Mergers and acquisitions among major companies have long been an occasional occurrence in any area engaged in manufacturing. But in the new age of globalization, with intense new competition from China and other parts of the world, competitiveness argues strongly for both the merger of like companies to create stronger combinations and the acquisition of proven assets that can enhance a company’s value proposition.
We’ve been seeing this increasingly in recent years with such examples as Koch acquiring Georgia Pacific, Swarovski acquiring Schonbek, and Imerys acquiring NYCO Minerals, to name a few. And now the quest to combine and acquire has come to transportation equipment, including the many players who are now a part of our large and growing Transportation Equipment Cluster in the North Country.
The acquisition of Bombardier Transportation by Alstom has drawn a great deal of attention recently. But it follows several similar acquisitions of area transportation equipment operations over the last few years which did not get much attention locally, such as GE acquiring Wabtec, Michelin acquiring Camso and AQ Group acquiring B3CG. In each case, our area operations are part of the productive strategic value that led to the acquisitions, with a more powerful parent potentially able to bring more business to the table.
Such is the case with the purchase of Bombardier Transportation. Change coming to a longtime friend like our local Bombardier operation naturally brings some degree of uncertainty. But make no mistake, Alstom acquired Bombardier first and foremost because there is a need to consolidate the major western railcar producers in North America and Europe to create stronger competitors for the Chinese who have aggressively entered the marketplace and changed the competitive equation. But the acquisition is also based on the enormous assets Bombardier brings to Alstom, from its established position in many world markets to its facilities and expertise.
In the case of Plattsburgh, we have one of the most comprehensively integrated railcar production sites in the world, able to produce cars from the fabrication of the shell to delivery to the customer, while also housing especially excellent capabilities in producing a number of key elements such as bogeys (the wheel carriages). And being part of an amazing and growing cluster of transportation equipment companies now numbering more than 50, at a time when clustering has become a crucial part of efficiency, workforce skills, supply chains, and needed support services for such an operation.
There are, of course, never any guarantees about the future. No community understands that better than Plattsburgh. But that is why we have deliberately built a large and diverse cluster, intermixed with further manufacturing diversity. But that said, this latest acquisition has the strong potential for Alstom to become a dominant force in the competition for future rail car and train production in North America and the world with Plattsburgh the newest gem in its crown.
As a year of transition begins, we continue to work strongly with our Bombardier friends on current and near term contract opportunities which can only further fill the already strong pipeline of business here, and we look forward in the coming months to building a similarly active and positive relationship with our new friends at Alstom.
Onward and upward!
Garry Douglas is president of the North Country Chamber of Commerce.