NOT IN SERVICE
Broken promises, missing parts, production chaos: How the TTC’s $1-billion deal with Bombardier has gone so far off the rails
Toronto was supposed to have 121 new streetcars by now. We have received only 35.
That’s the crux of the problem with the state of the TTC’s $1-billion contract with Bombardier for 204 lowfloor Flexity streetcars to be delivered by 2019. Almost eight years into the deal, Bombardier has repeatedly failed to meet its delivery deadlines, demonstrated quality-control problems that have dragged on for years, and promised that improvements that would double or triple the speed of delivery were around the corner.
In the meantime, the TTC has had to pay millions to keep its old fleet on the road while we wait, and has sometimes been forced to supplement overloaded lines with bus service that draws capacity from other parts of the city. When the old cars break down — sometimes disabling an entire line — people are left standing on street corners in the cold.
We need those streetcars. And once we get them, we like them and so does the TTC.
They are a once-in-a-generation purchase — the last time the fleet was replaced was at the end of the 1970s into the early ’80s. The model before that was introduced in the1930s. It’s a big deal when the TTC replaces its streetcars — the results will define downtown transit for decades.
To meet its most recent delivery targets, Bombardier will need to deliver as many cars to Toronto in the next eight months as it has in the past six years combined. And if it succeeds, it will need to deliver almost twice as many next year as it did this year to stay on track.
The questions are obvious: why should anyone believe they can now do what they have failed to do in the past? And how exactly has this gone so wrong for so long?
When the TTC signed this contract, it was not supposed to be a risky proposition. This was the largest single order of streetcars in the world, placed with one of the world’s largest manufacturers of those vehicles. The model is customized for Toronto’s system and differs in many ways from others around the world — for example, it has a different track gauge, needs to climb higher slopes and is fully wheelchair accessible — but it is based on a successful product line. For nearly two decades, Bombardier has produced similar newera, low-floor streetcars in Europe from its plant in Bautzen, Germany, with few detectable problems. Bombardier now boasts it is the most popular light rail vehicle in the world.
And yet, at its plants in Thunder Bay and Sahagun, Mexico, all of that experience and expertise seems to have escaped it.
“I know it is incredible that a car builder with decades of experience could not pull a credible schedule together,” Stephen Lam, the head of TTC’s streetcar department, wrote in an email to fellow executives in June 2015 obtained by the Star through a freedom-of-information request, saying the company had demonstrated itself to be “just incapable of sticking to a plan.”
During a months-long Star investigation reporters spoke with current and former Bombardier executives and managers, line workers and union representatives in Thunder Bay and in Sahagun, TTC engineers and executives, Metrolinx employees, politicians, city hall insiders involved in the contract’s origins, and industry experts. We examined court documents, Bombardier’s contracts around the world, and filed freedomof-information requests. While Bombardier has admitted the company had issues producing the streetcars, it would not respond to many questions about the details of production problems. “At this point we do not have the ability to chase down many of the technical questions, allegations or rumours,” said a spokesperson. Among the key themes that emerged:
A failure to properly plan and design vehicles to fulfil the contract’s terms and meet the TTC’s demands. For example, wheelchair accessibility was the reason the city opted for the 100-per-cent low-floor model, yet over a period of three years Bombardier failed to design and order ramps that would adequately meet TTC requirements.
Persistent manufacturing quality issues. To take one example from dozens, at one point, the TTC discovered some of the electrical systems on the first nine vehicles would mysteriously turn on and off. Electrical connector pins in the cars had not been correctly installed and thousands needed to be manually checked while the cars sat idle.
An inability to co-ordinate a global production line. Car parts are supposed to be mass produced to a standard so they can be fit together easily, but so many pieces have been delivered in non-standard sizes and shapes that a TTC engineer charac- terized the assembly of vehicles in Thunder Bay as being “hand-built.” A factory worker characterized it more bluntly: “They take f---ing hammers and they smash the steel into shape, like it’s a f---ing dwarves’ forge.”
