Besieged rail firm planning another MBTA bid
Korean maker accepts blame on car delays, prepares to bid on $1b subway contract
SEOUL — Top executives at Hyundai Rotem say they accept responsibility for a 2½-year delay in delivering Massachusetts’ new MBTA commuter rail cars, but nonetheless plan to bid on a new multimillion dollar contract to build trains for the Red and Orange lines.
In their most extensive comments about the controversial train project, the executives outlined in blunt terms a culture clash — language barriers, legal formalities, and surprisingly strict federal regulations —
“From time to time I feel a little bit ‘What the hell am I doing here?’ kind of regret,” said Kevin J. Choi, the company’s director of marketing and project management for North and South America, during a lengthy interview at the Hyundai Motor Group headquarters, a gleaming high-rise overlooking Seoul.
But the company remains optimistic that the delays, and years of conflict with MBTA officials, will not have a long-term impact. In May, the T will accept bids for a new contract, which are likely to exceed $1 billion, to build train cars for the Red and Orange lines, and expects to award the contract by December.
For T riders, the new cars hold the promise of greater reliability on subway lines plagued with breakdowns and delays because of the aging fleet. But with Hyundai Rotem’s commuter rail cars maligned by local maintenance workers, doubts remain whether the company can provide the dependable equipment the T desperately needs.
Hyundai Rotem has been under fire for years in Massachusetts, first for not delivering the commuter rail trains on time and, more recently, for claims that the trains, once delivered, were faulty, including complaints about doors, air conditioning, brakes, and signal software. Rail union representatives have lodged complaints with the T, and officials at the Federal Railroad Administration have been monitoring the situation.
Hyundai Rotem officials said the problems are routine in new trains, and are being fixed.
“We don’t deny our late delivery to the T,” Choi said. “But I cannot agree that our delivered product has a problem in a quality issue.”
Choi said his company has worked to accommodate the T, but he says that some of the demands from MBTA officials make him wonder whether they are taking advantage of the company, blaming Hyundai Rotem for things that may not be its fault.
The MBTA’s chief financial officer, Jonathan R. Davis, bristled at Choi’s suggestion.
“I think we’ve been tough but fair as it relates to making sure we receive a quality car that met our standards, and the standards required in the contract,” Davis said in a separate interview.
Davis, who is managing the commuter rail project and meets with Choi every two to three months, said the T experienced significant problems dealing with Hyundai Rotem.
“It’s been a difficult procurement,” said Davis. “It has been a learning curve with them. But to give them their due, I think they have shown their willingness to change their practices, to be flexible, and to ensure that we got a product that we and our customers deserve.”
The commuter rail car contract has been controversial since 2008, when MBTA officials said Hyundai Rotem, the lowest bidder, would deliver good-quality trains on time even though the company had not yet opened an assembly plant in the United States.
Hyundai Rotem has extensive experience in South Korea — it builds the trains for the massive subway system in Seoul, one of the world’s largest — but has less experience in the United States, which turned out to be more challenging than expected, according to Choi.
“The mass transportation environment is totally different from here and in Boston,” Choi said. “It was a very difficult obstacle for us to overcome.”
Choi said his company underestimated the difficulty of building trains to meet US standards and the demands of the MBTA. There was more bureaucracy, more of a language and cultural barrier, and more legal work than the Korean company executives initially expected.
“Whenever we’re faced with a certain issue, you guys bring the lawyer first,” Choi said. “In Asian business practice, generally we try and make a resolution between two parties first. We had a bit of a struggle in that particular issue.”
Another factor in the delay, Hyundai executives said, was that parts that connected the bed of the trains with the wheels had to be built in Philadelphia, so Hyundai Rotem had to hire local workers and train them.
“We couldn’t find good welders,” said S.H. Jun, the chief project manager. “After making sure the truck is safe, we did qualification tests but it failed. We have to start again from the beginning; we have to train our welders again.”
Hyundai Rotem executives also said they struggled at times with the orders given by MBTA officials, and consultants working on the project.
As an illustration, they offered an anecdote involving the ability of female passengers to open the emergency windows in some cars — and a misunderstanding over what constitutes an “average” size American woman when it comes to hiring quality testers for the new cars. The first woman Hyundai Rotem recruited to test the window had no difficulty opening it, they said. But the T wanted to make sure that a more petite woman could also open the window — and that second woman could not get the window open, the company said.
Hyundai Rotem had to redo the emergency windows on some of the completed trains, which took about a month.
“Those minor things add up,” Choi added. “That is totally the issue of our being out of schedule for production.”
But Davis disputed Choi’s recollection, and said the issue was never about the size of the test subject.
In the end, the test led the MBTA to ask for a redesign of the emergency windows.
Another point of conflict has been the bathrooms on the coaches. Choi said passengers could be at fault for malfunctions, not Hyundai Rotem.
Because of the delays and defects, officials from the MBTA now frequently travel to Philadelphia to monitor progress on the rest of the T’s order. There are nine commuter rail cars remaining, which Choi said would be delivered to the MBTA by late April or early May.
Hyundai Rotem officials have also been begun shipping some of the commuter rail cars to a facility in Rhode Island that they expect to use for six to eight months to retrofit the cars with new parts.
Choi said that in addition to the new MBTA project, the company is also planning to bid on projects in North Carolina, Los Angeles, and Philadelphia. He said that after all the years of growing pains and conflict with officials at the MBTA, there is now a level of trust between the two institutions.
“I don’t think the T has any negative impression toward Hyundai — nowadays, I can say,” Choi said.
Davis declined to offer his thoughts on Hyundai Rotem’s plans to vie for another MBTA contract, saying it would be inappropriate for him to say whether the company’s past performance and delays would count against them in this round.
“We welcome all who feel they have the capability and expertise to build the car,” Davis said.
If Hyundai Rotem wins the bid to build cars for the Red and Orange lines, the company would have to build a new manufacturing facility in Massachusetts to assemble them – a requirement of the contract. Choi said he expects to be competing with at least three other international companies.
“I wouldn’t give up the US market,” Choi said. “And Boston, it is an honor for me to accommodate the most intelligent people in this planet, all the Bostonians.”