Rail car builder idling Pa. plant in sagging mart

Dec 19, 2007 | 02:44 PM | Maria Guzzo

A conflict with a trade union has led FreightCar America Inc., Chicago, to close its Pennsylvania manufacturing facility.

The rail car manufacturer said the shuttering of its 390-employee Johnstown, Pa., plant is an effort to optimize production at other, lower-cost manufacturing facilities. FreightCar's administrative offices in Johnstown will remain open, but most of the plant's union work force has already been laid off.

FreightCar said it expects to record a fourth-quarter restructuring and impairment charge of about $34.3 million related to the closure.

Christian Ragot, FreightCar America's president and chief executive officer, said the Johnstown manufacturing plant is a higher-cost facility than the company's other locations. "It is critical for us to take full advantage of our lower-cost manufacturing facilities in order to produce our rail cars with a competitive cost structure," he said. "Although we entered into decisional bargaining with the union representing our Johnstown employees regarding labor costs at the Johnstown facility, we and the union did not reach an agreement that would have allowed us to continue to operate the facility in a cost-effective way. We will continue to focus on strategic initiatives and cost control to remain competitive despite a....