Apr 22, 2016 — One of the North Country’s major employers has found itself in a bitter, international trade dispute.

Bombardier, a Canadian company with a factory in Plattsburgh, expected to win a major contract to build more than 800 new rail cars for the city of Chicago. But the deal fell through last month and now Bombardier says the bidding process was “rigged.”

A few years ago, Chicago officials said they were looking for a manufacturer to replace half the city’s fleet of public transit rail cars. It’s a dream job for Bombardier and its workers. The project is worth more than $1 billion and would help secure about 500 jobs at the company’s factories here in Plattsburgh and Pittsburgh.

“The bidders were Bombardier Transit Corporation and CSR Sifang America JV,” said Ellen McCormack of the Chicago Transit Authority at the agency’s board meeting last month. Board member Terry Peterson asked McCormack about Bombardier’s only competitor, a China-based company with little experience in the United States, “Anything in North America?” “No - they have done, they just signed a contract with Boston last year,” McCormack said.  

Bombardier, headquartered in Montreal, has been in Canada and the United States for decades, and has worked with Chicago in the past. The bidding rules for this project said applicants needed to have experience in North American cities. So Bombardier thought it had this one in the bag.

But the Chinese company’s proposal was about $230 million cheaper. They also offered something else: a brand new manufacturing plant to build the rail cars right in Chicago. That was a big selling point at last month’s meeting.

“It’s expected to be located on the south side of Chicago, approximately 135^th and Torrence,” McCormack said. “It’s going to be a final assembly facility and they’ve committed to creating 169 jobs.”

Board members then voted to give CSR Sifang the contract and Bombardier was blindsided.

Neither company would go on tape for this story, but speaking with reporters later that day, Chicago Mayor Rahm Emanuel celebrated the news as a win-win for the city. “It’s one thing to order new cars, and the customers will get a great experience. It’s another thing to order those cars and create good manufacturing jobs here in the city of Chicago and bring back rail car manufacturing,” Emanuel said in a broadcast on ABC Chicago news.  

Bombardier is now scrambling to put the brakes on that plan.

In a 50-page protest filed with the Chicago Transit Authority last week, the Canadian company accused Mayor Emanuel of improperly working behind the scenes to skew the bidding process. Bombardier officials said the mayor took a special trip to China to do that lobbying. He revealed his influence by announcing the contract a few days before it was approved, the company said.

Bombardier also said Chicago officials violated state and federal laws by giving preference to a company that promised to build a new factory in Chicago, using a project funded with federal tax dollars.

Mayor Emanuel’s office didn’t respond to repeated requests for comment.

The Chicago Transit Authority is investigating Bombardier’s claims. But in an email sent to North Country Public Radio, a spokesperson wrote, “CTA is confident that all of the procurement processes and applicable laws were followed properly.”

At least one expert is on Chicago’s side. Robert Puentes heads the Eno Center for Transportation, a non-partisan policy group in Washington, D.C. He said it’s not always illegal to use federal funds to create local jobs. “What the city of Chicago is trying to do in leveraging this money, is perfectly appropriate,” he said. “I think it makes a lot of sense for cities and metropolitan areas to leverage enormous amounts of public spending to deliver multiple benefits.”

Bombardier disagrees. If the transit authority rejects Bombardier’s protest, the company will likely appeal with the Federal Department of Transportation. Meanwhile, Bombardier said no workers will be laid off as a result of the dispute. Its factories are currently working on major orders for New York City and San Francisco. 

Correction — An earlier version of this story inaccurately stated that Bombardier is working to enlist help from U.S. Senator Chuck Schumer and other lawmakers. The company is keeping lawmakers informed of the situation, but not necessarily asking for an intervention in Chicago.