Allow me to introduce our new web reporter, Jessica Hoch. Her first news story for Oregon Business looks at a fresh piece of federal legislation with unusually strong bipartisan support, the Green Railcar Enhancement Act. This bill could be just what Portland-based railcar manufacturer Gunderson needs after more than two years of cutbacks.
I’m turning over today’s Jobs Watch column to Jessica Hoch, our new web reporter. She’ll be covering the latest in statewide business news, and her report on the future of the railcar manufacturing industry is her first piece for us.
One of Oregon’s most important holding companies, Lake Oswego-based Greenbrier, could be poised for recovery if the Green Railcar Enhancement Act of 2010 becomes law. In a press conference this morning industrial and political supporters including Congressman Earl Blumenauer, one of the co-sponsors of the bill, said the tax credit could generate approximately 30,000-50,000 family-wage jobs nationally and help stabilize the industry.
The bill, which has generated significant bi-partisan support, would pull old, inefficient railcars off the tracks and replace them with newer, more efficient railcars with a focus on reducing carbon emissions. Railcar owners would receive a 25% tax credit to have their old cars replaced or rebuilt. The credit would be limited to cars built in 2010 and 2011 and require an 8% increase in either capacity or fuel efficiency.
Since the recession began in 2008 the freight railcar industry has teetered on the verge of collapse. The bill’s goal is to accelerate market demand to get the industry through the next two years and avoid further job cuts. About 54,000 people have lost their jobs in the industry over the past 18 months, including 500 at Gunderson, a Portland-based subsidiary of Greenbrier.
“We’ve had a vibrant company in Oregon for years in Gunderson and this legislation is very important for them,” said Blumenauer.
Susan Wilson, director of public affairs at Greenbrier, said the number of jobs and business that would result from the tax break would depend on on how much demand for new cars the bill creates. But the hope is that it’s a step in the recovery process for Greenbrier, one of six railcar manufacturers in the nation.
The bill is estimated to cost $800 million, but officials say it will pay for itself over time through increased income taxes and Medicaid payments plus reduced unemployment costs. Jim Unger, vice president of American Railcar Industries, a Missouri-based manufacturer, said replacing inefficient cars could save up to 70 million gallons of oil a year, reduce carbon emissions and lessen congestion on highways.
The 25% credit is intended to stimulate railcar owners to purchase new cars by covering the equity required when borrowing to buy replacements.
Upgrades to old railcars would include replacing heavy, steel cars with lighter aluminum and utilizing new designs and technologies to increase capacity.
The bill has been referred to the House Committee on Ways and Means.
