North Carolina Rail Car Factory

This article contains a correction.

The Siemens Rail Car Factory is investing $220 million to build a manufacturing plant in Lexington, North Carolina, which will help create at least 500 jobs.* The new factory will enable the company to provide transit agencies with the rail cars needed to supply their transit corridors.

Historical context

Siemens, which is already the largest passenger rolling stock manufacturer in the United States, is expanding its manufacturing capabilities in a commerce hub in North Carolina:

• “Siemens Mobility has contributed to the power of connection, jobs and investment to our American cities with eight manufacturing facilities, 4,000 employees and more than 2,000 suppliers across the United States. Siemens Mobility has been manufacturing in America for more than 40 years and Lexington, NC will be its ninth manufacturing site, with other facilities located in Alpharetta, Georgia, Louisville, Kentucky, Marion, Kentucky, Pittsburgh, Pennsylvania, New Castle, Delaware, Tualatin, Oregon and two facilities in Sacramento, California.” – Siemens, March 7, 2023
• This expansion of Siemens’ manufacturing capabilities comes at the same time as Amtrak seeks to “expand dramatically across the United States and add up to 39 corridor routes and up to 166 cities by 2035.” – Reuters, March 7, 2023
• “Lexington is in Davidson County and home to nearly 20,000. It is located in the Piedmont Triad: a commerce hub with easy access to transportation and a strong workforce in central North Carolina.” – Business Wire, March 7, 2023

Project summary

Siemens is building an advanced manufacturing and rail services facility that will manufacture rail cars for Amtrak and other transit agencies:

• “The … site in Lexington — featuring over 2 miles (3 kilometers) of rail track — is where Siemens Mobility will build passenger cars to better serve its East Coast customers and meet growing demand for its products.” – AP News, March 7, 2023
• “The passenger coach manufacturing factory, as well as first-of-its-kind locomotive and passenger coach overhauls facility will be on a 200-acre site allowing for future facility expansion. When it starts operations in 2024, it will incorporate some of the latest technologies found in our Sacramento facility including robotic welding, 3D printing, and Virtual Reality welder training.” – Siemens, March 7, 2023

The project will be facilitated by a grant from North Carolina’s Job Development Investment Grant from the state’s Economic Investment Committee:

• “Using a formula that takes into account the new tax revenues generated by the new jobs, as well as a capital investment of $220.2 million, the JDIG agreement authorizes the potential reimbursement to the company of up to $5,636,700, spread over 12 years. State payments only occur following performance verification by the departments of Commerce and Revenue that the company has met its incremental job creation and investment targets.” – North Carolina Department of Commerce, March 7, 2023

Outcomes, improvements, and practical impact

The new manufacturing facility will allow Siemens to serve the East Coast and Midwest markets and meet increasing demands for rail cars and eco-friendly transportation methods: 

• “With the increased production capacity, Siemens Mobility will fulfill the growing demand for passenger rail in America by producing some of the most innovative and sustainable passenger trains in the North American market. … More than 40 transit agencies across the U.S. and Canada benefit from Siemens Mobility’s portfolio of light rail vehicles, locomotives, passenger coaches, components and automation systems, moving millions of passengers every year.” – Siemens, March 7, 2023
• More rail cars will help Amtrak, one of Siemens’ clients, meet rising customer demands: “Amtrak said ridership rose 89% over 2021 levels to 22.9 million riders — up 10.8 million passengers over the prior year. Overall ridership hit about 85% of pre-COVID levels in the last six months of the 2022 budget year, Amtrak said, adding it expects ridership and revenue to rise above 90% of pre-COVID levels by September 2023.” – Reuters, November 29, 2022

Climate impact

The plant itself will be carbon neutral and will place a greater focus on electrification, which will help reduce the already small environmental footprint of the rail industry:

• “When fully operational the facility will be carbon neutral, playing an important role in our sustainability commitments.” – Siemens, March 7, 2023
• “The company’s core areas of focus include rolling stock, rail automation and electrification, and a comprehensive software portfolio among other offerings.” – Area Development, March 8, 2023
• “The transportation sector emits the highest amount of greenhouse gas (GHG) emissions of all the U.S. sectors, with the rail sector contributing 2% of those emissions. Rail plays an important role in reducing the transportation sector’s emissions due to the efficiency of passenger and freight rail transportation. … The rail network, for both passengers and freight, produces lower GHG emissions than roadway and air transportation, which means that shifting trips from road and air to rail in markets where it makes sense can reduce overall transportation emissions. Still, rail’s reliance on diesel fuel leaves a large challenge in reducing GHG emissions from the rail industry.” – U.S. Department of Transportation Federal Railroad Administration, last accessed April 10, 2023

Economic impact

The new plant will bring hundreds of high-paying jobs to the area and is projected to generate billions of dollars in the North Carolina economy:

• “The facility will create more than 500 new jobs and be one of the city’s [Lexington, North Carolina] largest employers.”– Siemens, March 7, 2023
• “The current average wage in Davidson County is $49,956,” and the “average salary for the new positions at the facility will be $51,568.”– North Carolina Department of Commerce, March 7, 2023; Reuters, March 7, 2023
• “Over the course of the 12-year term of this grant, the project is estimated to grow the state’s economy by $1.6 billion. … Because Siemens Mobility chose a site in Davidson County, classified by the state’s economic tier system as Tier 2, the company’s JDIG agreement also calls for moving $626,300 into the state’s Industrial Development Fund – Utility Account. The Utility Account helps rural communities finance necessary infrastructure upgrades to attract future business. Even when new jobs are created in a Tier 2 county such as Davidson, the new tax revenue generated through JDIG grants helps more economically challenged communities elsewhere in the state.” – North Carolina Department of Commerce, March 7, 2023

Official supporting statements

• North Carolina Gov. Roy Cooper: “Leading global companies like Siemens Mobility continue to choose North Carolina to build the next generation in innovative clean transportation. Thanks to our state’s skilled workforce, and the proven education and training systems that help people maintain and build those skills, North Carolina is the number one state for manufacturing.” – North Carolina Department of Commerce, March 7, 2023
• North Carolina Commerce Secretary Machelle Baker Sanders: “North Carolina’s manufacturing workforce has earned its global reputation for excellence. … I lead a department that puts people and talent development front and center, and we’ll continue to invest in the workforce development and training programs that have earned us the respect of CEOs around the world.” – North Carolina Department of Commerce, March 7, 2023
• North Carolina Sen. Steve Jarvis (R): “We could not be more excited to welcome this high-tech manufacturing facility to our community. … Siemens enjoys a stellar reputation and their vote of confidence in Davidson County, the City of Lexington, and in North Carolina makes us very proud indeed.” – North Carolina Department of Commerce, March 7, 2023
• North Carolina State Rep. Larry Potts: “Economic development projects of this scale require a great deal of collaboration between many people and organizations, both in the local area and across the state. … Lexington and Davidson County welcome Siemens Mobility to North Carolina, and all of us will help its leaders and employees find success in our state.” – North Carolina Department of Commerce, March 7, 2023
• Lexington Mayor Jason Hayes: “It’s a game changer for our community, especially one that’s been hit by textile and furniture jobs that have left. … We’ll have folks that want to stay here, want to live here, want to raise their families here and with those living wage jobs, it makes it all the more attainable.” – Queen City News, March 8, 2023

Selected clips

• “Gov. Roy Cooper announces Siemens Mobility to bring 500 new jobs to North Carolina” – WXII NBC12, March 7, 2023

* Correction, June 16, 2023: This article has been corrected to accurately reflect that the Siemens Rail Car Factory is investing $220 million to build the Lexington manufacturing plant.