Why Free Trade in Rolling Stock is Good
Classical economics asserts that if two countries freely trade, then both gain relative to a baseline in which they don’t trade. The classical theory of comparative advantage hinges on reciprocal free trade. But more recently, economists have begun to push for entirely domestic support for free trade, arguing that reducing trade barriers is good even without reciprocation. The arguments involve corruption and misallocation of capital coming from protectionism. Whatever criticism there may be of this neoliberal conception of trade, rolling stock appears to be an example in which this conception is right.
I have previously criticized informal French protectionism in high-prestige procurement for blowing up Parisian rolling stock costs by a factor of almost 2. In Paris, my example of what could be done with the money Ile-de-France Mobilités is wasting on rolling stock was infrastructure construction, justified by the city’s very low construction costs relative to ridership (if not relative to route-length). But there’s an even better set of examples of high costs in the United States, justified on labor grounds and yet involving wastes of money disproportionate to the number of jobs created.
Last month, The American Prospect published an article about a union push to have more US rolling stock made in America, by unionized workers. The TAP article talks about a light rail vehicle order in Los Angeles for $890 million, for what the article says is 175 cars and what manufacturer Kinki Sharyo and other industry sources say is 235 cars, built at a dedicated factory in the Los Angeles exurbs. The purpose of the article is to advocate for more protectionism for the sake of American union members, so it details the wages the workers are making (about $20 an hour, up from $11 for unskilled jobs elsewhere) but does not delve into comparative costs. It’s worth asking if the costs are competitive, and the answer is that they are not.
The cost of LACMTA’s Kinki Sharyo order is $3.8 million per car; these cars are 27 meters long, so this translates to $140,000 per meter of train length. In contrast, the average cost in Europe appears to be just under $100,000 per meter, across a variety of cities and models:
- In Bordeaux, a recent Citadis tram order cost $80,000 per meter.
- In Strasbourg, the Citadis cost $95,000 per meter.
- In Avignon, the Citadis Compact cost $95,000 per meter.
- In Aubagne, the Citadis Compact cost $100,000 per meter.
- In Budapest, an order for Urbos trams cost $95,000 per meter.
- In Birmingham, the launch customer for the Urbos, they cost £2 million per unit, and at 33 meters per car, it’s around $90,000 per meter.
- In Luxembourg, the Urbos cost €3.95 million per unit, each at 45 meters, or $110,000 per meter, and include catenary-free operation.
- In Munich, the launch customer for the Avenio, the trams cost $120,000 per meter.
- In the Hague, the Avenio cost $90,000 per meter.
The shortest trains on this list (the Citadis Compact orders, at 22-24 meters) are in the middle of the pack, so it’s unlikely there’s any nonlinearity in cost; moreover, the Compact is slightly shorter than the Kinki Sharyo trains, so no extrapolation is required, only interpolation.
The LACMTA order follows another premium-priced light rail order in the same state: as I wrote in the Bay City Beacon last year, Muni Metro’s Siemens LRV order cost about $4 million per 23-meter car, about $170,000 per meter of train length. The trains are being built at a new plant in Sacramento.
The United States has federal Buy America laws, requiring federally-funded contracts to buy domestic products provided they cost no more than 25% more than equivalent imports. However, there is no in-state purchase requirement. Owing to large New York City Subway orders, some vendors have long-established plants near New York (Kawasaki and Alstom are in-state, Bombardier is in Vermont). However, under informal pressure from activists within California to provide good local jobs, LACMTA asked bidders to open local factories. Moreover, Siemens most likely placed its plant in Sacramento rather than in lower-cost states in order to curry favor with state-funded orders.
We even see the same problem in Massachusetts, where CRRC opened a plant in Springfield for an MBTA Red and Orange Line car order. The order itself does not come at a premium – according to Metro Report the base order is about $100,000 per meter of train length and the option is $115,000, and the range of per-meter costs for subway trains is the same as that for LRVs – but it’s possibly a loss leader to help establish CRRC as a player in the American market. Even before Trump’s election, Congress investigated the order, which beat the competitors by a large margin; the competing bids were about $135,000 per meter for the base order. It says a lot about Massachusetts’ broken procurement that it takes a loss leader just to get costs down to their international levels. Nonetheless, the US premium does appear to be smaller for large subway orders than for small and medium-size LRV orders, since the extra costs of siting and setting up a factory are spread across more units.