An inability to manage a supply chain. At one point in 2015, a quarter of Thunder Bay production line workers were temporarily laid off because they didn’t have enough parts on hand to work with. When the Star visited the plant in April 2017, a factory worker told us they sometimes lack the parts to do their jobs.
Atin ear to public and government partner concerns, particularly puzzling coming from a company whose customers are public agencies and which has received government bailouts. This was on display this spring when it was revealed Bombardier planned to pay six executives bonuses totalling $32 million, just weeks after receiving a $372.5-million loan from the federal government, and roughly a year after receiving $3.3 billion in investments from the Quebec government and that province’s pension fund. After public outcry, CEO Alain Bellemare said they had done a “bad job” explaining and the company deferred almost half of the increased compensation, making it dependent on company performance.
Repeated failure to properly diagnose problems to be able to set and meet a revised schedule. For example, in July 2015, Bombardier was insisting to the TTC that it would be producing four cars per month by September of that year — it has yet to hit that rate two years later (in the first months of this year, they have delivered one car per month).
The company maintains it will meet the final 2019 deadline for delivering all the cars. As a result, the newest revised schedule is by necessity more compressed than ever.
New Bombardier Transportation President Benoît Brossoit told the Star in an interview that the company has invested and made changes to meet the newest revised schedule (the fifth schedule since the contract was signed). “I have committed my career on this, pretty much,” Brossoit said.
Changes to the supply chain, welding processes and investments in production capability will begin paying off shortly, he said.
It’s worth noting that after years of delays, Bombardier has so far met its new targets in the year since the current schedule was devised.
“We believe we have the right plan,” Brossoit said. “And if it turns out that it’s not sufficient or something happens, we will immediately react, and I will work with TTC to make sure that in the end they’re all delivered in the time frame. That commitment stays.”
At a TTC board meeting in midApril, TTC CEO Andy Byford said he had no reason at this time to doubt When the TTC first tested the wheelchair ramp, engineers realized the transition from the ramp to the car floor was not smooth, causing a “roller coaster sensation” when exiting, and difficulty getting onto the car. The ramp and the streetcar floor it is housed in would have to be redesigned. Bombardier would be able to meet its new deadlines. TTC chair Councillor Josh Colle, however, has said he’ll only believe it when he sees it.
And Metrolinx, the provincial transit agency that had piggybacked large orders of Flexitys for its LRT lines, has completely lost faith — it was in court this spring fighting Bombardier’s attempt to prevent it from trying to cancel the contract altogether. Bombardier won the case, at least temporarily, after the judge ordered both sides to go before a disputeresolution board.
The biggest test is ahead, as the deliveries need to ramp up drastically over the summer and fall of this year. It seems possible they have finally figured out how to right the ship.
The problems were evident even before the very first day the cars went into service.
Toronto’s first two new streetcars entered service on Sunday, Aug. 31, 2014, with a morning ceremony at Spadina station.
In a nod to the past, the sleek vehicles burst through a banner with a photo of a vintage Toronto PCC car, first introduced eight decades ago. There was a barbershop quartet. Politicians, including federal and provincial ministers, attended the launch.
“The TTC is proud to bring to fruition years of hard work that has brought the newest generation of streetcar to the people of Toronto,” said Byford.
“It’s accessible, it’s modern, it’s airconditioned and it’s the streetcar of the future.”
The cars then headed to Queens Quay carrying customers to watch the Blue Jays play the New York Yankees. Two members from the committee that helped ensure the vehicle would be Toronto’s first wheelchairaccessible streetcar had driven their scooters aboard for the ride.
Behind the scenes, the picture was not so rosy.
Bombardier had long-ago blown past its initial promise to have seven cars in service by the end of 2013. For months, the TTC had been planning a bigger rollout and Bombardier had assured there would be five or six new cars for the launch. Then, a little more than a week before the launch, Byford sent a memo telling staff to focus only on readying two cars for the ceremony.
