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TheStreet Open House

Report: Midwest Firms Coupled To High-speed Rail

By JASON KEYSER

CHICAGO (AP) â¿¿ Hundreds of Midwest manufacturers stand to benefit from a web of high-speed passenger rail routes emerging from Chicago's rail hub, according to a report released by an environmental policy group that has fought to defend the use of billions in taxpayer money on such projects.

The report released Friday by the Chicago-based Environmental Law & Policy Center found that 460 manufacturers in seven Midwest states are poised to reap new business, along with a dozen more highly visible companies that make rail cars and locomotives. Those additional supply-chain manufacturers make everything from seats, couplers and bolts to ceiling panels, interior lighting and air horns. They also cut sheet metal, provide electronics and communications equipment, and supply track maintenance machinery.

"What we're seeing is that old-line Rust Belt manufacturers are making the equipment for modern new rail cars," the group's director, Howard Learner, told The Associated Press. He said the "extraordinary" number of companies they found in the supply chain was nearly double what he expected.

"It shows that the federal investment in high-speed rail modernization is good for manufacturing jobs, good for economic growth and good for the environment," Learner said.

Critics of the high-speed rail projects set in motion by President Barack Obama in 2009 with the help of $8 billion in stimulus money say they are expensive boondoggles. Opponents and skeptics include members of Congress, governors, policy experts and even some in the rail industry who doubt any of the planned routes will become profitable, especially given the political pressure to keep fares low. As a result, they argue, taxpayers will be on the hook for years to help provide subsidies to keep the projects up and running.

Kristina Rasmussen, vice president of the Illinois Policy Institute, rejected the notion that the new report provided evidence that the high-speed rail program would ever be a genuine and sustainable driver of economic growth. She said the businesses named were merely benefiting from what she called the government's shifting of taxpayer money from one industry to another.

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