The explicit goal of local content requirements is to create jobs. This is usually justified in terms of inequality and bleak prospects for unskilled workers. However, there is no cost-benefit calculation involved in this. According to TAP, the LACMTA order is creating 250 jobs manufacturing the trains; it doesn’t say how long they will last, but the duration of the contract is about 6 years. But the premium, about $300 million, works out to $1.2 million per job, a large multiple of total compensation to the workers. The Springfield plant has 200 jobs paying $50,000-60,000 per year, lasting 7 years across more than just the Boston contract; pro-rating to the Boston contract’s share of orders from the plant, the jobs will last around 5 years. Adding back the premium charged by the competing vendors raises the cost to $1 million per job, again a multiple of total working-class compensation.
There are two reasons why labor protectionism costs so much compared with its direct impact on working-class hiring. The first is leakage: much of the premium goes to management, including factory design and construction, or is just wasted on inefficiency (CRRC is opening a second American plant, in Chicago, instead of building everything at one plant). Some of the money goes to foreign consultants with the vendor and some stays domestic, but the domestic leakage goes to sitework and not to direct hiring.
The second reason is corruption and degradation of institutions. When the goal of public procurement is not just to buy the best product in terms of cost and quality, lobbyists make demands, like local hiring, that corrupt the process. A city that signals that the only things that matter are cost and quality will attract vendors who make the best bids in terms of cost and quality; a city that signals that the process depends on local political needs will attract vendors who make bids in order to satisfy local political actors, who as a rule don’t give a damn about good transit. Thus American agencies buy trains at a premium well beyond Buy America’s 25% limit, just because they think of cost and quality as just two of several political priorities and not as the sole legitimate bases of choosing a bidder.
The United States leads the world in higher education costs. The unsubsidized cost of a college degree at a good public university is about $100,000; at CUNY, which provides a good quality of degrees even if it’s so underfunded that classrooms aren’t supplied with chalk, it’s about $75,000. Stipends at the level of a good graduate program add another $30,000 or so per year. For around $200,000 per person, California could send low-income workers to college and pay for their living expenses for the duration of the degree, whereupon they will be able to get unsubsidized jobs paying much more than $20 per hour. For workers who can’t go to college, trade school is another option, offering decently-paying jobs for much lower cost since they take much less time. There is no need to lade the transit capital budget with what should be state or federal retraining grants; given the massive difference in cost, even the loss of matching funds (i.e. other people’s money) can leave the state or the city better off.
The problem is that there is no political incentive to think in such terms. Part of it is the corruption of institutions, as I mentioned already: labor groups see an opportunity to create jobs from a budget that from a local perspective is other people’s money. Another part is political prestige: romantics like old jobs (farmer, builder, truck driver, coal miner, baker, factory worker), which have had enough time to percolate into the national psyche, and since these jobs are old, they’re likely to be at the low end of the value-added ladder.
Absent very strong rules forbidding protectionism in procurement, this corruption will continue: evidently, Paris insists on buying expensive bespoke trains and somehow manages to get them manufactured within France, even though EU rules against interstate dumping are much stronger than US rules. Rules at the highest level are required to discourage such behavior (although Paris might still waste money on bespoke trains, just ones that can be made in Poland). Congress can and should stop funding any local or state agency that takes in-state content into account in procurement; the US is one democratic country, not fifty mercantile fiefdoms, and should use its status as a superstate with a large internal market to universalize good governance.
Pedestrian Observations 
SBB lifecycle costs (from a 2007 presentation) for modern (decades ahead of anything US-specific) FLIRT (or similar) over 25 years:
Procurement: 55%
Maintenance: 25%
Electric power: 11%
Cleaning: 8%
Buying fewer vehicles (hopelessly unreliable ones) at a huge cost premium just results in fewer 100%-un-exportable jobs for operating and maintenance crews, as well as the givens of worse service and environmental degradation. Want more local jobs? Import more and better and cheaper transit vehicles and run them more often. Overhead-intensive and capital-intensive manufacturing can’t pay off.
None of this is specific to trains: US transit bus procurement is public disaster also.
Sadly the sight of a dozen deluded and/or on-the-take hard-hats paraded in front of a public transportation body in the US is always going to trump the public interest. The system is explicitly designed for failure. Transit is expected to be infrequent, costly and unreliable, transit agencies are expected to operate as welfare agencies, and government is expected to be incompetent. It’s the American Way.
This is an excellent point.
