NEW YORK (Reuters) - High energy prices and a recent U.S. transportation bill will boost U.S. demand for light rail systems in coming years, the head of Siemens' North American operations said on Tuesday.
The diversified engineering and electronics group has a backlog of orders which has topped $1 billion for the first time, George Nolen, Chief Executive of Siemens Corp. (SIEGn.DE: Quote, Profile, Research, Stock Buzz), told the Reuters Manufacturing and Transportation Summit in New York.
"A lot of cities are starting to invest in alternative forms of transportation, really driven by the transportation bill as well as high energy costs," said Nolen, who also described robust demand for Siemens' health care technology, information systems, and products that increase energy efficiency.
Siemens' light rail orders typically range between $70 million and $100 million. They can involve setting up a new system -- as Siemens is doing in Charlotte, North Carolina -- or expanding existing rail networks. Siemens is the largest U.S. provider of light rail systems, with 35 percent of the market.
Siemens is adding 20 cars to the light rail network in Portland, Oregon. In Houston, it connected the city to the Reliant football stadium in a project aimed at cutting car congestion. There, Siemens leveraged its size because it also provided the electronics for the stadium.
Other cities expanding their networks include Calgary and Edmonton, Nolen said.
Since cities need a lot of time to lay the groundwork for a rail project, Siemens is able to predict strong future demand. Current orders precede both a spike in energy costs and last year's U.S. transportation bill, which provides matching grants and other incentives.
"You can see it coming for several years down the road," Nolen said. "You're going to see more cities."
Separately, Nolen said Siemens' North American automotive business was not seeing much of a slowdown despite the well-publicized problems in the industry. The company's focus is on electronics components, a growth market, he said.
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