CHICAGO FreightCar America Inc. has subleased roughly 25 percent of Navistar International Corp.s Cherokee, Ala., manufacturing facility.
Opened in 2008 in the Shoals region of Alabama, the space is effective for building a variety of rail car types, FreightCar president and chief executive officer Ed Whalen said.
The company is preparing the plant for production, with the first deliveries of new rail cars expected in the second half of the year. When fully operational, the facility will be able to build more than 7,000 rail cars annually.
The company signed agreements with Navistar for the supply of parts and production support services, and the purchase of production equipment at the Cherokee plant. FreightCar will invest up to $23 million to redesign and equip the facility.
We continue to expand our rail car product and service offerings outside of our traditional coal car market. While our existing facilities will continue to support our coal products, the Alabama facility will allow us to produce a broader variety of rail cars, Whalen said. The facility layout, automated production equipment, proximity to key suppliers and new supply agreements will increase our flexibility and make us more competitive in the marketplace.
FreightCar Americas net income totaled $19.1 million last year, nearly quadruple that of 2011, on revenue that jumped 39.1 percent to $677.4 million.