When conparing meter prices, one should also take into account the vehicle width. There is definitely a difference in price per meter between a Flexity 2 for Blackpool (2.65 m wide) and Basel (2.3 m wide).
I tried to get numbers for Flexity 2 vehicles, and the Zürich order (70 vehicles, 43 m long, 2.4 m wide, option for another 70 vehicles, spares, tools, training etc.) leads to CHF/USD 115’000 per meter (at the moment, there is approximate parity between CHF and USD).
The Basel order is a bit more complicated to calculate, as they have 7-section and 5-section vehicles, which are 2.3 m wide. A quick calculation leads to CHF/USD 105’000 per meter. However, there are no options involved, and the spares/tools/instructions package may be smaller.
Wouldn’t WTO/GATT rules be sufficient against forced local contents?
No, rules requiring local content for government purchases seem compliant (and if they’re not, then why has literally every other WTO member not brought suit against the US for Buy America laws?). And on the local level these aren’t formal rules, just informal understandings within a politicized process.
WTO chief says “Buy American” meets world trade rules
https://www.reuters.com/article/us-wto-buyamerican/wto-chief-says-buy-american-meets-world-trade-rules-idUSTRE51M0T520090223
“But there are many ways to protect people that are better than protectionism, which at the end of the day does not protect anybody,” Lamy said.
I’m interested in how you reconcile the contradiction between your position against Buy American for rolling stock and your position in favor of in-house expertise on construction projects rather than using consultants.
Why is there a contradiction? Infrastructure design should be in-house because there are always special local conditions, so you can’t ever buy a tunnel off-the-shelf; you can design one based on your engineering knowledge and then contract out construction based on competitive bidding. But trains, you can and should get off the shelf, again by competitive bidding.
Define off the shelf. One of the biggest fleets in the world was assembled in the U.S. and is owned by the MTA in New York. At reasonable prices. Denver got decent ones by saying “we’ll have some of what SEPTA had but for 60hZ 25kV only”. MARC and AMT got decent prices by saying “we’ll have some of those that NJTransit has”
crack-truck Rotem Silverliners and obese Bombardier MLVs aren’t exactly inspiring examples of US train production and procurement
I’m sorry they offend you delicate sensibilities. That doesn’t change. for instance, there almost 1,200 M7s flitting around that were purchased for a reasonable cost.
What point are are refuting here by asserting that the single largest passenger railroad in the United States managed to procure ok rolling stock at okay prices?
that Americans manage to build and operate large fleets. They may not be to someone’s more refined tastes but they exist.
The more recent order, i.e. the M9, is $1.8 billion for 584 cars, or $120,000 per meter of train length. And this is despite the size and conservatism of the order making it a good fit for a transplant factory that exists purely because of protectionist laws. Smaller orders (e.g. Caltrain’s KISSes) end up way costlier.
Wikipedia says the 584 are the options for additional cars after the initial order of 92, so 676 total.
Yonkers and Westchester County get property taxes on the plant, the people working there pay payroll taxes, they go out and spend it on stuff that has sales tax on it. They get health insurance and make enough that they don’t qualify for other benefits like food stamps…
The $300 million in extra cost that the state is spending wouldn’t magically vanish; it would stay in-state.
CRRC’s facility on Chicago’s South Side is largely complete now: https://www.youtube.com/watch?v=DwgtquyeZk0
Interestingly, it was built in partnership with CenterPoint, a large developer and landlord of industrial buildings. They know how to get these buildings put up quickly, especially on brownfield sites. However, an assembly plant for railcars isn’t that specialized. Most of the specialty machining, milling, etc will take place at CRRC’s overseas suppliers. The assembly plant is just a big tilt-up shed with a few gantry cranes to move big parts around, plus a few big lifts for undercarriage work. My guess is, CRRC is only investing the cost of rail-specific equipment, like the lifts, plus tools and training for their employees. The building itself is probably being funded by CenterPoint who will collect rent from CRRC for the duration of the railcar contract, and will then be free to lease the facility to any industrial tenant (manufacturing or warehouse) they want after that.
The building is next to a large Ford plant, so it could be attractive to auto parts suppliers. CenterPoint probably has a good business case to build a building here even without CRRC’s involvement.
“For around $200,000 per person, California could send low-income workers to college and pay for their living expenses for the duration of the degree, whereupon they will be able to get unsubsidized jobs paying much more than $20 per hour.”
A lot of those workers simply don’t have the brains to complete a college degree, so this is not an option for them. Because we don’t want them to starve, this means we have to create make-work jobs for them, even at immense cost.
