Kinkisharyo International Inc., which plans to open a Palmdale factory to build light rail cars, is moving its U.S. headquarters to El Segundo from Masssachusetts, according to a Friday news report.

The company, a subsidiary of Kinki Sharyo Co., Ltd., of Osaka, Japan., began moving this summer into a 5,000-square-foot space in the South Bay city from Westwood, Mass., where it has had its U.S. headquarters since 1985, according to the report in the Torrance Daily Breeze.

The move follows a decision in July by the L.A. County Metropolitan Transportation Authority to exercise two options on an earlier contract with Kinkisharyo. The options, valued at $397 million, call for Kinksharyo to build 97 new light rail vehicles for the Crenshaw/LAX Line and to replace older Metro cars.

Kinkisharyo traditionally performs final assembly of rail cars in the United States near where it delivers cars – including to systems in Boston, Dallas and San Jose– but Kinkisharyo International President Teiji Tani said the size of the L.A. order means the company will do more extensive work at the Palmdale factory.

“It’s a very big deal. In addition to it being a significant increase in the number of cars we are contracted to build, the execution of these two options triggers a commitment that we made last year to construct the actual car shells in the United States,” Tani said in an email to the newspaper.

“We are moving our U.S. headquarters because we believe in Los Angeles and believe that this location will give us great opportunities to grow our business,” he added.

In April 2012, Kinkisharyo received an $891 million railcar contract from the transportation authority to deliver 235 cars for use on the region’s expanding Metro light-rail network. The first 28 cars are scheduled for delivery by the end of 2015.

Kinkisharyo is in negotiations to lease hangar space for its local plant on Site 9, a 307-acre parcel in Palmdale owned by Los Angeles World Airports, the L.A. city agency that operates Los Angeles International Airport.

The Business Journal reported last month that Kinkisharyo was looking to hire more than 150 employees for the Palmdale facility, including manufacturing engineers, production supervisors, mechanical and electrical quality control inspectors and technicians, and master schedulers.

The Daily Breeze reported that the facility may employ 250 workers.

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