The market for new locomotives will drop off steeply in 2010 as the amount of new orders being placed dries up, according to a senior official from GE Transportation.
The company expects locomotive production at its US manufacturing plant to drop by around 44% in 2009 to 485 units followed by an even steeper fall of 50% or more in 2010 as the builder primarily works off its order backlog, GE Transportation officials recently told Dow Jones Newswire.
GE Transportation president and chief executive officer Lorenzo Simonelli said that no US customers are purchasing right now.
"North America, from the standpoint of purchasing locomotives, is not moving," Simonelli said.
"In addition, the drops in freight volumes from negative 20% to negative 16% don't do much for a manufacturer."
GE has, however, indicated that the drop is only a consequence of the poor near-term economic environment and the company is optimistic about the transportation sector and rail industry over the long term.