separating out vehicles
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AFAIK This is incorrect. The exact same 25% provincial CanCon requirement applies to both the Metrolinx-Bombardier order and the Ottawa-Alstom order. Technically, in strict commercial terms Ottawa has a contract with the Rideau Transit Group (of which Alstom is part-shareholder) which in turn has an internal subcontract to Alstom for the vehicles, but this is not a workaround on the provincial rules.

dowlingm said:
but 100+ cars would be a good incentive to improve on what is being done for the 34 Ottawa cars. But politically I can't see it happening. Bombardier's federal and provincial bodyguards would freak out since the company is already bleeding profusely due to C Series.
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Nonsense. The reason that taking Bombardier off and substituting Alstom is a non-starter is that the sunk costs and contract break fees would be staggering, the matter would have the government in litigation for years, it's highly unlikely that Alstom's promised timelines would be any better than Bombardier's promised timelines, and the only potential benefit to the taxpayers of Ontario seems to be that a bunch of Torontonians who are ticked off about late streetcars gets the brief pleasure of seeing Bombardier get a public kick in the ass.

Alstom's bid was built around doing 34 vehicles, not 234, and they can't just snap their fingers and scale up. One simple obstacle that springs to mind is that they found a cheap and clever way of hitting the 25% bar by using the eventual Ottawa MSF as a temporary assembly plant. But that assumes there's no period of time where LRV assembly and operations overlap --- once Ottawa's LRT is up and running in 2018, you can't very well be building Finch LRVs in there.

Sure, Bombardier's political influence is nothing to shrug at, but it has limits. The fact that one of their biggest international competitors won a job directly under their nose in the national capital of Bombardier's home country, with significant funding from a second level of government that's well-lobbied by them, proves that.
 
nfitz said:
The lowest technically compliant bid wins. Not necessarily the best.
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From the perspective of putting all our eggs in one basket this seems to not be the best move...it would be like contracting out all construction in the city to one company...

They should have gone with the two best bids for half of the vehicles...with any options being awardable to either of the companies based on a number of variables - who was delivering quicker, which vehicle was performing better.

This competition would have made it much harder for the union to strike, since they would be affecting their future employment if they got behind schedule.

It seems like we have multiple different types of busses, multiple types of subway cars, multiple types of streetcars...the risk tradeoff of having a sole supplier, and sole streetcar platform is risky for a lot of other reasons (imagine the maintenance issues if we had signed a contract to convert the entire fleet to hybrid busses...)
 
georgevicbell said:
From the perspective of putting all our eggs in one basket this seems to not be the best move...it would be like contracting out all construction in the city to one company...

They should have gone with the two best bids for half of the vehicles...with any options being awardable to either of the companies based on a number of variables - who was delivering quicker, which vehicle was performing better.

This competition would have made it much harder for the union to strike, since they would be affecting their future employment if they got behind schedule.

It seems like we have multiple different types of busses, multiple types of subway cars, multiple types of streetcars...the risk tradeoff of having a sole supplier, and sole streetcar platform is risky for a lot of other reasons (imagine the maintenance issues if we had signed a contract to convert the entire fleet to hybrid busses...)
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Of course, the converse of that is that having multiple manufacturers providing vehicles is that you need to stock almost twice as many spare parts, train the maintenance staff twice, train operating staff twice, etc.

Dan
Toronto, Ont.
 
Of course, the converse of that is that having multiple manufacturers providing vehicles is that you need to stock almost twice as many spare parts, train the maintenance staff twice, train operating staff twice, etc.
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Except that railroads all over North America and probably the world are operating equipment built by who knows how many suppliers but built to standard specifications that ensure compatibility.
 
smallspy said:
Of course, the converse of that is that having multiple manufacturers providing vehicles is that you need to stock almost twice as many spare parts, train the maintenance staff twice, train operating staff twice, etc.

Dan
Toronto, Ont.
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At some point the economies of scale max out (both on purchases and repairs). Not sure which modes of transit we are at the point (subways, busses, LRT, streetcars, etc). Once we reach that point having a second in-use competitor creates competition on future orders both based on quality and price. Say we had 2 LRT manufacturers. Based on the timing of the current deliveries the extra vehicles would not come from BBD but the other manufacturer...which meand BBD would want to fix the time delay as quickly as possible to get additional orders.

Right now it seems there is little incentive for BBD to fix the delivery problems (I don't know the financial penalties but I assume they are not steep)
 
mpd618 said:
That's not universal. Some jurisdictions accept the best-scoring bid that is within the budget; price is one of the scoring factors but not the only one.
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I've been suggesting that TTC use that for years. However that isn't what TTC uses, and that wasn't the process used to select the Flexitys.
 
muller877 said:
At some point the economies of scale max out (both on purchases and repairs). Not sure which modes of transit we are at the point (subways, busses, LRT, streetcars, etc). Once we reach that point having a second in-use competitor creates competition on future orders both based on quality and price. Say we had 2 LRT manufacturers. Based on the timing of the current deliveries the extra vehicles would not come from BBD but the other manufacturer...which meand BBD would want to fix the time delay as quickly as possible to get additional orders.

Right now it seems there is little incentive for BBD to fix the delivery problems (I don't know the financial penalties but I assume they are not steep)
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I'd also imagine that having multiple suppliers, with separate supply chains would have benefits with regards to protecting against currency fluctuations, material costs and labour shortages (or disruptions).

Given the change in the Canadian dollar I wonder how much profit is being lost or gained on this order...the dollar was about par with USD when the contract was signed...would there be some sort of current costs factored into the contract? Maybe they are just holding out for a better exchange rate?
 
I have a hard time believing that the reason Bombardier is having issues is related to not having enough negative incentive to get them delivered. I would expect that Bombardier is rushing to resolve these issues but they are not things they are able to resolve immediately. Once resolved they will be able to push them out very quickly. No need for the torches and pitchforks yet.
 
EnviroTO - as I said upthread, I don't really see a change in supplier happening but given the cancellation penalties looming for SRT replacement cars (and perhaps Sheppard/Finch) the City can use every bit of leverage over Bombardier it can get, as the stick in concern with the carrot being the possibility of 60 extra downtown cars to take some of the slots which nobody other than Bombardier is going to build, plus the T1 replacement process down the road. I am concerned about Waterloo though - given the negativity in Brampton and some elements in Mississauga, plus Hamilton's scepticism, light rail could use an on-time rollout there.

Platform 27 - while I don't think it would be simple to ramp up production, the reality is that the assembly facility will be built and I can't imagine Alstom are solely relying on Ottawa and its 34 cars to justify constructing it. Surely there is some hope that even minor orders like Hamilton or Mississauga might fall from Thunder Bay's table, in addition to follow up work in Ottawa itself.
 
dowlingm said:
... while I don't think it would be simple to ramp up production, the reality is that the assembly facility will be built and I can't imagine Alstom are solely relying on Ottawa and its 34 cars to justify constructing it. Surely there is some hope that even minor orders like Hamilton or Mississauga might fall from Thunder Bay's table, in addition to follow up work in Ottawa itself.
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Ottawa is using the maintenance facility to assemble vehicles. Once assembly is complete, it's the maintenance facility. I don't think there's any plans to utilize it as an Alstom assembly facility - particularly as Alstom won't own the facility.
 
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