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Bombardier cites scare tactics for train vote defeat

(The following story by Bertrand Marotte appeared on the Globe and Mail website on November 4.)

MONTREAL -- A negative advertising campaign that used fear tactics and distorted the facts helped turn Florida voters against a high-speed train project in the state, a Bombardier Inc. executive says.

With most of the ballots counted yesterday after Tuesday's vote, Floridians had chosen -- by more than 63 per cent -- to repeal a 2000 constitutional amendment requiring the state to commit to high-speed rail.

An anti-train political action committee lavished about $3.5-million (U.S.) on a high-profile campaign that included television and radio ads in the major markets. Financial backers included the state's road builders and two theme parks that were upset that the first leg of the rail network -- Tampa to Orlando -- would stop on Disney property but not theirs.

Leading the charge against the bullet train was Republican Governor Jeb Bush, older brother of President George W. Bush, and the state's chief financial officer, Tom Gallagher.

The pro-rail side raised less than $1-million and conducted a basic grassroots campaign.

The pro-train amendment of 2000 passed by a margin of 53 per cent.

"The main reason the proponents of high-speed rail lost came down to money. There were a lot of fear tactics," said Lecia Stewart, Bombardier's vice-president of high-speed rail in North America.

"There was no ability to respond to that from proponents."

The anti-bullet-train campaign overstated the costs of the project fivefold and claimed it would lead to closings of schools and hospitals, cuts to teachers' salaries and the untimely release onto the streets of prisoners, she said.

The cost of the first leg was estimated at about $2.6-billion. The rail link being proposed by Montreal-based Bombardier and partners Fluor Corp. -- a California engineering firm -- and Virgin Group PLC of Britain called for the state to kick in $75-million annually for 35 years, with an eventual payback of $526-million from a revenue-sharing plan.

Ms. Stewart said there are no job losses arising from the scuttling of the project because no contract had been signed and the company had not yet scheduled the added work. The contract would have been worth about $500-million in systems and vehicle sales to Bombardier.

Preparing and putting in a bid to the Florida High Speed Rail Authority cost the consortium $10-million or $11-million, with Bombardier's share of that at about 25 per cent, Ms. Stewart said.

Bombardier's class B shares fell 9 cents (Canadian) to $2.71 on the Toronto Stock Exchange yesterday.

Frederick Larkin, an analyst with Orion Securities Inc. in Toronto, said the derailing of the project should come as no surprise.

"I don't think there was a very high level of expectation in the market for this. The (jet-engine-powered) technology is quite impressive. The question is the financing of the infrastructure and whether the project would generate returns on the investment."

"This has been a tough concept to sell in North America. Governments don't have the appetite for such capital expenditures."

Low-cost air fares and the still-affordable economics of automobile travel are big factors, too, he added.

"I don't know what it would take -- maybe extraordinarily high crude oil prices -- to force people off the highways and onto the rails."

Although Florida was at the most advanced stage, Ms. Stewart said there are 13 other high-speed rail corridors that have potential in North America, including Calgary-Edmonton and Los Angeles-San Francisco.

Dreams for a bullet train in the Sunshine State are not completely dead, said Keith Rupp, president of the pro-rail Florida Transportation Association.

Bills for a high-speed rail plan can always be introduced in the legislature, as happened in the past. But Governor Bush can always use his veto against any legislative initiative, just as he did when he was first elected in 1999, Mr. Rupp said.

Thursday, November 4, 2004

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