DJC Oregon: United Streetcar contracts trickle down in Portland

by Sam Bennett, DJC Oregon June 24, 2009

Just when Lori Luchak and Miles Fiberglass needed a lift, United Streetcar arrived.

The recession and Oregon’s ailing recreational vehicle industry had punched a hole in Miles Fiberglass’ revenue stream, causing the company to lay off 35 people.

But the Southeast Portland manufacturer’s new contract with United Streetcar led Luchak, Miles Fiberglass’ president, to rehire 10 of the workers. Now, she is optimistic that her company can bounce back in dire economic times.

United Streetcar of Clackamas recently won a $26 million contract to build seven streetcars for the city of Tucson, Ariz., with an option to build six more. The company also will build six streetcars for Metro to be used in Portland.

The contracts represent a new business track for Oregon Iron Works, which is the parent company of United Streetcar. But the potentially long-term revenue stream also could help a chain of local suppliers survive the recession.

Miles Fiberglass took a big hit in recent years, when the local RV industry suffered weak sales amid rising fuel costs. Nearly half of Miles Fiberglass’ sales were to the RV industry, and when that dropped off, it spelled trouble for Miles Fiberglass, Luchak said.

“The streetcar came at a good time for us and helped pick up the slack with the RVs,” Luchak said. She estimated that the streetcar work, which includes making front and rear shell pieces for the streetcars, will make up about 30 percent of the losses experienced after losing RV contracts.

At Northwest Technologies in Estacada, a contract from United Streetcar won’t make up for the heavy losses caused by the recession. However, according to the company president, Eric Sale, the new work will prevent him from laying off employees.

“We are certainly hit by the recession,” said Sale, who noted that the streetcar contract lessens the impact of the economic downturn. “Every bit of work out there becomes really critical.”

Northwest Technologies will be providing brackets and mounts that will help attach panels made by Miles Fiberglass to the streetcars. In addition to helping his company survive hard times, the United Streetcar contract will “bring companies together to work on a common project,” Sale said. “For (economic) health down the road, that’s going to be monumental.”

Other local companies that will benefit by supplying materials to United Streetcar are Columbia Body Manufacturing and Platt Electric Supply.

The streetcars will be made from about 70 percent U.S. parts, according to Chandra Brown, vice president of Oregon Iron Works. Wheel sets with gear boxes will come from Penn Machine Co. in Johnstown, Pa.; seats will be made by Recaro of Auburn Hills, Mich.; and Milwaukee Composites will supply floor material. The propulsion system – one of the most complicated systems in the streetcar – is made by the Czechoslovakian company Skoda.

Brown said the U.S. does not have a company that makes the specialized propulsion systems, although she said it’s likely that U.S. companies have the technology to do so.

The United Streetcar contract for composite floors from Milwaukee Composites represents the only work that Milwaukee Composites does for a U.S.-based light rail or streetcar company, according to Ryan Kober, sales manager with Milwaukee Composites. Kober said the United Streetcar contract will be a small fraction of the company’s $8 million in annual sales but it forms an alliance with a company that has growth potential.

“Every job is important,” said Kober. “We’re a transportation-focused business now.”
United Streetcar is Oregon Iron Works’ first attempt at producing streetcars.

Luchak said her company forged a relationship with Oregon Iron Works 10 years ago, when Miles Fiberglass provided materials for an Atlantis submarine.

Whether the new streetcar work will last until the economy turns around is still unknown, Luchak said. “It’s a bridge until when we can get the RV work back,” she said. The company is also providing blade repair technicians to Vestas Americas.

She said she thinks the alliance with United Streetcar will last for “decades.”

“We would like to grow right along with them,” she said.

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