What do manufacturer Electro-Motive Diesel (EMD) and 1970's band Grand Funk Railroad have in common? They both do the locomotion! EMD designs, builds, sells, and services diesel-electric locomotives for commercial railroad applications: commuter, freight, intercity passenger, mining, and switching. It has the largest installed base of diesel-electric locomotives in the world, with products sold in more than 100 countries. EMD also supplies locomotive replacement parts and diesel power engines for marine propulsion, oil drilling rigs, and power generation. Founded in 1922 as Electro-Motive Engineering, EMD was acquired by Caterpillar from Greenbriar Equity and Berkshire Partners for about $820 million in mid-2010.
EMD is now a wholly-owned subsidiary of Caterpillar's Progress Rail Services. Its acquisition is part of Caterpillar's plan to grow its presence in the rail industry by providing rail and transit customers with a greater slew of locomotives, engines, and replacement parts, as well as support services.
EMD is likely to benefit from its parent's name and reputation, allowing it to compete better against bigger companies like General Electric's transportation business, its main rival in North American locomotive manufacturing. In hopes of taking some market share from GE, EMD is pushing installation of upgrade packages on older locomotives. Replacing the original diesel engine, the package features a microprocessor-controlled locomotive engine technology that is designed to reduce emissions and maintenance costs, improve fuel efficiency and reliability, and extend the service life of the unit. In recent times EMD has introduced the upgrade on California Department of Transportation's Amtrak passenger trains and Kansas City Southern locomotives and road switchers.
The company is also guarding its long-held international relationships, particularly in the Middle East. In mid-2010 it entered into a partnership with Egypt-based Aman Trading and Engineering (AT&E) to provide products to the Egyptian National Railways (ENR). In 2009 the company delivered 40 passenger locomotives to ENR, a customer since the 1950s. Elsewhere in the region, the locomotive manufacturer entered into an agreement in 2010 with Mohawarean Group to create a joint venture to provide maintenance, rebuild, and overhaul (MRO) services throughout Saudi Arabia to Mohawarean's Railway Services subsidiary. EMD also inked a deal to supply the Saudi Railway Company with 25 heavy-haul AC diesel electric locomotives.
Other international customers include Transnet Rail Engineering (TRE) in South Africa, which has booked 50 locomotives. The deal calls for more than 40% of the locomotive parts to come from South Africa and for joint assembly by EMD and TRE employees. The company also continues to provide parts and transfer technology to Indian Railways, which is increasing its capacity to manufacture diesel locomotives.
To the west, the company launched a new facility in Mexico in 2010 for the maintenance, rebuild, and overhaul of traction motors and other electrical equipment. With environmental concerns a growing part of business worldwide, EMD partnered with Norfolk Southern Railway to conduct testing on biodiesel fuel for locomotive applications. Biodiesel is a renewable fuel that reportedly reduces harmful emissions. – less