The alternative is to just give them money. Here we get into the larger debate of basic-income versus basic-jobs, which is well discussed here:
http://slatestarcodex.com/2018/05/16/basic-income-not-basic-jobs-against-hijacking-utopia/
I don’t know how many of the specific 250 people employed at Kinki Sharyo’s Palmdale factory could graduate college if it weren’t for tuition fees, but I suspect it’s way more than 0. People who think of $20/hour as a good wage are unlikely to be able to borrow enough to complete a degree without a full ride plus some on-campus work for living expenses, which are rare at the UC and CSU systems. The richest private unis in the US do offer full rides, but a) most people can’t get into Harvard, and b) low-income Americans tend not to know that Harvard and such give full rides to everyone who gets in and thus even very smart 12th-graders in poor areas rarely apply.
I agree it’s not the entire roster of 250 workers, but there are two mitigating factors. First, trade school. And second, there have to be innumerable poor Americans who would go to college if it were free and if they didn’t have to scrounge money for living expenses; letting them all earn college degrees would reduce the supply of low-skill labor, which would make some marginal jobs disappear (e.g. automation of supermarket cashiers) but also raise wages. I forget where I’ve read that fast US industrialization in the Gilded Age came about as universal primary education and Northern regulations against child labor reduced the labor supply and forced employers to invest in labor-saving technologies; I think Robert Allen references this in one of his papers but it isn’t his original idea.
The 40 hour work week isn’t the Eleventh Commandment.
One thing I think is worthwhile considering is how much we have to gain if the WTO globally took on buy local regulation.
Transit vehicles are absurdly expensive compared to say, cars.
There’s certainly a lot of room for improvement not only on cost but on features. Yet this doesn’t materialise because globally these trains are built in tiny numbers by local factories.
Trains are actually much cheaper than cars when you take circulation and capacity into account. Rolling stock acquisition is a small proportion of the operating and capital costs of public transit, whereas car purchases are around a quarter of the total cost of car-based transportation in the US.
I’m sure car purchases are a smaller fraction of the cost of taxi transportation. Maybe that is a more appropriate comparison?
This seems a ungainly comparison. The majority of car based transpo features drivers that work for free. Given that labor is a large part of train system costs, comparing to a system with low labor costs would skew the comparison.
However, automobiles truly are a worldwide, highly competitive, high volume market with fairly small country specific requirements. Since trains tend to be at least semi-custom for each project and with low and uneven demand, it’s natural you’re going to get much more competitive pricing on autos.
The problem with this is that cars are also more expensive than trains; the US leads the first world in transportation costs as a percentage of household spending.
As a sanity check, the subway in New York has 6,400 cars, which would cost around $13 billion to replace, lasting 40 years, so somewhat more than $300 million a year in depreciation. New York has about 2 million cars and trucks, whereas at the US average per capita rate it would have nearly 7 million. At $25,000 per new car, this is $120 billion, lasting 15-20 years, so the depreciation is $6-8 billion a year. Put another way: the operating costs of the subway in New York, including fleet replacement, are less than just the cost of purchasing cars for New Yorkers to boost them up to rest-of-country ownership rates.
Customization is certainly part of the problem. Freight locomotives in the US are relatively cheap because they are all basically the same. Union Pacific does not really customize their motive power relative to CSX or Norfolk Southern. For whatever reasons this is not the case for passenger trains, locomotives or coaches. While obviously Amtrak needs to buy different trains for long distances than commuter railroads, it is quite puzzling to me why more state agencies are not doing what Denver, Maryland or the Brightline in Florida did by buying existing designs that fit their needs. The majority of the customization that state agencies demand is unnecessary.
While legacy systems have certain limitations, for example, the LIRR is third rail and clearly cannot use off-the-shelf catenary vehicle, any state that buys bespoke equipment for new services is really doing dis-service to their commuters and taxpayers. Some of the problem might be in bidding process and the requirements to always choose the lowest bid even if the savings is marginal relative to older proven designs.
Another reason why US freight locomotives are relatively cheap is that the signalling equipment is cheap (if existing at all). In a full-blown multisystem Vectron (such as usable in Germany, Switzerland, Austria, Italy and the Netherlands (main network and Betuwe line), signalling equipment makes about 20 percent of the price. And add another 15 percent for the certification in all those countries.
