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Coast Engine chugs on

Tacoma company helps keep America’s trains on the job

JOHN GILLIE; The News Tribune
Published: March 18th, 2007 01:00 AM

When Dave Swanson was named president of Tacoma’s Coast Engine and Equipment Co. four years ago, the Tideflats railroad equipment maintenance company employed 62 workers and was struggling to make a profit.

Today, the company just south of Highway 509 has 149 workers on the payroll and is solidly profitable for The Washington Cos., the group of Northwest industries that has owned the company since 1988.

That growth is a testament to the expansion of the railroad industry, astute management, a skilled work force and a careful program to keep up with the changes in the railroad equipment business.

The change in CEECO’s fortunes is in part the result of the rail industry’s big growth in recent years.

Driven by a burgeoning demand for foreign goods imported from Asia at West Coast ports and transported by rail to the East and the Midwest and by the nation’s thirst for energy in the form of coal for power plants, rail industry traffic and profits have grown handsomely.

In 2003, for instance, the nation’s largest railroads’ profits totaled $2.7 billion. In 2005, according to the Association of American

Railroads, they reached $4.9 billion.

American railroads’ return on equity rose from 6.65 percent to 9.12 percent in that same period.

The need for rail transport has helped fill CEECO’s shops with work. Some major railroads have been so short of locomotives that they had to let trains sit on sidings because they didn’t have the locomotives to pull them. That translates to a healthy demand for new and rebuilt locomotives and for quick turnarounds on repairs.

Swanson won’t say how much money CEECO makes, but he notes that Washington’s patient investment in the company is finally paying dividends.

The Washington Cos.’ principal owner is Dennis Washington, a Montana mogul who has successfully invested in a range of industries from Aviation Partners, a Seattle company that designs and builds fuel-saving winglets for jets, to Montana Rail Link, the nation’s longest privately held railroad.

Washington is No. 98 on Forbes list of the 400 Richest Americans.

Washington bought the company in 1988, shortly after it moved to its present site from its longtime shop in the World War II-era Port Industrial Yard, a former shipyard on the peninsula north of East 11th Street between the Hylebos and Blair waterways.

Washington bought the company in part to help maintain his own fleet of locomotives at Montana Rail Link and the Southern Railway of British Columbia, said Swanson. But the company had depended on other rail customers for the bulk of its work.

ADAPTING TO CHANGE

Over the 60 years CEECO has been in business, it has adapted to the changing marketplace.

The Walker family began the company in 1947. Its main job then: repairing EMD (Electromotive Division of General Motors) marine diesel engines in fishing boats, tugs, ferries and work boats.

The marine business has faded in part because other engine manufacturers moved into the marine engine business once dominated by EMD. To stay alive, Coast has successfully morphed itself into one of the nation’s larger independent locomotive repair and overhaul facilities.

The key to that transition was the company’s expertise in repairing the giant EMD diesels which are much the same in marine and railroad applications.

CEECO is the sole West Coast authorized repair and warranty station for EMD locomotive and rail engines.

These 40,000-pound engines typically generate 2,000 to 6,000 horsepower and drive generators that supply electrical power to the electric motors that power locomotives’ drive wheels.

CEECO now annually rebuilds about 50 of those huge engines, whose pistons are bigger than 5-pound coffee cans.

“Locomotives will last almost indefinitely if you repair and rebuild them periodically, said CEECO’s general manager, David Morton.

Most locomotives operate seven or eight years, accumulating perhaps 750,000 miles, before they must be overhauled.

The big prime movers typically are completely rebuilt multiple times before they are scrapped. Locomotives are not retired because they are irredeemably worn out, but because they don’t meet modern emissions, fuel economy or safety standards.

Indeed, because of their longevity, CEECO must maintain an expertise in repair of locomotives built as long as a half-century ago.

In CEECO’s rail yard now are two classic EMD locomotives from the ’50s owned by rail hobbyists who have hired the company to put the now-rare machines back into top mechanical and aesthetic order.

And in the company’s locomotive repair hall is an even rarer beast, a 1,200-horsepower narrow-gauge diesel locomotive built by Canada’s Bombardier for Alaska’s White Pass & Yukon Route Railway.

That railroad, now a huge tourist draw, operates from Skagway into Canada on a 3-foot gauge track. (American standard gauge is 4 feet 81/2 inches between the rails.) The railroad was originally built to carry gold prospectors from Skagway to the Yukon gold fields at the turn of the century.

