The Fall of the Budd Company, 1978-87
By the late 1970s, only two American builders of passenger railway cars remained. ACF produced its last passenger car in 1959 (the NYCT R28) and St. Louis left the business in 1974 after the trouble-plagued R44s were built.
The last surviviors were Pullman Standard of Chicago and the Budd Company of Philadelphia. By 1978, Pullman was already on the brink of collapse after the controversy and lawsuits over the faulty Rockwell trucks on the NYCTA's R46 cars. Pullman went bankrupt in 1982. At Budd, 492 Amfleet cars were being built from 1975-78 for Amtrak's Northeast Corridor. New Jersey Department of Transportation had ordered 230 Arrow III electric MU cars for the Morristown Line, to be delivered in 1978. These cars would be similar to the 1975 Arrow II (SEPTA's Silverliner IV) and would have GE electrical equipment.
Next came in 1980-81, when Chicago Transit Authority ordered 300 cars (2600 series). This order would later be increased to 600 cars and CTA's second largest single-car order (after the 6000 series).
In 1979, Budd tried to recapture a market it was successful two decades earlier. The SPV was introduced. It was a self-propelled diesel passenger vehicle thatintended as as follow-up to the RDC of the early 1950s. It never sold well and only few orders were placed. Today some can still be found as trailer coaches on Shore Line East.
What was wrong? It was a novel idea. The SPV looked odd, to say the least. It was based on the Amtrak Amfleet body which in turn is derived from the Penn Central Metroliner of 1968. They were not reliable and Metro-North retired its SPVs in the early 1990s. Budd could have been better off if the SPVs were based on the Arrow III MU design, a successful design that still works to this day on NJ Transit.
In 1982 Budd bidded on the R62 orders of NYCT IRT cars. Budd lost the low bid on 325 cars to Kawasaki, but lower on all 1,150 cars (R62A). Kawasaki took the 325 cars. When the second 825-car R62A order was bidded, Bombardier's price and Canadian government financing gave Budd hard competition and Bombardier won the 825 cars.
Baltimore Metro and Miami Metrorail ordered cars from Budd, to be delivered in 1984. Metro-North and Long Island Rail Road ordered M-3s (a follow-up to the M-1).
But foreign competition was getting too hard. Kawasaki, Bombardier, Alstom and Nippon-Sharyo were able to build more cars at lower prices and have more modern production facilities. Their global market allowed them to sell more cars around the world.
In early 1987, as the CTA 2600-series delivery wraps up, the Budd assembly plant in northeast Philadelphia closes. Budd leaves the passenger car market, leaving only one American company-Morrison Knudsen, whose Hornell, NY shops would be aquired by Alstom in 2000.