Jump to content

CRRC Sifang America

From Alfawiki
CRRC Corporation Limited
Company typePublic, state-owned enterprise
IndustryRolling stock manufacturing
FoundedJune 1, 2015; 11 years ago (2015-06-01)
FounderMerger of CNR and CSR
Headquarters
China
Area served
Worldwide
ProductsRolling stock, locomotives, rail vehicles
OwnerCRRC Group (majority), China Securities Finance, Central Huijin Investment
Number of employees
183,061 (2016)
ParentCRRC Group

CRRC Corporation Limited (CRRC) is a state-owned Chinese enterprise and publicly listed manufacturer specializing in rolling stock, holding the distinction of being the largest globally by revenue, outpacing rivals such as Alstom and Siemens.

Formed on 1 June 2015 through the consolidation of CNR and CSR, CRRC had a workforce of 183,061 employees by 2016. Its parent organization, CRRC Group, operates as a state-owned entity under the supervision of the State-owned Assets Supervision and Administration Commission of the State Council. Additional shareholdings are maintained by China Securities Finance and Central Huijin Investment.

Merger

The origins of CNR Group and CSR Group trace back to the China National Railway Locomotive & Rolling Stock Industry Corporation (LORIC), which was divided in 2002. By late 2014, both companies agreed to reunite, subject to approval from Chinese authorities. According to the agreement, CNR Group officially acquired CSR Group, while CSR Corporation Limited took over China CNR Corporation Limited. The unified group was renamed CRRC Group, with its public entity titled CRRC Corporation Limited (an acronym for China Railway Rolling Stock Corporation). This strategic merger sought to enhance operational efficiency and boost competitiveness on a global scale.

The merger became effective on 1 June 2015, with shareholders receiving 1.1 CSR shares for each CNR share held. Post-merger, the company emerged as the world’s leading manufacturer of railway rolling stock, commanding over 90% of China's domestic market. It employed approximately 175,700 personnel and had share capital valued at .

Overseas expansion

Following the merger, CRRC intensified its international growth efforts. In October 2014, it secured a $556.6 million contract to deliver 284 metro cars (later increased to 404) for the Massachusetts Bay Transportation Authority's Red and Orange lines. Subsequently, construction began in September 2015 on an assembly facility in Springfield, Massachusetts, with production starting in April 2018.

In mid-2015, CRRC commenced operations at its inaugural manufacturing site outside China located in Batu Gajah, Malaysia, affiliated with CRRC Zhuzhou Locomotive. Prior to this, former CSR had acquired Argentina’s Emprendimientos Ferroviarios in 2014 and planned to initiate maintenance and manufacturing activities there by 2016. Argentina has been a key client, purchasing numerous EMU cars, locomotives, and freight wagons over time. In 2017, Argentina placed an additional order for 200 EMUs from CRRC.

Also during mid-2015, CRRC established a freight wagon joint venture named Vertex Railcar in collaboration with Hong Kong-based Majestic Legend Holdings to produce railcars in Wilmington, North Carolina. CRRC contributed designs and components while Majestic Legend invested US$6 million. The facility became operational by early 2016. Despite concerns from Congress regarding Chinese government subsidies and potential national security risks, an investigation by the Treasury Department cleared the joint venture.

By late 2015, CRRC set targets to double its international sales within five years, focusing on passenger rail markets in North America. Interim financial reports indicated overseas revenues grew by more than 60%, with half-year revenues reaching , gross profits at , and non-rail income totaling .

In March 2016, CRRC Qingdao Sifang secured a contract valued between US$632 million and US$1.3 billion (including options) to manufacture up to 846 rail cars for the Chicago Transit Authority (CTA). This contract led to plans for establishing a $40 million assembly plant in Chicago.

In March 2017, CRRC MA based in Quincy, Massachusetts won a contract from SEPTA to produce 45 bi-level rail cars with options for ten additional units; assembly was scheduled for Springfield with car shells supplied from Tangshan. CRRC outperformed competitors Hyundai Rotem and Bombardier in securing this deal.

