The Commercial-News, Danville, IL

Local News

February 21, 2013

FreightCar to open Alabama site

Hays: Plans won’t affect local plant

DANVILLE — FreightCar America’s announcement earlier this week that it will start manufacturing railcars in Alabama this summer has raised questions about how it will affect the local FreightCar America facility.

When asked Thursday morning what FreightCar’s plans in Alabama might mean for the local facility, President and CEO of Vermilion Advantage Vicki Haugen, said it was “nothing I can comment on.”

“They’re diversifying, which is a smart thing for a company to do,” she said.

State Rep. Chad Hays (R-Catlin), who was in Springfield on Thursday, said it is his understanding that FreightCar’s new Alabama facility will not affect the Danville railcar assembly plant at 2313 Cannon St.

“The business of FreightCar is cyclical, and the Danville plant primarily makes coal cars which are heavily dependent on what the coal industry is doing,” he said. “The dynamic in Alabama doesn’t have anything to do with what Danville does.

“The Alabama situation is the company’s efforts to diversify.”

Less than two weeks ago, all of the employees at the Danville facility received WARN Act letters, stating that the company “anticipates changes and when finalized, could be permanent.”

Those changes are expected to take place sometime between April 23 and 29. Various dates were given in the WARN Act letters depending on where a worker is positioned on the production line.

The Illinois Worker Adjustment and Retraining Notification (WARN) Act requires employers to provide 60 days advance notice of pending plant closures or mass layoffs. The law applies to businesses with 75 or more employees, excluding part-time employees.

FreightCar America employs approximately 250 people in Danville. The company and UAW Local 2419 agreed in October to a one-year extension of the union’s contract.

Senior Vice President of Human Resources Tom McCarthy at FreightCar America’s corporate headquarters in Chicago has said the Danville facility does not have any orders for new railcars lined up past mid- to late April and blamed the depressed coal market.

“What everyone is hoping for is more orders and more business,” Hays said.

Mayor Scott Eisenhauer said he was “willing to meet with anyone to identify why these (FreightCar) jobs are important to the community.”

“I’m willing and desirous to sit down and talk to everyone and anyone to make sure those jobs stay in the community and the work stays here,” he said.

McCarthy did not immediately return a phone message seeking comment on Thursday morning, nor did Ed Andress, general manager of the Danville facility.

FreightCar America announced on its website Tuesday night that it entered into a long-term lease to occupy approximately 25 percent of Navistar, Inc.’s mile-long Cherokee, Ala., manufacturing facility that opened in 2008. The state-of-the-art production site is designed to efficiently build a wide variety of railcars.

According to the company’s website, FreightCar expects the first new railcars to roll off the production line in Alabama as early as the second half of 2013.

FreightCar America plans to invest up to $23 million to equip the Alabama facility, and once fully operational, the site will be FreightCar’s primary facility for manufacturing non-coal car product and will have the capacity to build more than 7,000 railcars a year.

A news report in the Decatur (Ala.) Daily quoted Terry Heidkamp, senior vice president of operations for FreightCar, saying that the company hopes to begin production in July and have 200 workers at the Alabama facility by the end of the year, with a total employment of 400 at the plant by the end of 2014. FreightCar officials also hope to have employees trained and working on-site in Alabama in May.

In 2010, FreightCar America expanded when it acquired DTE Rail Services. As part of that acquisition, FreightCar America took over four railcar repair shops, including one in Clinton, Ind.

FreightCar America, Inc. manufactures coal-carrying railcars. It supplies railcar parts, leases freight cars through its JAIX Leasing Company subsidiary and provides railcar maintenance and repairs through its FreightCar Rail Services, LLC subsidiary.

In addition to coal cars, FreightCar America designs and builds bulk commodity cars, flat cars, mill gondola cars, intermodal cars, coil steel cars and motor vehicle carriers. It is headquartered in Chicago and has facilities in Danville; Clinton, Ind.; Grand Island, Neb.; Hastings, Neb.; Johnstown, Pa.; Lakewood, Colo.; and Roanoke, Va.

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