Bombardier Transportation Integrates Engineering and Manufacturing in Mexico

Boasting of its Eco4 -- energy,efficiency, economy, ecology-approach, BombardierTransport continues to advance itsmanufacturing in Mexico, yet also setsights to markets beyond the country'sborders.

For Jean-François Cloutier, vicepresidentand business unit leaderMexico, Bombardier TransportationNorth America, oversees the activitiesin two plants in the state of Hidalgoand one in the state of Mexico. Theword "activities" may come up a bitshort; his bio lists the job as including"conception, design, manufacturing,assembly, testing, product introduction,quality, project management,maintenance and overhaul of railwaycars and subassemblies, as well as locomotivescomplete final assembly."Then comes "whatever else"

BOMBARDIER STATES IT HASTHE BROADEST PORTFOLIOIN RAIL HISTORY. FROM THATPORTFOLIO, WHAT BUSINESSSEGMENTS ARE ASSOCIATEDWITH BOMBARDIER TRANSPORTATIONIN MEXICO?

Bombardier is the world's onlymanufacturer of both planes andtrains. Looking far ahead while deliveringtoday, Bombardier is evolvingmobility worldwide by answering thecall for more efficient, sustainable andenjoyable transportation everywhere.

Our business unit of BombardierTransportation is a global leader inrail technology, offers the broadestportfolio in the rail industry and deliversinnovative products and servicesthat set new standards in sustainablemobility.

In Mexico, Bombardier Transportationspecializes in the manufactureand product introduction of passengerrail vehicles, as well as after-marketmaintenance and customer service.Throughout the years, this site has producedmetro cars, light rail vehicles,regional trains and locomotives, aswell as minor and major sub-assembliesfor North American projects.

Bombardier Transportation Mexicohas more than 20 years in the market,gaining important historical milestonesand capabilities that allow usto be the only rail company that canengineer and manufacture a vehicleand provide services in the Mexicanmarket.

BOMBARDIER TRANSPORTATIONALSO HAS MANUFACTURINGSITES IN MEXICO. WHEREARE THEY LOCATED AND WHATSTRATEGIC FACTORS DID BOMBARDIERCONSIDER IN MAKINGTHE LOCATION CHOICES?

Our main manufacturing site islocated in Ciudad Sahagun, Hidalgo,90 kilometers from Mexico City, andis one of the largest plants in the worldwith approximately 500,000 squaremeters.

Bombardier also operates a manufacturingsite in Tlanalapa and anotherin Huehuetoca, State of Mexico thatspecializes in the manufacture of electricharnesses.

In 1992, Bombardier acquiredConstructora Nacional de Carros deFerrocarril which had been founded in April 1952. For this acquisition,Bombardier took into considerationvarious elements, such as the facilityand its specialized labor in the railsector, which would contribute to deliveringhigh quality standards in railmanufacture; as well as the importanceof being close to our clients and thecompetitive costs.

Nowadays, Bombardier globalpresence requires also that we actlocally according to each market. InMexico we count with the best weldingschool in the company that hastrained more than 5,000 employeesthroughout more than 20 years of existence,giving our Mexican workersunique expertise in this area. We alsocount with the only harness center ofexpertise in North America, locatedin Huehuetoca.

For more than 20 years of presencein Mexico, we have developedour labor and increased its skills tothe best in the industry. We providewith one of the best working conditionsin the state of Hidalgo, which is often taken as a model within themanufacturing industry. This expertiseand skills allow us to offer the bestquality products.

WHAT ECONOMIES DO YOUGAIN FROM INTEGRATING ENGINEERINGAND MANUFACTURING?

Bombardier is the only rail manufacturerin Mexico to operate anadvanced facility with integrated engineeringand manufacturing capabilities.Quality-driven management andstate-of-the-art equipment help offerproducts and services that attain thehighest quality standards.

We gain important economiesby being able to offer competitivecosts and expand our reach in NorthAmerica. We are one of the mostimportant suppliers committed to deliveringquality sub-assemblies andcomponents. In fact, in the past fouryears, we have increased our internationalcontracts, among which areNew Jersey Multilevel, USA; Toronto,Canada; CTA Metro Car, ChicagoUSA; STM metro cars, Montreal,Canada and General assembly and Locomotivesfor Progress Rail Services,Alabama, USA; as well as metro forNYCT and BART.

Throughout more than 20 yearsin Mexico, Bombardier Transportationhas invested approximately$200,000,000 (USD), allowing us tocontribute to the industry's development.

TO WHAT EXTENT DO YOUSOURCE DIRECT MATERIALSFROM MEXICO? HOW EFFECTIVEIS MEXICO AS A SOURCE FORTHE MATERIALS AND COMPONENTSYOU NEED FOR BUILDINGRAIL CARS AND LOCOMOTIVES?

Bombardier is contributing to developingan industry that is attractinginvestment, developing the communityand advancing technology.

We have developed a strong localmanufacturing footprint, and assureda sustained and successful presence inthe Mexican rail industry, investing in footprint and developing a nationalindustry around it. We can offer morethan 50 percent of national content inour products.

We have an important supply ofmaterials from Mexico and we keepsupporting the development of Mexicansuppliers that meet the qualitystandards required for Bombardierworldwide.

WE SEE PASSENGER OR WHATMIGHT BE CONSIDERED "LIGHT"RAIL IN MEXICO CITY, GUADALAJARAAND MONTERREY. FOR WHATPORTION OF THOSE DID BOMBARDIERPROVIDE PRODUCT?

