MK Rail at
Cedar Rapids, IowaMorrison–Knudsen established a separate rail systems division in 1972. Initially, the company rebuilt locomotives, such as the four
Delaware & Hudson ALCO PAs. It rebuilt four
Southern Pacific GE U25Bs with a
Sulzer V-12 prime mover. These locomotives, designated
M-K TE70-4S, operated from 1978 to 1987. built locomotives, originally under its own name and later under subsidiary MK Rail from 1994 to 1996, such as the
MK5000C and the
F40PHM-2C. Its Australian operation, based in
Whyalla,
South Australia, rebuilt 17
CL and eight
AL class locomotives for
Australian National and six
DE class locomotives for
BHP in the 1990s. Morrison–Knudsen spun-off MK Rail in 1993; it became a publicly traded company in 1994. After Morrison–Knudsen's bankruptcy in 1996 the company renamed itself
MotivePower. The company merged with
Westinghouse Air Brake Company in 1999 to form
Wabtec. MotivePower is now a wholly owned subsidiary of Wabtec. The
CTA 3200 series and
Metro-North M6 "Cosmopolitan" cars were built by MK in 1992–1994. After winning a contract to build 80
Bay Area Rapid Transit C2 cars, the company opened a third assembly site in
Pittsburg, California, in 1993. MK also built
Metra gallery cars, Amtrak
Viewliner I sleeping cars, the Caltrans
California Cars (1994–1996) and other rail passenger cars and By 1995, Morrison–Knudsen was facing bankruptcy, with more than 60% of the company's previous-year net loss of $350 million occurring in the MK Transit division. A special purpose company, named
Amerail (American Passenger Rail Car Company), was formed so that Morrison–Knudsen could divest itself of this loss-making division, while also allowing the remaining MK Transit contracts to be completed. The new company was funded by Morrison–Knudsen's creditors, led by the
Fidelity and Deposit Company in
Baltimore, and was headquartered in
Chicago. The Pittsburg site was transferred to
Adtranz in December 1995, following completion of the BART C2 cars. After this transfer, the site was used for overhaul of the older BART
A and B cars. Morrison–Knudsen had also bid on this contract, but lost out to
AEG Transportation Systems (who were then acquired by
Daimler-Benz, becoming part of Adtranz shortly after). The Hornell site was bought by
GEC-Alsthom in July 1997, following unsuccessful attempts at a joint venture to bid on new contracts. The final site in Chicago closed in mid-1998, when work on contracts for
Metra was completed. ==Financial difficulty==