GE, China's CSR to Invest $50 Million in U.S. High-Speed Railway Venture

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, potentially 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.

Alstom, Bombardier

Alstom signed a long-term cooperation agreement today with China’s railway ministry to develop infrastructure “on a wide spectrum” with unidentified Chinese partners including rolling stock, high-speed trains, locomotives and signaling.

Bombardier and the ministry agreed yesterday to develop train cars and signals for use inside and outside China. 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.

GE and CSR also signed a separate venture to cooperate on technologies including diesel-based locomotive development and software developed by the GE unit, called Trip Optimizer, for the Chinese market.

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.

To contact the reporter on this story: Rachel Layne in Boston at rlayne@bloomberg.net.

To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net.

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