“The TTC is not pressuring Bombardier to ship more vehicles — while we expect Bombardier to meet its contractual obligations, further shipping is at Bombardier’s discretion once vehicles are of an acceptable quality,” it read.
TTC officials had been seeing problems with the first three prototypes for years. Many of their concerns emerge in internal emails obtained by the Star through a freedom-ofinformation request. The emails are largely TTC staff communicating among themselves and do not include Bombardier’s responses to the issues raised.
All three prototypes were supposed to have been delivered by late 2011, but the first car arrived nearly a year late in September 2012. The second and third didn’t arrive until spring 2013. Each needed major retrofitting.
Many factors combined to cause these initial delays, say several people with knowledge of the order. Some were understandable. It’s normal for problems to arise during a prototype phase. After all, this is a complicated car, with some 10,000 parts.
Internal emails and interviews make clear, however, that some of the problems were not being addressed and fixed. Most notably, workers at the Sahagun plant were failing at what one official calls the “black art” of welding.
Components of the car were being produced at different sizes from what drawings specified. When assembled, the steel sidewalls were not flat, leaving gaps with mating parts. The parts needed extra attention when put together. And there were also design hurdles. For example, even though Bombardier had provided three internal layout options to choose from, the company told the TTC that its choice would take longer and cost more.
When TTC engineers first reviewed the prototypes being built in Thunder Bay, they realized wire terminal connectors in the car’s electrical locker sat on an angle, making it virtually impossible to access with a screwdriver or to even allow for inspection. The locker would have to be redesigned, including wire harnesses that ran through the cab. And there was the ramp. The wheelchair ramp, designed by French company Faively, played a particularly large role in the delays. Deployed from the second door of each car, it is housed inside the floor. The design allows the ramp to be deployed at two different lengths — shorter to reach streetcar platform level on Spadina Ave. or longer to extend to street level on Queen St.
On Aug. 16, 2013, following a meeting with Bombardier executives, Byford emailed that discussions over specifications for the ramp were holding up production.
“While I want ramp design to be as good as it can be, I am equally determined to get the new cars into service on time (during 2014) onto Spadina and Bathurst. We must not give (Bombardier) an excuse to declare a delay,” Byford wrote.
Lam, head of the TTC’s streetcar department, pushed back against Bombardier’s characterization that TTC demands were slowing the process. “The delay was, in fact, caused by Bombardier’s resistance to take appropriate and timely action to address a technical problem,” he wrote. In three years, the company, he said, had not “submitted an acceptable design.”
Months earlier, during a demonstration at the TTC’s Harvey Shop, staff tested the ramp with a manual wheelchair, the email says. The transition from the ramp to the car floor at the door was uneven. There was a dip, causing a “roller-coaster sensation” when exiting and causing diffi- culty boarding.
“Bombardier has failed to appreciate accessibility is the raison d’être for the new low-floor streetcar project — its interpretation of the welldefined spec has been to simply provide a ramp,” Lam wrote.
Lam also wrote the company did not initially understand the “magnitude” of the alterations it would have to make to the floor of the vehicle in order to get the ramp right. This would not be simple.
After testing, the first prototype car was sent back to Thunder Bay in the fall of 2013 to be modified. It wouldn’t return until the summer of 2014.
The TTC kept the second and third prototypes, despite their flaws, because they needed to train drivers.
In late spring 2014, Bombardier officials were assuring the TTC that, even with the threat of a strike in Thunder Bay, they would deliver six streetcars, ready for service, for launch day.
“I just spoke to (then head of Bombardier Transportation in America) Raymond Bachant,” Byford emailed on May 23. “He absolutely understands the need to provide us with six, reliable, acceptable units ready for our launch.”
TTC officials were skeptical. Bombardier continued “to have major problems in managing supply chain. In particular, Faively who is struggling with door performance, ramp and HVAC (heating, ventilation and air conditioning),” according to a June 13 briefing note.
By August, with Thunder Bay factory workers on strike, it was clear they would only have two cars ready — the now retrofitted first prototype car (#4400) and the first non-prototype, production car (#4403).