One of the railroad’s locomotives was mangled in an accident last fall on a work train. It’s CEECO’s job to put it back in working order.

CEECO general manager Morton said the job is particularly challenging because only a handful of the locomotives were ever made, and the engine, a six-cylinder diesel built by ALCO, which is no longer in the new locomotive business, is a rarity.

White Pass & Yukon President Gary Danielson said the railroad’s insurance carrier selected CEECO to handle the restoration because the company had a reputation for quality work and the expertise to work on unique kinds of equipment.

The railroad, for instance, never had good construction drawings of the locomotive, so CEECO and White Pass experts are visiting a California mining railroad, which operates the other surviving locomotives like the wrecked one to discover how it was built.

The locomotive is old technology, with mostly mechanical or simple electric controls.

The company has already pulled off the bent metal cover sheltering the engine and has mounted the locomotive temporarily on standard gauge freight car trucks in order to move it into and out of the repair facility.

When the rebuilding is over, CEECO plans to construct its own short narrow gauge line to test the locomotive.

Sitting beside the vintage diesel is perhaps its technological opposite, a modern Union Pacific mainline locomotive that uses alternating current motors to power the drive wheels. (Until recently, most locomotives mostly used direct-current motors.)

That UP locomotive is in the shop for just a few days to replace part of it metal exterior where a coal chute accidentally struck it. That modern locomotive is bristling with a whole room full of electronic relays and computers to control its propulsion system.

tech updates for old trains

Changes in the locomotive business have persuaded CEECO to broaden its expertise.

It began rebuilding and maintaining General Electric locomotives two years ago. General Electric, once a distant second to EMD in the locomotive business in the U.S., now is the lead player.

EMD, once a division of General Motors, is now independent but remains one of the two big locomotive builders in the country.

The company has not only learned to maintain and install the modern electronic controls used in the industry’s newest products, but it also has learned how to retrofit older locomotives to bring them up to date.

The new technology drive is spurred by two forces in the railroad business, the search for more fuel efficiency and new regulations limiting emissions.

CEECO is working with other companies to create or refit locomotives to better satisfy those new demands.

It is working with a Spokane company, for instance, that produces a small 3-cylinder diesel engine that heats and recirculates the water in a locomotive’s cooling system even when the main engine is shut down.

Historically, the big 16- or 20-cylinder diesel engines are left idling even when a locomotive was not working even overnight, said Swanson.

That practice was driven by two facts: Locomotives use water, not antifreeze, in their cooling systems, and big diesels are hard to restart when cold particularly because they were equipped with small batteries relative to the size of the engines.

Locomotives use water for cooling because the glycol in antifreeze can ruin an engine if it leaks into the engine’s lubrication system.

But water freezes at relatively high temperature compared with antifreeze, so railroads kept the locomotives idling to keep the cooling water and the engine warm.

The new retrofit, which CEECO installs, keeps the water from freezing and keeps the engine warm, which makes restarting easier.

The small diesel uses far less fuel and produces far less pollution than the locomotives’ main engine, which can be shut down now after the small diesel retrofit.

The company has also branched out into freight-car maintenance and locomotive and rail-car painting.

“When Trains Magazine wanted to write an article about locomotive painting is done right, they came out here to visit,” Swanson said.

As part of the rebuilding program, CEECO blasts off the old locomotive or rail-car paint down to bare metal and then repaints the locomotives and rail cars to owner specifications.

EMD now from time to time even sends partially complete new locomotives to CEECO to get their final checkout and paint job. EMD recently asked CEECO to help it build four new locomotives from their major parts.

Swanson said he was tempted to accept that job, but in the end he turned it down.

“I spent restless nights thinking about it, but I knew that if I accepted it, it would plug up our shops for months, and we couldn’t adequately service our regular customers,” Swanson said.

Those regular customers include both the BNSF and Union Pacific railroads, the region’s two major carriers.

Other customers are regional railroads such as Tacoma Rail, Portland and Western, Amtrak, Sound Transit and Dennis Washington’s own Montana Rail Link and Southern Railway of British Columbia.

More distant major railroads on CEECO’s client list include Kansas City Southern and Canadian Pacific.

The company recently did a capacity study that showed the present facilities could handle more work if it develops. If the company expands, Swanson expects it will do so on its present site.

“We’ve got 141/2 acres here, and we occupy only about seven or eight,” he said.

“We like Tacoma. We have a very talented staff here, and we intend to remain here,” Swanson said.

John Gillie: 253-597-8663

john.gillie@thenewstribune.com