AAI begins $71 million rail car job; Hunt Valley company doing overhaul work for N.J. Transit; Additional hires planned; Goal is to move away from defense contracts, into commercial work; Area contracts


AAI Corp. of Hunt Valley began work this week on a $71 million contract to overhaul commuter rail cars for the state of New Jersey, a major award for the company that will bring in 145 new jobs.

AAI beat Amtrak and Bombardier Inc. of Canada in the competition, serving notice that AAI intends to be a player in rail car overhaul.

"This is a very, very large win for us," said Jack Bell, the company's senior vice president for transportation systems. "There's no question this is a major steppingstone to our stated objective of being the leader in the U.S. for the overhaul of rail passenger cars."

Awarded by the New Jersey Transit Authority, the contract involves the overhaul and upgrade of 116 Comet II commuter rail cars. AAI must deliver the first reconditioned car in nine months and the last in 20 months, a schedule that Bell called "very ambitious."

The contract includes an option for work on 45 additional cars that could be worth an additional $30 million.

To handle the new work, AAI will retool and refurbish a 230,000-square foot facility at its campus off York Road. The company has about 160 employees working on transportation systems and plans to hire 120 skilled laborers and 25 management workers, which Bell said it must do quickly.

"We have sort of a love-hate relationship with our human resources department right now," he joked. The win was a big boost for the company's efforts to move out of defense work and into more reliable commercial markets. It is in the midst of assembling new trolley buses for San Francisco and Metro cars for Washington, and is overhauling people-mover rail cars for Chicago's O'Hare International Airport.

The New Jersey contract is by far the biggest overhaul job AAI has undertaken. "It will position us for jobs of this magnitude and complexity in the future," Bell said.

February has been a good month for AAI's 1,400 employees. The company's Engineering Support Inc. unit won a $14.3 million contract last week for support of command, control, communications, computers and intelligence training devices for the Army. The one-year job includes options for four more years that could push the total value to $64 million.

AAI had performed similar jobs, but the Army decided to bundle several smaller contracts into one award. The Engineering Support unit will lead several subcontractors in providing technical services at 53 Army sites worldwide, including the United States, South Korea, Germany and Italy.

Shares of AAI's parent company, United Industrial Corp. of New York, fell 12.5 cents to $9.125 yesterday.

Pub Date: 2/17/99

An article in yesterday's Business section should have stated that AAI Corp. of Hunt Valley is seeking to diversify into commercial markets in addition to defense contracting, not that the company is moving out of defense. The Sun regrets the errors.
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