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9/3/2009



Rail News: Rail Industry Trends

Locomotive production to plummet in 2010, GE says


Next year will be a bleak one for freight locomotive builders, according to GE Transportation.

The company expects locomotive production at its Erie, Pa., manufacturing plant to drop about 44 percent this year to 485 units, then fall another 50 percent or more in 2010 as the builder primarily works off its order backlog, GE Transportation officials recently told Dow Jones Newswire.

"There are no [U.S.] customers who are actively purchasing right now," said GE Transportation President and Chief Executive Officer Lorenzo Simonelli. "North America, from the standpoint of purchasing locomotives, is not moving."

Several Class Is have begun to bring stored locomotives back into service. Although that’s a positive trend, it won’t impact new orders until no locomotives are in storage, said Simonelli.

In addition, freight volumes “going from negative 20 percent to negative 16 percent don't do much for a manufacturer," he said.
 
Despite the near-term economic environment, GE Transportation is optimistic about the long-term transportation sector and rail industry because of global transportation infrastructure needs and rail’s standing as one of the most fuel-efficient modes, said Simonelli.


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