By Kay Nolan
For WisBusiness.com
GOP guv candidate Scott Walker Wednesday accused his top Dem rival and Dem Gov. Jim Doyle of deliberately steering the manufacture of train cars by Talgo of Spain to a city-owned site, while snubbing an existing train manufacturer that had been bidding on the contract.
Super Steel Products Corp. Chairman Fred Luber, a Walker backer and longtime GOP donor, and Super Steel President Jim Schmelzer said today they were blindsided by Talgo’s decision to manufacture the cars itself using an abandoned Tower Automotive plant in Milwaukee’s languishing west side industrial hub. The Super Steel executives insisted they were in negotiations with Talgo up until three or four days before Talgo’s March 2 announcement.
The next day, Super Steel filed for receivership, though Luber said the move was not caused by the loss of the Talgo contract and the company would remain in operations after restructuring.
“We have not only the physical facilities, we have the talent,” said Luber, who held a press conference at Super Steel’s headquarters on Milwaukee’s far northwest side.
“At 84 years old, I never thought I’d live long enough to have the city take business from us.”
Luber said his firm’s trains are used in major rail lines nationwide and that his company is definitely capable of meeting Talgo’s needs.
But Jeff Fleming, a spokesman for Milwaukee’s City Development Office, said Talgo had long ago ruled out the Super Steel site, and that it never intended to hire local workers to build their trains.(see note)
“They were only looking for space,” said Fleming. “They (Super Steel) were only offering space to Talgo.”
Fleming said the city had “aggressively supported” Super Steel’s bid, pointing to a letter Mayor Tom Barrett wrote on July 21, 2009, to state Commerce Secretary Dick Leinenkugel that stated, “I can assure you that I will do everything possible to help bring the Talgo assembly operation to the Super Steel facilities.”
But Walker said the city ended up making a deal with Talgo for the Tower Automotive site with which private businesses, including other bidders in Janesville and Appleton, couldn’t compete. The city, he said, offered abatement on property taxes on the facility for one year, full payment of worker training and money to upgrade the facility for Talgo.
Wisconsin Gov. Jim Doyle had announced last July that the state would buy two, 14-car trains from Talgo for $47 million.
Walker said the taxpayer dollars used to win Talgo came from people including workers at Super Steel.
“To us, that’s like a double whammy,” he said.
The Barrett Campaign charged the attacks were “shameless” and “hypocritical.”
“Scott is upset his big campaign donor didn’t get the contract, yet he didn’t lift a finger to help Super Steel; he says he supports the M7 regional economic growth effort, yet trashes one of its great successes,” Barrett spokesman Phil Walzak said in a statement. “Scott says he’s for jobs, yet attacks the Talgo investment that will create hundreds of jobs in Wisconsin.”
EDITOR’S NOTE: After this story was published, Jeff Fleming offered this clarification of his comments:
To clarify any miscommunication, Talgo has committed to hire local, Milwaukee-area workers to assemble and maintain high-speed trains at its Wisconsin facility. The company anticipates the only employees, if any, from Spain will be in high-level, supervisory positions. The production workers will all be hired locally. Talgo expects to employ 125 people at the Milwaukee building it is leasing.
