February 1, 2011

APTA members predict layoffs, overseas investment without reauthorization

While public transportation-related businesses were encouraged by President Obama’s State of the Union commitment to investing in America’s infrastructure, new research shows that they remain deeply concerned about the negative effects that a delay in passing a long-term surface transportation authorization bill will have on their businesses.  

In a survey released by the American Public Transportation Association (APTA), 80 percent of private sector businesses surveyed indicated that the level of federal investment in public transportation has a large influence on business revenue.

The survey also showed a grim outlook for the industry if federal surface transportation authorization is further delayed, with 84 percent of respondents predicting revenue losses. The consequences on jobs could be significant with 50 percent predicting that they will lay off employees and 49 percent predicting hiring freezes if Congress fails to enact a well-funded, long-term bill soon. 

“As unemployment rates stay stubbornly high, public transportation is a smart investment that creates and supports jobs, while improving our communities,” said APTA President William Millar. “Conversely, the survey shows that Congress’ delay in passing an authorization bill has the opposite effect — forcing private sector businesses to lay off employees and to invest overseas.”

The association also notes research that shows every dollar invested in public transit yields four dollars in economic returns and every $1 billion invested creates or supports over 36,000 jobs. 

Patrick Scully, chief commercial officer of Daimler Buses North America, said that an authorization bill would help stabilize the industry. “Congressional action would provide much needed certainty to our industry to allow transit agencies the needed time horizon for long term capital planning, which in turn should turn into vehicle procurements and thus would help our business know how much we can invest in human capital and other resources,” he said. 

Jeffrey Wharton, president of IMPulse NC, which manufactures overhead electrification contact systems for light rail and trolley systems, reiterated that investments in public transit will help to put America to work. “With increased federal investment, we hope to increase our payroll, while also expanding jobs for our sub suppliers,” said Wharton.

“The uncertainty and continued delay in authorization is having a serious negative impact on all businesses, including DRI,” said David Turney, CEO of the DRI Corp., which makes digital communications technology that is used in transit systems. “We can’t afford to delay any longer. We are increasingly turning to international markets instead of the United States because of the delay in authorization. We urge Congress to follow President Obama’s lead and commit to long-term funding for public transportation in America.

More than 700 of APTA’s private sector businesses were surveyed for the report, with a 10 percent response rate. Investment in the public transportation industry creates and supports over 1.9 million public and private sector jobs and is a $54 billion a year industry.

 

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