There’s traditionally no ATP in the US. Less advanced lines use train orders, more advanced ones have lineside electric signaling. A couple of lines have cab signaling, but it’s uncommon.
US mainline pax rail seems really standardized though for diesel trains? A new system nearly always gets an MPI MPXpress loco with Bombardier BiLevel coaches; barebones services can buy used F40PHs and ex-Metra/Comet coaches from a strong secondhand market. The Stadler GTW DMUs might come at a slight premium here, I’m not sure. It’s transit EMUs which are largely a free-for-all because of internal resistance from more established agencies, and the majority of electric systems do have quite bespoke infrastructure.
RE: U.S. diesel pax rail. . .there a little bit of a customization ripple working its way through right now due to purely circumstantial factors colliding. But it is structurally a temporary phenomenon.
FIRST. . .
Post-2000 expansion of commuter rail systems + rosters has left an acute aftermarket shortage of old power (EMD F40PH-2’s, EMD F59PH’s, & the like) that’s still kicking around for acquisition in any rebuild-worthy condition, where the rebuilds can still be done at a lower emissions tier than the current Tier 4 standard mandated for all-new purchases. Every unit worth a rebuild is being actively rebuilt or acquired for rebuild, like the mid-1980’s vintage of F40PH-2’s and -2H’s that are basically immortal. Those are all being rebuilt to F40PH-3 or -3H spec with enhanced Tier 0+ to Tier 3 emissions controls and computer brains, and are easily good for another 20+ years of daily service if well taken-care of. Likewise, you have MPI taking the desiccated hulks of old EMD GP40 pax units and giving them a head transplant into MPXpress MP32PH-Q’s “hermit crabs” that are basically clones of their ubiquitous early-2000’s MP36PH-3 make living inside the shell of an old Geep. But unfortunately the supply of rebuildable bodies is just about tapped out, with everything not already claimed for rebuild being Geeps too far gone to do a “hermit crab” job or completely shot ex-Amtrak 1970’s F40’s that have already gone through 3 or more rebuilds and can’t take another. Ask commuters on the MBTA or Metrolink who’ve had the recentish displeasure of being stranded behind broken-down ex-AMT F40’s or ex-GO F59’s laundered on short-term lease from third party rent-a-wreck brokers to patch acute fleet shortage how much utility there is in scraping the bottom of the barrel.
The shortage of rebuildables isn’t going to get better unless.. .
1) Amtrak’s RFP issued this week for rebuild or replacement of its national GE Genesis fleet ops for picking up the 150+ extant national options on the existing Siemens Charger contract, freeing up a slew of P42DC’s and P40DC’s fleets for re-sale to commuter land where they’d be eminently rebuildable for bulletproof short-haul duty. They did the RFP for possible Gennie rebuild despite holding the 150 Charger options in-hand, but that was purely an administrative move to secure an all-encompassing manufacturer service & support agreement (which Siemens already offers on the electric Sprinters and state-sponsored Charger order) where the current nat’l Charger options currently lack the S&S comprehensiveness they seek. So in all likelihood they end up buying the Chargers by patching the original contract with this RFP, and then end up with 12-18 dozen Gennies to sell off to commuter-land.
2) VIA Rail’s RFP for rolling stock on the Canadian Corridor services either displaces its own identical 21-unit P42DC Genesis fleet, or knocks out all/most of its older but immaculately maintained 53-unit F40PH-2 fleet while reassigning the younger P42’s to long-distance duty.
Unfortunately, in either case you’re waiting a minimum of 5-7 years to even get bids on some more good-condition F40’s or Gennies to pick up for commuter rebuild because Amtrak and VIA by policy usually place their retired stock in storage for up to 2-5 years until the replacements (whenever they can get cued up) pass certain warranty milestones. So not nearly soon enough for any commuter agency that needs bodies now…although a more promising picture for CHEAP help coming online a half-dozen years from now for upstart or expansion-hungry systems that can feast just dandy off more push-pull frequencies.
——————–
SECOND…
Everything bought new has to be Tier 4 emissions compliant, and the new regs are too steep to push the old venerable diesel platforms from the 1980’s to early-2000’s (F40PH, F59PH, MP36PH/MP40PH, GE Genesis, etc.) to the latest standard. There’s only so much you can do to tart up an EMD 645, EMD 710, or GE 7FDL prime mover to the latest regs, and those 3 engines were the ones used by nearly every pax diesel worth its salt over the last 50 years. So right then and there you’re forced off the old venerable “it just works” engine platforms onto either new ones, with all the required debugging of matching a different engine (Siemens Charger’s QSK95, a marine engine that’s newish to trains; GE’s GEVO, the overwhelming freight leader but brand-new to passenger service; etc.) with the very software-heavy controls of all 21st c. makes.
