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Originally published Friday, November 5, 2010 at 10:03 AM

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Trainmaker Talgo says its future in Wis. uncertain

Trainmaker Talgo Inc. said Friday it can't promise it will stay in Milwaukee if Wisconsin scuttles its plans for a high-speed rail project as Gov.-elect Scott Walker has proposed.

Associated Press

MILWAUKEE —

Trainmaker Talgo Inc. said Friday it can't promise it will stay in Milwaukee if Wisconsin scuttles its plans for a high-speed rail project as Gov.-elect Scott Walker has proposed.

Talgo has enough work to keep it in Wisconsin through early 2012, but its prospects beyond that are as uncertain as the rail project's future, company spokeswoman Nora Friend said.

"Until two days ago we were telling (employees) there was definitely potential for growth," she told The Associated Press. "Now we have to tell them the truth, that it all depends on what the government decides to do."

Walker, the Republican who was elected governor this week, has criticized the high-speed rail project that would link Madison and Milwaukee as a waste of taxpayer money. He has vowed to shut down the $810 million project, which is being funded by federal stimulus money.

Outgoing Democratic Gov. Jim Doyle on Thursday ordered contractors to suspend work on the train line while his administration considered the potential impact of killing the project.

Neither he nor Walker immediately returned a message Friday.

Talgo agreed to locate its Wisconsin site at a former automotive plant in Milwaukee in March after the city agreed to invest $3 million to convert and upgrade the facility. Talgo said at the time it planned to create 125 local jobs, not including additional work for vendors and suppliers.

Friend said the company expected to have 40 employees by the end of the month, but said she could no longer make any staffing predictions beyond that.

Workers at Talgo's Milwaukee plant are currently working on two project. The company plans to deliver a pair of train sets by next spring for a line that runs between Milwaukee and Chicago, Friend said. She said work on another pair of train sets for a line in Oregon should be complete by the spring of 2012.

Milwaukee Mayor Tom Barrett, the Democrat whom Walker defeated in the governor's race, said Thursday the stimulus funds that would pay for Wisconsin's project are earmarked specifically for high-speed rail. If Wisconsin's project is derailed, he said, the money - if it's not used to pay down the federal deficit - would most likely fund high-speed rail in other states such as Florida or Illinois.

If the money goes to another state's train project, couldn't that still lead to work for Talgo that would keep jobs in Milwaukee? Not likely, Friend said.

"The thing is, states all want the manufacturers to manufacture in their state," she said. "They would probably require it."

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U.S. Transportation Secretary Ray LaHood said during two different visits to Wisconsin this year that high-speed rail was a national priority and the train could not be stopped by one state.

But the projects also have been called into question in other states and among Republicans in Congress. U.S. Rep. John Mica, R-Fla., in line to head the House Transportation Committee after Tuesday's election, said Wednesday that he wants to re-examine the $10 billion in federal grants that were handed out to Wisconsin and other states for the work.

Talgo Inc. is the Seattle-based U.S. subsidiary of Patentes Talgo SL in Madrid, Spain.

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Online:

Talgo: http://www.talgoamerica.com/

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Dinesh Ramde can be reached at dramde(at)ap.org.

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