LOS ANGELES — Milwaukee-based rail equipment manufacturer Talgo and LA Metro are involved in dueling lawsuits over a cancelled contract to refurbish Los Angeles subway cars, with Talgo filing a $48.8 million countersuit Friday after Metro filed suit in September.
City News Service reports the Metro suit claimed Talgo had defaultd on its contract and was holding Metro cars “hostage” to gain leverage in a demand that the transit agency pay Talgo $60 million.
But Talgo’s suit says that Metro, knowing it owed Talgo significant money, filed its suit “in hopes that the false, unsupported allegations therein could shield it from paying Talgo what it is rightfully owed.”
At the start of the COVID-19 pandemic, Talgo says it worked with Metro to adjust the schedule for the subway car project in light of supply-chain and employee issues. The manufacturer says Metro, facing revenue loss during the pandemic, then suggested the work be suspended or the contract be ended at a reduced price. It then began delaying Talgo’s work by slowing testing, approvals, and payments, the countersuit alleges, “to manufacture the illusion that Talgo was failing to perform.”
The suit filed by Metro alleged Talgo was guilty of testing failures, software issues, delays, and staffing issues, and that Metro gave Talgo multiple chances to comply with the contract before terminating the agreement on May 6. That suit says Talgo has 10 subway cars at its Milwaukee factory, and the efforts to find a new contractor to complete the work is “significantly frustrated pending the return of Metro’s property.”
The two sides agreed on a $54.7 million contract in 2016 to refurbish 74 subway cars; changes to the contract eventually increased the price to $90.5 million. Metro says it has paid about $41 million so far but does not indicate how many cars have been completed.
Won’t be long until Talgo closes its doors and gets out of the USA with a bad taste in its mouth. They are doing very well in many other countries.
Yep, screwed by Wisconsin now getting screwed by LA.