For this very moment in time there is no “off-shelf” when buying new pax diesels like there is in freight-land. GE Rail (and new owner Wabtec) is world-dominant in freight units, but GE made a conscious decision to bow out as a pax builder rather than update the Genesis in the ‘aughts because the margins didn’t fit their portfolio like the killing they make in freight or as a component supplier. EMD is a shell of its former self, and isn’t exactly turning heads with the F125 which is mostly a thrown-together pu-pu platter of other people’s components. MPI, which had the bestselling pax diesel of the ‘aughts with the MPXpress lineup (MP36/40 + the MP32 “hermit crabs”) is S.O.L. right now because the regular single-engine MPXpress tops out at Tier 3, and already hit its evolutionary weight limit so no further tweaks are available to make it Tier 4. MPI so impaled itself trying to design-build the MBTA’s lemony-stink HSP-46 (mashup of “good” GE GEVO engine with some tried/true Genesis and MPXpress components, but absolute piss-poor broken systems integration) that it neglected R&D on the MPXpress. They cannot sell any more new MP36 or MP40 units, despite their bestselling status, because they can’t be made Tier 4. And they’re running out of old Geep bodies to remake into MP32 “hermit crabs”, so the whole MPX lineage is sitting at a dead end. They managed to pad their sales totals with a last gasp of loss-leadery type MP36/40 procurements right before the clock struck midnight on the Tier 4 mandate, but now it’s finished. The only further action has been to cook up the genset unicorn MP54AC to try to get something/anything Tier 4 certified out of their former cash cow. By grace of Ontario political corruption they were somehow able to goad GO Transit into stupidly buying a bunch of those overweight unicorns, but nobody else is ever going to sniff at a genset for how off-scale the maint and fuel costs are vs. a traditional prime mover -based diesels for push-pull commuter ops. The company is pretty much focusing its energy on Tier 4 freight units now and probably won’t bid on future pax RFP’s at all other than bilking GO for a quick follow-on order of gensets now that the agency is in too deep to back out.
This will all get better and revert back to previous normalcy/orthodoxy once something establishes itself as the new “off-shelf” and solid 1990’s power like the Genesis comes available for commuter rebuild. Siemens seems to be in pole-position for setting the new standard given how many ongoing and upcoming procurements are sniffing intently around the Charger and how hard they’re pushing those comprehensive S&S agreements to gain market leadership. If the Charger nets itself an installed base well into the triple-digits (it’s already sitting on 85 deliveries) there’ll be a lot more action from other builders around the same Cummins QSK95 prime mover. And there’ll be an inevitable competing platform…perhaps someone a bit more competent than MPI taking a second stab at a GE GEVO -based pax diesel. We’re just unfortunately at an inflexion point where changes in the bureaucratic regs collide head-on with the creeping evolutionary dead-end of the venerable old diesel platforms…which then collide head-on with chaotic business changes in the builders market. With all that then colliding head-on with the supply shortage for rebuildable old units and the acute fleet shortages on many commuter rail systems. All of that induces an era where North American carriers are temporarily overleveraged on the unproven…and not necessarily for the usual self-inflicted maladies (NIH syndrome, procurement procrastination, state-of-repair deficits, etc.), though cautionary tales like MPI/MBTA and the HSP-46 still abound to highlight the groupthink risks for over-customization.
It’s not a very good book.
https://pseudoerasmus.com/2016/12/25/bairoch/
http://eh.net/book_reviews/kicking-away-the-ladder-development-strategy-in-historical-perspective/ (Different book by the same author but similar problems)
The Palmdale Lancaster plant that Kinki sharyo built was not going to be union, but the union filed a CEQA “greenmail” (idiom variant of blackmail”) lawsuit challenging the already approved California environmental impact report the factory had already secured. This resulted in an injunction preventing the factory from being built, potentially for years while the lawsuit was addressed. The union publically announced that they would drop the lawsuit if the factory agreed to be union, and after a couple months Kinki Sharyo buckled and agreed, the lawsuit was dropped and no environmental challenge occurred.
This is the primary use of CEQA lawsuits these days, to extract rent or to inflict financial punishment if you believe the project to be your enemy.