Siemens Transportation Systems Inc. has just signed three railcar construction contracts worth $95 million for its South Sacramento plant.

And a Spanish company hired to build up to 56 light-rail cars for Regional Transit's newest light-rail lines is about to begin building 40 cars at McClellan Business Park.

The three new Siemens orders won't boost the work force at the company's 450-person plant on French Road, said Jeff Puma, Siemens' local spokesman, but they will prevent further layoffs. The new contracts order 22 cars for St. Louis' extended system by 2004; 11 cars for San Diego's Mission Valley rail extension; and three more cars for the $140 million contract Siemens won a year ago to build a light-rail system for Houston.

Meanwhile, CAF USA Inc. is hiring locally. The North American subsidiary of Madrid, Spain-based Construcciones y Auxiliar de Ferrocarriles S.A. will hire 80 to 100 workers for its 50,000-square-foot test and assembly plant at McClellan, said company spokeswoman Virginia Verdeja.

"For the past six months we've done a lot of work preparing for this," Verdeja said. "We will hit the ground running."

The company will introduce itself formally at an open house on May 30. It plans to display one of its light-rail cars, newly delivered from one of the company's manufacturing plants in Spain.

Coming up -- the `burn test': CAF will hire the new employees as the plant ramps up, Verdeja said. Beginning in September, the location is scheduled to roll out two to four cars per month, said Regional Transit spokesman Mike Wiley.

Forty cars are due by September 2003, when Regional Transit's new South line from downtown to Meadowview is due to open. Two months later, the district's light-rail line along Highway 50 will open as far as Sunrise Boulevard.

That line is due to reach Folsom by December 2004, a year later than planned. Unexpected environmental mitigation for wetlands and elderberry bushes near a planned light-rail maintenance facility delayed the projected opening date.

CAF was originally set to start light-rail car production here six months ago, Wiley said. Despite the delay, the delivery schedule had enough float for the company to meet Regional Transit's need for new cars, he said.

The first three cars, delivered in coming weeks, will arrive fully assembled, said Wiley. Regional Transit will then "burn test" them to see if they last 1,000 miles without repairs. If they fail, the company will make repairs. The tests will be repeated until the cars make 1,000 miles without needing repairs.

Cars made at McClellan will start as shells delivered from Spain. Local crews will put the shells on the "trucks," or chassis and wheels, and add seats, air conditioning and electronics. Then they'll run them through tests.

Siemens had laid off hundreds: Siemens Transportation Systems, which opened a South Sacramento plant in 1984 to build railcars for Regional Transit, announced last October that it was beginning six months of layoffs because of a drought in its rail-building jobs predicted by this summer. At that point the company said it would lay off 200 part-timers and 50 full-timers, leaving 800.

Apparently the cuts ran much deeper. As of this week, Siemens employed 450 full-timers, said Puma, and another 50 at its North American headquarters on Tribute Road.

`Sure, there's room for two': When it won Regional Transit's latest car contract, CAF was following the local Siemens model. And like Siemens, the Spanish company hopes to use its McClellan plant to build railcars for other contracts it hopes to win in North America.

CAF also has U.S. plants in Hunt Valley, Md., and Elmira, N.Y. The Maryland plant is doing test and assembly for 192 metro railcars for the Washington, D.C., system, fulfilling a contract won in 1998. It is also building 28 new light-rail cars and rehabilitating 55 others for the Port Allegheny Authority in Pittsburgh, for a pact it won two years ago.

Art Bauer, a Sacramento-based transportation consultant, expects there will be enough market demand for light-rail construction pacts in the years ahead for both Siemens and CAF.

"Sure, there's room for two," Bauer said. "But that's not to say one isn't going to get knocked out."

To compete, he added, both companies must offer a variety of railcars to cities wanting different transit modes -- light rail vs. heavy rail, for example. And their management has to be keen to keep the work profitable.

Neither company discloses their revenue or profit levels. "These things are expensive, but the margins are thin," Bauer said. "And CAF has to overcome the reputation of Siemens."

CAF is based in Madrid and has plants in Beasain, Zaragoza and Irun, Spain. It began expanding worldwide 10 years ago. It has three subsidiaries in addition to the local plant, in Argentina, Brazil and Mexico. In business for more than 100 years, the company builds light-rail cars, commuter trains and passenger coaches, as well as wheels and axles. Its clients include transportation systems in Hong Kong, Mexico, London; São Paulo, Brazil; Madrid and Barcelona, Spain; and Washington, D.C.

Manufacturers take a look: Barbara Hayes, executive director of Sacramento Area Commerce and Trade Organization, which attempts to lure businesses into the local economy, said manufacturing companies make up 30 percent -- the biggest category -- of her current prospect list.

They aren't usually as big as Siemens or CAF, though. Hayes said three small manufacturing companies, one of them a steel fabricator, are negotiating for possible moves to the capital region.

The prospects are increasingly out of state, she said, from locations including the Pacific Northwest and the Midwest.