Bombardier looks to expand Riga production

  • 2010-09-01
  • Staff and wire reports

RIDING THE RAILS: RVR says it will create thousands of new jobs if it wins the Pasazieru vilciens tender.

RIGA - If Riga-based railroad car manufacturer Rigas vagonbuves rupnica (RVR) is selected to supply new trains for the passenger rail company Pasazieru vilciens, 4,000 to 5,000 new jobs will be created as a result, promises RVR board chairman Valerijs Igaunis in an interview with the magazine Kapitals, reports If the trains are manufactured by RVR, the company, which currently has a staff of 230, will need another 700 workers. But an even larger number of new jobs will be created in the associated business sectors.

“RVR will not manufacture everything itself. We will need partners who will supply, for instance, the benches, the finishing materials, the lighting fixtures, the flooring materials and much, much more,” said Igaunis. If RVR secures the order, and later has an opportunity to export its products to other countries, it will present an excellent growth opportunity for a number of medium-sized and small enterprises, he explained.
Igaunis does not rule out that eventually train engines could also be manufactured in Latvia. Talks are under way with the Canadian-French joint venture Bombardier Transportation, a company that RVR has teamed up with for the Pasazieru vilciens tender.

“Our estimates show that each person employed in mechanical engineering provides jobs for about seven people in other industries. Therefore this project could create 4,000 to 5,000 jobs altogether in sectors that are oriented toward exports,” said Igaunis, emphasizing the importance of the acquisition of new technology by RVR.
According to the chairman, overall, since RVR was established, the company has made around 20,000 electric trains and about 9,000 diesel trains.

Bombardier Transportation, one of the world’s leading transportation and aerospace constructors, said it was also interested in manufacturing trams in Riga. In addition to its joint tender offer with RVR, senior director for business and development, Flavio Canetti, said that the company is interested in other possible areas of expansion in Latvia, beyond train construction. “We are interested in producing trams in Riga. If there is a wish to replace the city’s tram rolling stock, we are ready to put forward our solutions,” indicated the businessman.

Bombardier is prepared to use manufacturing in Latvia as a bridgehead which would allow it to become a major force in the markets of Russia and other CIS countries. The company’s planned partnership in Latvia could eventually emulate its past successes in countries such as China, where its local partner now independently produces trains capable of speeds up to 380 kilometers an hour.

The company hopes that its potential partnership with RVR would allow it to supply modern trains to all former Soviet Union republics, thanks in part to the rail gauge common to all countries in the region.

In May, Igaunis, commenting on teaming up with a world leader in the transport industry, said “We realize that we would not be able to continue to exist with products from the last century. There are two ways to achieve the level of railroad car manufacturing needed in the European Union. The first is to struggle on our own. That is, to ourselves train engineers, produce new equipment and machinery, create entirely new railroad car designs, and the like. That is a rather long evolution, which will also require the state to put in some effort. For instance, in training… We have chosen another way. That is, we have developed cooperation with a Western European company that has proven itself, and this cooperation is beneficial for both sides.”

Bombardier operates in 60 countries. The company has managed, in a comparatively short period of two years, to develop an innovative product, sell to RVR train car manufacture licenses and production technology, and train the workers.
“Now we have people in Latvia who can produce the most up-to-date ‘AGC’ trains, using modern technology. With this cooperation model we will be able to begin manufacture of trains in the near future, but the most important is to supply these trains to the entire territory of the former Soviet Union, where the rail track width is the same as in Latvia. If we manage to do this, it will also improve foreign trade balance of the country,” said Igaunis.