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In Springfield, relief that Chinese rail car plant will survive

New Orange Line cars on the production floor of the factory. A rolling out ceremony was held at the Chinese manufacturer CRRC MA in Springfield in December 2018.
New Orange Line cars on the production floor of the factory. A rolling out ceremony was held at the Chinese manufacturer CRRC MA in Springfield in December 2018.Lane Turner/Globe Staff/File/Globe Staff

SPRINGFIELD — This city has long sought to recover the jobs it lost during its 20th century industrial decline, and in recent years it began to make some headway — attracting big new employers, including the plant making Red and Orange line cars for the MBTA.

But city leaders have been watching nervously in recent weeks as Congress considered restrictions on the plant’s owner, CRRC Corp., which is backed by the Chinese government and has been at the center of debates over global trade and national security.

An early proposal could have eventually shut the factory down. A compromise measure approved by the US House last week would place limits on CRRC’s ability to bid on contracts with new clients and could eventually limit its US market to transit systems in Boston, Philadelphia, and Los Angeles.

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In Springfield, given the alternative of losing a promising new employer entirely, that sounds like a good deal.

“They would have had to close down,” Mayor Domenic J. Sarno said in an interview in his office, where models of CRRC trains in China and Brazil sit on his desk amid stacks of papers and souvenirs from city events. “Now, we’re on the field, and we’re able to play and compete, and you go from there.”

CRRC has had in its corner Representative Richard Neal, the former Springfield mayor who now chairs the powerful House Ways and Means Committee.

Though the measure — part of the $738 billion National Defense Authorization Act — still needs to clear a Senate vote, President Trump has said he’d sign it. Neal believes his change leaves CRRC, and Springfield, in a much better position.

“It keeps this facility going. It keeps the people working. It keeps them in a position where they can secure additional work,” he said.

The company said in a statement that the House measure “has preserved our ability to compete for all vehicle procurement bids at transit agencies across the U.S. – which means jobs. American jobs. Unionized jobs.”

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In East Springfield, where CRRC employs about 200 on the once-abandoned site of a former Westinghouse plant, people have felt relieved in the days since the House compromise was announced.

“It’s been great for the neighborhood,” said Kathleen Brown, president of the East Springfield Neighborhood Council. “From a neighborhood perspective, they’ve only been an asset.”

She said the factory site had long been a blight at the center of the neighborhood. Contaminated by its past industrial use, it was in need of a major turnaround.

The CRRC factory, with its state-of-the-art manufacturing facility fronted by office space in a brick building that was part of the Westinghouse factory, has certainly been that.

It has also provided a needed boost for a community that never forgot its industrial heyday.

Springfield produced the first gas-powered automobile in the United States. It was the headquarters of a massive US armory that employed thousands. It had factories producing Indian Motorcycles and Rolls-Royce cars. In 1960, manufacturing accounted for 34 percent of employment in Springfield, according to US Census data. By 2007, the number was 12.5 percent.

On its own, the CRRC factory won’t reverse those declines. But for the people who work there, the factory has looked like a place to make a stable, good living.

Paul Gour, business agent with the International Brotherhood of Electrical Workers Local 7, which represents about 110 workers at the CRRC plant, said his members have been disturbed by the uncertainty.

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He said the recent construction of the massive MGM Springfield casino downtown provided a lot of good work. But with that project complete, members need long-term employment.

“They were scared,” he said. “They want to work here, and this is a career for them. They want to retire out of this place.”

CRRC’s close ties to the Chinese government have long provided fodder for opponents.

Here, as in other places where the company has sought contracts, it has aggressively undercut other bidders. In 2014, the Massachusetts Department of Transportation gave it a $566.6 million contract to supply 284 cars to the Massachusetts Bay Transportation Authority. The state later expanded the order.

But the state faced protests from competing companies. And activists criticized the decision to award state business to the company, given China’s human rights record.

As the company has expanded in recent years, and the US trade relationship with China has become more strained, the criticism has broadened.

With the company seeking business with the Washington, D.C., transit system recently, some opponents raised questions about whether such a deal could lead to national security threats.

The measure passed by the House bars CRRC from bidding on federally funded transit projects associated with the Washington Metropolitan Area Transit Authority. But Neal’s office said the measure would allow the company to continue to bid on new federally funded business with its existing customers. It would also be able to bid on new deals with most other agencies for two years.

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Michael A. Fenton, the Springfield city councilor who represents the area around the factory, said that leaves open a lot of possibilities that didn’t exist just a few years ago.

“When CRRC first came to town, there was no promise of any kind of contracts other than the initial MBTA contracts,” he said. “I understand that there are going to be some restrictions that were not there previously, but I’m thrilled that they’re not going to be crippling.”

Gus Ubaldi, an airport and railroad expert at the firm Robson Forensic, said the changes certainly won’t make it easier for the company to compete for contracts in a challenging industry. He noted that many rail car manufacturers have failed — there are none left in the United States — even without such limitations.

He said the fact that Congress has targeted CRRC once might also give prospective clients pause. “Are you going to buy a car from a manufacturer that’s going out of business?” he said.

Governor Charlie Baker said in an interview that the changes secured by Neal gave him confidence about the viability of CRRC.

“The legislation as it was originally contemplated would have meant that maintaining some sort of going concern would have been really hard to do, which would have made it hard for the company to hold onto its people, and its talent, and its intellectual property,” he said.

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He noted that Massachusetts didn’t use any federal money on the contract, so similar deals would not be covered by the federal restrictions.

The company will complete work on MBTA cars in 2023. It has already delivered several Orange Line cars, though they have been taken out of service twice because of mechanical concerns.

Neal said he hopes the flexibility gives CRRC time to adapt its business, and potentially explore bringing in some American business partners.

“If they want to take off some of this controversy because of the disagreements that we have over trade, then it strikes me that they should look for domestic partners,” he said.


Adam Vaccaro of the Globe staff contributed to this article. Andy Rosen can be reached at andrew.rosen@globe.com.