Later that month, CRRC was awarded a contract to supply up to 282 HR4000 cars for the Los Angeles County Metropolitan Transportation Authority (LACMTA), intended to replace aging vehicles on the Red and Purple lines. This included plans for constructing an assembly plant in Los Angeles.

However, deliveries of MBTA Red and Orange Line vehicles encountered significant delays accompanied by quality issues such as electrical defects and brake malfunctions leading to service withdrawals. CRRC attributed these setbacks to supply chain disruptions caused by COVID-19; meanwhile, MBTA officials criticized CRRC’s management practices and quality control lapses. Reports from workers highlighted disorganized assembly workflows and payment problems that disrupted supplier deliveries.

In 2023, CRRC received roughly US$214 million in government subsidies. In April 2024, SEPTA canceled their bi-level rail car order after investing $50 million due to ongoing delays and substandard quality; they are currently exploring options for financial recovery. CRRC expressed regret over the cancellation but reaffirmed its dedication to completing the project.

Allegations of Bribery in South Africa

In June 2016, CSR Corporation Limited, which later became part of CRRC, faced accusations of bribery concerning the awarding of a 2012 contract valued at US$6 billion to supply 600 locomotives to South Africa's state-owned Passenger Rail Agency (PRASA). Investigations connected Busisiwe Mkhwebane, who would later become South Africa’s Public Protector, to this arrangement during her time at the South African embassy in China. By 2020, the South African Revenue Service froze payments related to a revised contract for locomotives manufactured by CSR, now operating under CRRC, due to suspicions of corrupt activities involving affiliates of the Gupta family.

Sanctions Imposed by the United States

The United States Department of Defense asserts that CRRC provides equipment to the People's Liberation Army. In November 2020, then-President Donald Trump issued Executive Order 13959, prohibiting American individuals and corporations from holding shares in companies associated with the Chinese military, including CRRC.

In October 2022, CRRC was officially designated by the U.S. Department of Defense as one of the "Chinese military companies" functioning within the United States.

Investigation by the European Union

In February 2024, the European Union initiated a probe into CRRC over allegations that it benefits from government subsidies to gain an unfair advantage against European competitors.

Ownership Structure

As of December 31, 2016, CRRC’s majority ownership was held by CRRC Group directly and indirectly through CRRC Financial and Securities Investment (中车金证投资), which controlled 1.64%, amounting to a combined 55.91% of total A-share capital. Other state-owned entities under central government control included China Securities Finance with a 2.87% stake and Central Huijin Investment holding 1.12%. Among H shareholders, BlackRock possessed 6.13% (267,971,072 shares), representing approximately 0.98% of overall share capital. Similarly, Seattle-based Himalaya Capital owned roughly 6.13% of H shares (267,904,000 shares). Remaining shareholders individually held less than one percent each of total share capital.

CRRC Operations in the United States

CRRC maintains two primary subsidiaries within the U.S.:

  • CRRC Massachusetts – operating in Boston and Los Angeles regions
  • CRRC Sifang America – concentrating on the Chicago market

Locomotive Manufacturing

Rolling Stock Production

Combined Locomotive & Rolling Stock

Additional Entities

Joint Venture

International Operations

Additional Investments

On 8 January 2016, CRRC expanded its investment scope beyond rail production by acquiring a 13.06% equity interest in China United Insurance Holding for . Furthermore, it holds joint ownership of Zhuzhou Times New Material Technology alongside its parent entity, CRRC Group.

In November 2016, CRRC Zhuzhou Locomotive revealed intentions to purchase the Czech firm Škoda Transportation; nevertheless, this transaction was never finalized.

On 1 March 2024, CRRC formed a collaboration with Grupo Comporte, structured as 40% CRRC and 60% Grupo Comporte ownership, to bid on supplying 22 inter-city trains for Brazil’s Trens Intercidades initiative. This project aims to connect Luz Station and Campinas, with delivery anticipated by 2030.

See also

External links

Retrieved from "https://www.alfawiki.org/index.php?title=CRRC_Sifang_America&oldid=68745"