The United Streetcar Company was supposed to create 300 full-time jobs and bring millions of dollars into the Oregon economy. Based on these promises, the company’s parent, Oregon Iron Works, lobbied hard to get a $4 million federal grant to build its first streetcar, which was an almost exact copy of streetcars that Portland had purchased from the Czech Republic for $1.9 million apiece. The Oregon congressman who earmarked the grant for the company confidently predicted that it would sell a billion dollars worth of streetcars to American cities in the next twenty years.
United Streetcar received $4 million to build this prototype car. The car never worked very well and fixing it cost another $3 million. Wikipedia photo by Steve Morgan.
The state of Oregon then put up $20 million in lottery money, which Portland used to order six new streetcars. Various problems forced the company to more-or-less arbitrarily reduce the order to five streetcars for the same price. “You’re not getting less,” gushed the company president unapologetically, “I actually think you’re getting more.” She later took a job as Deputy Assistant Secretary of Commerce for manufacturing, proving once again that it’s not what you know, it’s who you know.
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Supposedly geared up to build 24 streetcars a year, United Street took several years to build 18, all of which were delivered late to Portland, Tucson, and Washington DC. Never having built a streetcar before, quality control was so poor that Portland ended up paying another engineering company a couple of million dollars overseeing United Streetcar’s work.
Based on its track record of delays and poor quality control, none of the other cities building streetcar lines placed any orders, and last year the company quietly closed its doors (or, to be precise, Oregon Iron Works put its assembly line to work building speed boats). Although its web site is still on line, United Streetcar didn’t pay its $100 annual filing fee with the Oregon Secretary of State in 2014, leading the state to dissolve the company.
A state report found that, instead of employing 300 people, during the three years it was actively manufacturing streetcars it employed 41 full-time equivalencies in 2011, 48 in 2012, and a whopping 59 in 2013. Unfortunately, it is doubtful that the politicians who thought up this idea will learn any lessons from it. We can only hope that they allow the company to rest in peace and not attempt to resurrect it.
Update: In another indictment against streetcars, the Oregonian reports that Portland’s streetcar has been involved in nearly one collision per week for the past several years. Data in the report and the National Transit Database indicate that Portland’s light rail has had fewer than seven collisions per million vehicle revenue miles, and Portland buses were involved in 24 collisions per million vehicle revenue miles, but the streetcars were involved in 155 collisions per million vehicle revenue miles. Since the streetcars and buses both carry, on average, about a dozen people, substitution of buses for streetcars could have provided just as good transit service at a much lower operating cost and less than one-sixth as many accidents.
Unfortunately, it is doubtful that the politicians who thought up this idea will learn any lessons from it. We can only hope that they allow the company to rest in peace and not attempt to resurrect it.
Well, with taxpayer money flowing into the crony troughs like sewage thru a sewer, no problem cannot be solved with the addition of extra funds into the gaping maws of the streetcar/light rail pork barrel constituency. After all, the same clueless voters who scream in fury when a enterprise zone company misses an employment number promise by 5 positions, are oddly silent when this crony “company” only meets 16% of its promised employment numbers.
Unfortunately this isn’t unique to transit nor Oregon. Minnesota’s IRRRB has a long history of making these sort of investments. The most infamous was when #mnLeg pitched in $$$$$$$$ to “save” Northwest Airlines ( NWA ). NWA in return was to open a bunch of things like maintenance facility in Duluth. It never came close to reaching those promised job numbers and never had to give back any of the money.
What we need is to have these supporters have skin in the game. For example, requiring politicians voting for the bill to put cash equivalent to half their assets in an escrow account. If the company doesn’t meet it’s promised bench marks, the escrow money is given the taxpayers.