When Government Picks Winners and Losers

Doyle has been touting his spending of taxpayer dollars on buying trains with a no-bid contract and luring a Spanish company to Milwaukee.  It looks like it will result in some good things:

The passenger train factory to be developed at the former Tower Automotive plant on Milwaukee’s north side will create around 125 jobs, Gov. Jim Doyle and other officials said Tuesday morning.

Spanish train manufacturer Talgo will use a refurbished building at the former Tower site to assemble passenger trains that will be used in Wisconsin, Oregon and possibly other states. Around 60 positions will be needed to build the trains, with another 65 jobs tied to maintenance work.

Talgo had initially been expected to have around 80 positions at its Wisconsin plant. Doyle said the factory at the Tower site will also indirectly create an estimated 450 jobs at companies located throughout the Midwest that will provide supplies, equipment and services to Talgo.

That initial number of 80 jobs was based on Wisconsin’s $47.6 million controversial no-bid deal with Talgo to build two 14-car trains for use on Amtrak’s Milwaukee-to-Chicago Hiawatha line. That contract includes an option to buy two more trains for a planned extension of that route from Milwaukee to Madison.

Of course, Milwaukee already has a company that builds trains: Super Steel.  But Doyle didn’t want to favor a local company because that’s not as cool.  Well, when the government picks winners, it also picks losers.

Milwaukee manufacturer Super Steel Products Corp. filed for receivership Tuesday, listing $44.4 million in liabilities and assets of “significantly less” than $16 million.

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In this case, the receivership filing comes just one day after Super Steel was told it wouldn’t win a contract to build train cars for Spanish company Talgo. Super Steel had been pursuing the work.