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Not sure if Hunter or I responded but the short answer is that I don't think
there is an opportunity for Talgo to sell non-HSR train sets in the U.S. in
the short term. They just got an order for more train sets in the Northwest
and I don't think they are able to sell trains elsewhere in the U.S. The
HSR/next generation train opportunity is really their only opportunity for
expansion in the U.S. as they are only able to sell their current train
sets in the Northwest due to a waiver/exemption from U.S. law. Isn't this
correct, Hunter?

On Wed, May 19, 2010 at 3:37 PM, Abel Navarro Homet <
abel@transatlanticeg.com> wrote:

> Do you think it would it be possible to arrange a paralell contract is
> which basicly we could get an incentive fee in case we manage to give them a
> contract for the trains that they are already selling in the US(just regular
> trains not HSR) ?
>
> Enviado desde mi BlackBerry® de Vodafone
> ------------------------------
> *From: * Eric Schwerin <eschwerin@rosemontseneca.com>
> *Date: *Wed, 19 May 2010 15:11:17 -0400
> *To: *Abel Navarro Homet<abel@transatlanticeg.com>;
> darcher@rosemontseneca.com Archer<darcher@rosemontseneca.com>;
> LorenzoRoccia<lorenzo@transatlanticeg.com>
> *Cc: *Michael Muldoon<mmuldoon@rosemontseneca.com>; Hunter Biden<
> hbiden@rosemontseneca.com>; Rob Walker<rwalker@rosemontseneca.com>;
> NeilCallahan<ncallahan@rosemontseneca.com>
> *Subject: *Talgo Call Recap
>
> All-
>
> Hunter and I talked to Antonio and Nora at Talgo yesterday and it was well
> timed after Hunter's lunch with Stephen Gardner at Amtrak who was able to
> give Hunter some good .
>
> The short of it is they want to hire us at $15K a month for a year. If
> after a year, we are both happy with the relationship and are able to
> position them to compete in the U.S. market, we can discuss an expanded
> "success" and "partnership" related relationship.
>
> They have two main issues. 1) The 100% Buy American provisions of ARRA
> which would not allow their trains assembled in WI to be eligible for
> purchase for HSR projects. Their trains are 60% American. We believe that
> the FRA will ultimately rule that the 100% buy American provisions will be
> on a graduated scale - starting now at the 60% for Talgo and allowing
> companies 10 years to get to 100%. We need to help Talgo position
> themselves and develop a strategy for them to make sure this graduated
> "compromise" is implemented by FRA. We made it clear we won't be lobbying
> at all though. We can talk to Amtrak, labor unions, and others as part of
> the process though and gather intelligence. 2) They need to work to get to
> a place where they comply with PRIIA Sec. 305 which in essence mandates
> interoperability and "interserviceability" of HSR trains in the U.S.
> Similar to Europe. This is really the most important thing to Talgo's
> prospects in the U.S. - more important than #1, although they believe #1 is
> more important than #2.
>
> We think the prospects of being successful on #1 are pretty good assuming
> we can manage Talgo and not allow them to get too far off the reservation.
> If so, Talgo will be better positioned than most foreign train
> manufacturers to compete for HSR contracts as they already have the U.S.
> facility, have already sold to Amtrak and are a known quantity. From our
> information gathering, the other manufacturers either already have a stable
> of high-priced consultants/equity partners or stand very little chance of
> competing and winning contracts down the road. Talgo offers us money on the
> table now with the chance of being successful down the road and being their
> only partner in this effort should we mutually decide to move forward in
> more of a partnership type arrangement after the year-long contract is over.
>
> As we have all discussed will take a lot of work to manage the client
> relationship and while we emphasized that there is a larger team beyond
> Hunter, in reality if we are only focusing on the two issues above, the work
> for the larger team will be minimal in this first year of the relationship.
>
> Given all of the above, we think we should accept their proposal.
>
> We should get back to them fairly quickly, so let us know your thoughts.
>
> Best,
>
> Eric
>
>
>
>
>
> Eric D. Schwerin
> Rosemont Seneca Partners, LLC
> 1010 Wisconsin Ave., NW
> Suite 705
> Washington, DC 20007
> (202) 333-1880
> eschwerin@rosemontseneca.com
> *P** **Consider the environment before printing this email.*
>
>


--
Eric D. Schwerin
Rosemont Seneca Partners
(202) 333-1880
eschwerin@rosemontseneca.co