The next car in the production line (#4404) was “in just bad a shape as #4400 when it was delivered” and the chances of it meeting standards in time were “VERY low and not worth the distraction,” wrote Lam on August 13, two weeks before the launch.
By year’s end, the TTC would have only three cars in service. Bombardier’s initial production schedule said they would have 37.
While the strike impacted delays, the internal TTC emails suggest quality issues played an even larger role.
On Oct. 8, 2014, Lam sent a photo of an unacceptable gap between a sidewall and underframe. “They are still learning how to fabricate and quality-control an under frame on Car #8,” Lam says in the email. The entire section of the car needed to be scrapped.
In an email sent the following day, Lam noted there were 500 “snags to clean up” on the next production car in line.
Doing the math, Lam added that in order for the company to deliver its 204th car by mid-2019 Bombardier would have to accelerate production to one car per week. The plan “may look good on paper but would not be able to be met; or at much compromise and risk of poor quality.”
“I would suggest at this time we have no confidence in their ability to accelerate.”
“I know it is incredible that a car builder with decades of experience could not pull a credible schedule together.” STEPHEN LAM HEAD OF TTC STREETCAR DEPARTMENT
In early 2014, the mood in Bombardier’s Thunder Bay assembly plant was grim. Production was at a standstill. Not a single streetcar had left the plant in more than six months. Veteran workers complained that long-standing problems with the assembly of the TTC Rocket subway car, which was also being built in Thunder Bay, hadn’t been resolved in years. “We have way too much of some parts and not enough of some other parts,” wrote an anonymous worker in his union newsletter. “How does this happen?”
In a modern, 21st-century global manufacturing corporation, shipping parts to a plant for “just-intime” assembly was supposed to be the most basic of tasks.
Managers, the worker wrote in his “C Bay Rant,” had assured workers that streamlining the supply chain “was the easiest problem to solve.” But it was little more than talk, he concluded, because “Here we are two years later STILL WAITING FOR PARTS!!”
According to Bombardier workers, managers and executives, the company consistently failed to establish an efficient assembly line that didn’t require customization on each car.
Building Toronto’s streetcars was split between Sahagun, where the welding of the car’s different components was performed, and Thunder Bay, where parts from Mexico and elsewhere arrived for assembly. The two facilities were also building an order for Metrolinx light rail vehicles, which are similar to the TTC streetcar.
In early February 2017, Bombardier filed an injunction in Superior Court to prevent Metrolinx from cancelling its $770-million contract. Metrolinx had filed notice, saying that Bombardier had defaulted because the pilot was two years behind schedule.
Documents filed this year as part of the lawsuit brought against Metrolinx show that Metrolinx had ex- pressed concern about its order for 182 light rail vehicles for more than two years — concerns that echo those the TTC had expressed since 2012.
In October 2014, then-Metrolinx CEO Bruce McCuaig wrote to Raymond Bachant, then president of Bombardier Transportation’s Americas division, warning that “we are losing confidence in Bombardier’s ability to deliver service-ready vehicles without a substantial change in approach.”
He complained that parts were “out of dimension, patched, and clearly without the quality to meet . . . the required design life.” As examples, he cited underframes that had to be heated to be brought back into tolerance, car bodies that had to be forced together and riveted using 2,000pound clamps, and inspections that revealed as much as 20 per cent of welds were flawed. The problems continued. In June 2016, nearly two years later, Metrolinx consultant John Watkins told Bombardier that he wasn’t seeing improvements in Sahagun, and in fact, inspection methods had regressed.
Watkins swore in an affidavit that by December 2016, deficiencies had forced Bombardier to issue more than 400 “quality notifications” for just three builds. Watkins said between 15 and 50 notifications were typical in the early stages but he alleged that notifications had been issued for “every single welded and machined part” made in Mexico.
“I have not experienced this degree of quality notifications on any project in my career.”
