Bombardier admits it may miss 2017 TTC streetcar delivery target
Company has told the TTC it will be a ‘challenge’ to provide a total of 70 cars by the end of the year.
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The TTC’s much-delayed streetcar order could be headed for another setback.
After months of assurances from Bombardier that the company was on track to meet its latest delivery targets, the Quebec-based rail manufacturer warned the transit agency this week that it will be a “challenge” to supply 70 cars by the end of 2017 as scheduled.
TTC CEO Andy Byford revealed the latest snag with the $1-billion vehicle purchase at a meeting of the agency’s board on Wednesday, where commissioners also voted to seek out other potential suppliers for future streetcar orders.
“They (Bombardier) have said to me that the 70 by year-end is still possible, but it’s at risk and that it’s increasingly challenging,” said Byford, who discussed the order Tuesday with Bombardier’s president of transportation for the Americas, Benoît Brossoit.
“They have not ruled out that 70, I am not letting them off the hook for that 70, but they have flagged that there is a risk that we may fall a few vehicles short.”
Byford said the TTC won’t know “for another couple of months” whether the company will miss the deadline.
As of this week the TTC has 40 of the new streetcars on its property. Under a timetable the two sides agreed to in 2012, the agency was supposed to have about 130 by now. Some of the vehicles that have arrived are experiencing reliability issues, mainly related to their doors.
A Bombardier spokesperson confirmed that the company told the TTC that the latest delivery schedule could slip, but he said the corporation made the disclosure of out a desire to be transparent and he described the potential delay as a “very limited, short-term issue.”
“This does not mean Bombardier will not reach its target for 2017,” wrote Marc-André Lefebvre in an email.
“We are still fully on track to deliver the entire fleet of 204 streetcars by the original contract deadline of 2019.”
Lefebvre said that the company is “deploying extraordinary resources” to meet the year-end goal. Measures the company has taken include extending the work week at its Thunder Bay plant from five to seven days, and adding resources at its other production facilities in Mexico and Europe.
Bombardier has also chartered a large Antonov cargo plane to ship streetcar cabs from Vienna, Austria, instead of sending them by sea. Lefebvre said that the flights cost $750,000 and will save the company a month on shipping time. All additional investments being put into streetcar production will be borne by Bombardier, he stated.
“All cards are on the table. No stone will be left unturned,” Lefebvre said.
Deputy mayor Denzil Minnan-Wong, who sits on the TTC board, did not appear convinced by Bombardier’s assurances.
“I’m a little bit disappointed that this word ‘challenging’ is used,” he told reporters after the meeting.
“Given their past performance, I think they may be getting ready to give us more bad news about the delivery of streetcars, because we’ve received a lot of bad news in the past.”
Minnan-Wong moved a motion at the meeting to conduct a “market sounding” exercise to seek out other potential streetcar suppliers. The motion, which Minnan-Wong drafted before learning about the latest potential delay, passed unanimously, which the deputy mayor said reflected the agency’s “frustration” with Bombardier.
The TTC has conceded that it is effectively locked into the current Bombardier contract for 204 vehicles, but the agency says it will eventually need an additional 60 cars to meet ridership demand.
The TTC ordered the accessible, low-floor streetcars from Bombardier in 2009 to replace its aging fleet, but Bombardier has failed to meet deadlines and repeatedly revised delivery schedules downwards. The company is currently on its fifth schedule since the order was signed.
The delays to the order prompted the TTC to sue the company in 2015 for liquidated damages. Under the terms of the contract the agency can seek up to $50 million for late delivery.
A Star investigation published in May documented a litany of production problems that have plagued the order, including poor workmanship, design failures, and persistent difficulties the company has had in managing its global supply chain.
Bombardier’s inability to meet even lowered delivery targets despite executives’ public and private assurances contributed to the near complete breakdown in the TTC’s relationship with the company last year. It was only partially restored when Bombardier replaced its head of its Americas transportation division in April 2016.
Around the same time Bombardier launched a “get well plan” aimed at improving production, and it was able to meet the revised schedule of supplying 30 cars by the end of 2016.
It has also met delivery targets for the first six months of this year, but the most vehicles it has delivered in a single month was in May, when it supplied three.
To meet the 70-car target, the company would have to manufacture a total of 40 cars this year, and the schedule calls for a production rate of at least seven cars in each of the last three months of 2017. In the three years since production began, Bombardier has never achieved a production rate that high.
An even more challenging task awaits the company next year. In order to keep the latest schedule on track, Bombardier would have to produce an average of 6.3 vehicles a month throughout 2018, for a total of 76 cars next year. That’s nearly double the number of vehicles it is struggling to supply in 2017.
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