Bombardier has become the mostimportant supplier of passenger railtransportation equipment in the Mexicanmarket, with almost 70 percent ofthe rolling stock and transportationsystems in operation today in Mexicomanufactured at its local facilities:

• 100 percent of the fleet of ElectricTransport in Mexico City
• 74 percent of the fleet of UrbanTransit System, Monterrey(Metrorrey)
• 100 percent of the fleet of ElectricTrain System Urban, Guadalajara(SITEUR)

Just recently, at the end of 2012 wewere assigned the contract from theElectric Transport Services of MexicoCity (Servicio de Transportes Electricosdel Distrito Federal, STEDF)to deliver four articulated light railvehicles (LRVs). The vehicles willoperate on the 26 km TaxqueÑa-Xochimilco line.

Bombardier Transportation's facilityin Ciudad Sahagun, State ofHidalgo, will be responsible for leadingthe design and engineering of thenew LRVs, as well as manufacturingthe vehicles and putting them into service.The vehicles are scheduled to bedelivered by the end of 2014.

MEXICO'S NEW PRESIDENTPEÑA-NIETO HAS OUTLINEDKEY PROJECTS FOR HIS ADMINISTRATION.IT APPEARS RAILIS INCLUDED. WHAT OPPORTUNITIESDOES THAT OFFERTO BOMBARDIER TRANSPORTATIONIN MEXICO?

The announced products bring agreat opportunity to our manufacturingsites in Mexico and the industry wehave developed around them, creatingmore jobs and developing more localsuppliers. We would enhance our participationwith wider investment andcontribute to Mexico's development.

Bombardier Transportation Mexicohas an annual investment of $4 million(USD) on state of the art technology(laser machines, equipment) andwe are growing our local footprintwith our sites in Huehuetoca andTlanalapa.

We have the best skills and high expertiseto participate and collaborate in any railproject that would provide an opportunityto evolve mobility through passenger railtransportation, providing long-term publictransit solutions that would benefit Mexicofinancially, socially and economically.

We are featuring some of the newest,smartest mass transit technologies for fastgrowing urban areas. Delivering whatforward-looking cities, countries and operatorsneed today - sustainable interconnectedmobility that gets you where youneed to go, efficiently and comfortably. Wecount with the best-fit mobility solutionsthat overcome crippling traffic, restorefreedom of movement and help citiesbreathe worldwide. From monorails andmetro systems, to commuter and light railvehicles - our newest products are ready.

Our product portfolio is focused onintelligent transit solutions, urban flow andpassengers' comfort.

Among our products, we have the bestalternatives for each project announced bythe Mexican government, among them, ourBOMBARDIER INNOVIA 300 family ofproducts for metro and monorail, as well asour BOMBARDIER FLEXITY FreedomLight Rail Vehicle.

YOUR ECO4 APPEARS TO BE A"GREEN" INITIATIVE. PLEASE EXPLAINWHAT THAT MEANS FORYOUR PRODUCT AND BUSINESS?

Sustainability is the key issue when itcomes to energy use for both the transportationindustry and our planet.

Leading the way in modern mobility,we introduced our first cutting-edge ECO4technologies in 2008. Today our ECO4portfolio includes 15 energy-saving solutionsthat serve as the backbone of modernfleet management and rail technology.

BOMBARDIER ECO4 technologiesare built on the four cornerstones of energy,efficiency, economy and ecology. Theyconserve energy, protect the environmentand help to improve total train performancefor operators and passengers.

These fully operational ECO4 technologiesrepresent a game-changing approachto rail technology that's both performancebasedand environmentally driven.

Aligned with operator requirementsand easily customized to any fleet, ourinnovative ECO4 solutions advance sustainablemobility by:

• Optimizing energy use
• Decreasing energy waste
• Minimizing CO2 emissions
• Increasing economic value
• Improving overall efficiency and totaltrain performance

FOR LONGER-TERM PASSENGERRAIL, WHAT NEEDS TO BE IN PLACE OR WHAT ECONOMIES NEED TOBE REALIZED THAT WOULD MAKEPASSENGER RAIL TRAFFIC MOREAFFORDABLE FOR MORE MEXICANS?

The feasibility of a train project doesnot depend only on the cost of the trainitself, but on its social impact. It is clearthat public passenger rail transport is acompetitive factor, generating an economicimpact with very high social returns includingcompetitiveness, employment,income, time, et cetera. Basically this typeof transport is a trigger for developmentand governments need to have this longterm vision.

WHAT ARE KEY DEVELOPMENTSTHAT WE SHOULD WATCH FORCONCERNING BOMBARDIERTRANSPORTATION IN MEXICO?

Bombardier's vision is one of interconnectedmodality with rail as the backboneof national transportation infrastructures.Our newest mass transit and e-mobilitytechnologies mean that integrated sustainablemobility is achievable today, supportingthe urgently needed shift from road torail to reduce congestion and pollution.

Bombardier's attractively designedsmart transport solutions blend seamlesslyinto a city's multi-mode transport infrastructure,offering interconnected modalityof public transport -from monorail andmetro systems running at-grade, elevatedor underground, to new solutions for electricvehicles. They also deliver a smallerenvironmental footprint and optimizeland use.

As a leader in rail technology, BombardierTransportation helps shape thefuture of mobility worldwide. It has recentlyinaugurated its Prototype Centerin Saint-Bruno, Quebec, where Mexicantalent is currently participating. This centerencourages greater involvement by ourcustomers, suppliers and partners in theresearch and development of pioneeringtechnologies that could be included in ourmanufacturing processes. Designing andprototyping passenger rail vehicles willenable us to reduce the time to build railvehicles and increase efficiency. The participationof Mexican talent in this centerwill allow them to acquire new skills andexpertise. This exported talent will returnto Bombardier Mexico to apply theirknowledge in future projects to be carriedout in Mexico.

Finally, let me reiterate that our commitmentwith Mexico is ever increasing,as demonstrated over the last years withmillions of dollars invested in equipment,site upgrades and training at our Mexicanfacilities.