Thousands of hours of computerassisted design in Germany were supposed to allow Bombardier producers in Europe, North America and Asia to fabricate parts that would snap together like Lego. But when these pieces arrived in Thunder Bay, workers found many didn’t fit.
A type of nut that could have corroded was mistakenly used and had to be replaced. Fiberglas frames arrived too thick and didn’t fit, creating a risk that the windshield would pop off. Side panels wouldn’t affix to the car body and had to be sanded to remove excess paint. The end plates on the opening of the car body delaminated or peeled apart.
One baffling problem the TTC grappled with in the summer of 2015 was intermittent electrical problems on the cars. But with the arrival of the ninth car, the TTC discovered that the electrical harnesses — large bundles of wires that connect the streetcars’ complex electronic systems — hadn’t been properly installed. Some of the electrical pins that connected the wires to the car were loose.
Connections on every car had to be checked.
“Workers in Thunder Bay had to take off 2,000 to 3,000 connectors and re-crimp them to the right size,” says Dominic Pasqualino, president of Unifor Local 1075, the plant’s union.
To correct the problem, Bombardier sent the supplier to Mexico and Thunder Bay to learn how to properly connect the wires. The TTC could not understand why the company hadn’t done this in the first place, said one TTC official.
For production to hum, everything has to come together smoothly in a complex global ballet of container ships, tractor trailers and waybills. Otherwise part delays can trigger serious production problems, not only by causing delays but by forcing work to be done out of sequence which can lead to mistakes.
“It’s a very complex supply chain, internally and externally,” said Jeffrey Blakeman, who last November became Bombardier Transportation’s fourth vice-president for the Americas operations in three years. “We’ve got suppliers from China. We want to collaborate with those just as much as we do with the mom-andpop supply chain that are here in the Ontario base.”
Blakeman acknowledges that Bombardier has struggled with its supply chain but the problems “have been significantly reduced.” Six to nine months ago, the list of parts on backorder would stretch two or three pages at each production station in Thunder Bay, he said, but now each one shows only handful of items.
Throughout the saga of Bombardier’s delays, the company’s plant in Sahagun has been characterized as the source of all problems. Poor quality workmanship was “escaping” Sahagun and causing enormous problems in Thunder Bay.
Workers at Bombardier’s 500,000square-metre factory in Sahagun had never built this particular 100foot-long, low-floor streetcar. But there was no reason to believe the technologically modern plant — acquired from the Mexican government in 1992 — wasn’t up to the job.
More than 70 per cent of all passenger rail vehicles in Mexico were made at the 2,000-employee plant, which has also built tram and train parts for Kuala Lumpur, New York City and Minneapolis.
After the TTC contract was signed, Bombardier sent several Sahagun employees to the company’s “Light Rail Vehicles” competence centre in Europe. There, the Mexicans were trained how to manufacture and weld parts for the TTC’s custom version.
Eventually, Bombardier’s welding experts were deployed from Germany to Mexico to train. But, according to one source, they left too soon.
“It was not a lack of desire to invest. For me, it was not understanding how much a transfer of technology was required,” said Bombardier’s Brossoit in a recent interview. “We may not have totally understood that early on in the transfer process. . . . It’s those little details that will hurt you.”
Any training was set back by the high turnover rate in Mexico, where skilled welders would leave to take higher-paying jobs — a situation that would persist until the end of 2016.
Increasingly, the dynamic between Bombardier’s Thunder Bay and Mexico plants appears to have been competitive and at times adversarial. In Thunder Bay, some workers resented having to work with parts manufactured in Mexico, parts they could have been making themselves.
“As of today, all of the contracts Bombardier Thunder Bay is working on are publicly funded by the taxpayers of Ontario. The intent of these contracts was to create good-paying jobs for hard-working Ontarians,” wrote local union member T-Jay Hook in a newsletter distributed during the strike in 2014.
“Today, Bombardier is taking this money and investing it in Mexico. The new LRV streetcar contract is now completely fabricated in Mexico and only assembled here in Ontario. This is wrong.”