Wabtec and Progress Rail said today that they have reached a settlement in the antitrust case that Progress Rail brought against Wabtec in 2023.
In the suit, Progress Rail argued that its larger rival engaged in anticompetitive behavior and should have to divest its acquisition of GE Transportation. The 2019 GE acquisition, Progress Rail said in its lawsuit filed in the U.S. District Court in Delaware, tipped the competitive balance in favor of Wabtec. Wabtec was already the sole supplier of key locomotive components, Progress Rail says, while GE Transportation was the dominant locomotive manufacturer.
“The parties agree that this settlement is best for both companies, customers, and consumers, and the prospect of additional litigation is not in anyone’s interest. There is no admission of liability,” the locomotive manufacturers said in a joint statement today. “The two companies acknowledge that they have been and remain suppliers of long-haul freight locomotives and cab components, including Tier IV long-haul locomotives, to Class I Railroads and other customers.”
While the GE Transportation acquisition was under regulatory review, Progress Rail and Wabtec reached an agreement covering joint development, compatibility, and interchangeability matters. The companies later reached an agreement covering interoperable electronic train management systems, which would allow the Wabtec PTC system to be compatible and integrated with Progress Rail’s electronic train management system.
“Wabtec’s professed commitment to ‘open competition,’ ‘integration,’ and compatibility, however, was hollow and instead it has used its dominant market position to engage in anticompetitive exclusionary conduct that has harmed and continues to harm competition and consumers,” Progress claimed in its suit.
Progress cited a long list of Wabtec’s dominant positions in key locomotive markets.
Wabtec has manufactured about 75% of the active long-haul freight locomotives in North America and about 90% of new long-haul locomotives that comply with Tier 4 emissions regulations. It also is the dominant supplier of locomotive energy management systems, with Trip Optimizer holding a 79% share of the market, and its Locotrol distributed power system holding nearly 100% of the market. Wabtec’s Interoperable Electronic Train Management System, commonly called I-ETMS, is installed on virtually all freight locomotives.
In a statement released after the suit was filed, Wabtec said it would vigorously defend itself.
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And it used to be the other way around — where Progress (then EMD) was by far the dominant manufacturer.
Yes, EMD had the lion’s share of the locomotive market up until the 1990s. GE knew it was the underdog so they had a major decision to make. Stay in the market or exit altogether. They decided to stay in the market and to improve the products they were offering. To cut the cost of production, GE changed their manufacturing process completely by initiating a modular design concept. They also got serious about fuel efficiency. Progress Rail has caught up on some aspects of their product in the past few years but WABTEC is currently dominant.