Nippon Sharyo Ltd. and Nippon Sharyo USA Inc. announced the expansion of its U.S. production facility in Rochelle, Ill., which started operation in June 2012. The expansion involves construction of a new building for the metal fabrication and machining production.

In the U.S., when the funding for new rolling stock procurement is provided by the Federal Transit Administration, Buy America Requirements under 49 CFR 661 will be applied, which requires that 60% of all components for the rolling stock to be of U.S. origin and the final assembly of the rolling stock take place within the U.S.

However, the contract for bi-level passenger railcars (130 railcars with an option to purchase an additional 300 railcars) awarded in November 2012 by California Department of Transportation and Illinois Department of Transportation is funded by the Federal Railroad Administration (FRA), which requires “100% Buy America” under 49 U.S.C. §24405(a). To meet the FRA Buy America requirement, the expansion of Nippon Sharyo USA’s Rochelle facility is planned.

A groundbreaking ceremony for the expansion to include a third shop was held in Rochelle, Ill. Guest speakers included U.S. Secretary of Transportation Ray LaHood, Illinois Gov. Pat Quinn and Nippon Sharyo Chairman Katsuyuki Ikushima.

In the new facility, major parts and components for the car body will be manufactured using U.S. made raw material. Continuous lean production process from raw material to the complete car body under the strict production and quality control is expected to lower the overall cost.