Japan train firms take own paths for US billions - Forbes.com
Japan train firms take own paths for US billions
By JAY ALABASTER , 05.13.10, 06:56 AM EDT
TOKYO -- Japan's major train operators are taking different approaches as they pursue billions in high-speed train contracts in the U.S., reflected in their sales pitches to U.S. Transportation Secretary Ray LaHood during his recent visit.
Washington has awarded $8.5 billion to jump-start 13 regional high-speed rail projects, with $2.5 billion more to come this year and hundreds of billions needed before lines are up and running. The U.S. has almost no expertise of its own, and Japan sees a golden opportunity to export its technology and experience.
Japan boasts some of the most advanced trains in the world, running hundreds each day with average delays of less than minute, and a sterling safety record. Countries around the world are upgrading old lines to high-speed systems, but Tokyo has had little success at exporting its trains.
Now the major players here are taking different approaches in the U.S.
East Japan Railway Co., the country's largest train operator, is emphasizing systems that allow existing train lines and new high-speed lines to be used together, while Central Japan Railway Co. is pitching a complete system with cutting-edge technology. Japan's national railroad company was divided up by region and privatized in 1987.
On Wednesday, LaHood visited JR East's facilities in Tokyo, taking a short ride on a bullet train through a giant train washer, then stepping out onto a red carpet to a group of applauding employees at a depot. The company demonstrated its coupling technology that allows standard train cars to be used in a high-speed system.
Company executives plan to pursue business in California, where it appears that existing lines will be interspersed with high-speed tracks.
"Mr. LaHood talked about how the 'all-Japan' approach hasn't really worked until now, so we're going to try to be more proactive in sharing our expertise," said spokesman Koji Takano.
A day earlier, LaHood was given a ride on an advanced maglev that holds the world speed record for a passenger train. It is being designed by Japan's second-largest operator, Central Japan Railway, which runs the lucrative route between the country's two biggest cities, Tokyo and Osaka.
Magnetic levitation trains float along suspended by powerful magnets and can achieve greater speeds than traditional trains, but require completely new infrastructure to run. After decades of testing, the Japanese version has been approved by the government, but services aren't set to start until 2027.
JR Central plans to pitch the train for a Washington-Baltimore route, where U.S. planners are considering a completely new train system, according to company spokesman Katsumi Miyazawa.
There has been hopeful speculation in Japan that its close ties with Washington could provide an advantage against rivals like German conglomerate Siemens AG ( SI - news - people ) and Alstom SA of France, which have had far more success in selling abroad.
But LaHood, who traveled around Japan by bullet train during his stay, said that while he was impressed by Japan's technology and services, Tokyo will have to compete on an equal footing.
"Whether they be from Japan or Europe, they will have to come to America and make their case for the opportunities to partner," he said.
LaHood, who left for Hong Kong on Wednesday evening, repeatedly stressed that companies will have to team up with U.S. industry, work in the U.S., and hire U.S. workers. He said he met with his counterpart in Japan, Transport Minister Seiji Maehara, on Tuesday night and encouraged Japanese officials to come to the U.S., where individual regions will make the final call on what systems are employed.
"I have seen many innovative transportation opportunities and I am encouraging Japanese officials to come to America and see what opportunities there are to partner with Americans," he said.
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