Rail cars 2 years delayed, T chief heads to S. Korea

The MBTA’s acting general manager will fly to Seoul this weekend to grill executives of a South Korean company that has fallen about two years behind on a $190 million contract to build badly needed commuter rail coaches for the T.

Hyundai Rotem by now was supposed to have delivered nearly all of the 75 double-decker rail cars the MBTA ordered in 2008, with the last ones arriving next month. Instead, the company has missed a slew of deadlines and has yet to finish even the first cars, while T customers must continue to rely on cramped, single-decker coaches from the 1980s.

“We’re very concerned that we don’t have a production schedule that they can commit to and deliver the product,” said Jonathan R. Davis, acting general manager of the Massachusetts Bay Transportation Authority.


Davis’s trip is meant to underscore the MBTA’s need for the passenger cars and its desire for Hyundai Rotem to live up to the terms of the contract, he said. T officials want the company not just to avoid falling further behind but to accelerate production without compromising quality.

Get Fast Forward in your inbox:
Forget yesterday's news. Get what you need today in this early-morning email.
Thank you for signing up! Sign up for more newsletters here

Joined by a member of the MBTA’s technical engineering staff, Davis will meet Monday in Seoul with Hyundai Rotem’s president and chief executive, Min Ho Lee, and other executives. They will travel to Changwon, a city about 180 miles to the south, to inspect the company’s production facility midweek and wrap up with more meetings in Seoul on Thursday.

The state’s top transportation officials called Lee to Boston in June for questioning before the MBTA and Department of Transportation’s board of directors, threatening to go so far as to terminate the contract and sue the company — moves that would potentially cost the MBTA more money and push the clock back years, forcing a new start with another manufacturer.

A contrite Lee said the company would invest its resources to speed work in Korea, where the coaches are designed and the shells are fabricated, and in Philadelphia, where the company built a plant to perform final assembly for US orders. He also said the firm would create performance metrics that would allow the T to track progress more closely.

This trip, Davis said, will serve as a check-up on those commitments and allow the T’s leader to have what he termed a more “frank discussion” with Hyundai Rotem than could be conducted by phone or through the project-management consultants the T already has stationed in Korea.


A US official for the company said Hyundai Rotem welcomes Davis’s visit and is already making up lost time, calling the delays “a thing of the past.”

“In every program, bugs need to be worked out and certain items need to be rethought or redone, and we’ve worked through those and now we’re on track and on our way to having a schedule and sticking to it,” said Andy Hyer, a Philadelphia-based business and marketing development manager for Hyundai Rotem.

The company says it has nearly finished the first four “pilot coaches,” the initial production vehicles that follow the prototypes and that will actually go into passenger service — but they will receive rigorous testing first to ensure that the assembly-line coaches that follow meet all requirements.

Those pilot coaches were supposed to be turned over to the T in October 2010, a deadline eventually pushed back to August 2011, April 2012, and then July 2012, also missed.

The MBTA drew headlines in 2008 for gambling on Hyundai Rotem over an established competitor even though the Korean company had yet to open an assembly plant in the United States — a federal “Buy America” requirement — or navigate the stricter US safety requirements and regulations that have bedeviled other overseas manufacturers trying to enter the US rail market.


As it became clear the company could not deliver as promised, the T and Hyundai Rotem negotiated a settlement that pushed back the timetable by about a year, deadlines that have since been ignored. The settlement also doubled the maximum amount of damages the MBTA can impose — in the form of withheld final payments — for contractual problems to $19 million.

‘We’re very concerned that we don’t have a production schedule that they can commit to and deliver the product.’

The estimated $4,000 cost of this trip may come from that pool. The federal government is expected to reimburse 80 percent of the total cost of the coaches, Davis said.

Eric Moskowitz can be reached at