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Wednesday, January 12, 2005

Deal gives rail shops new tenant

Gov. Mark Warner is expected to announce tonight that FreightCar America will lease part of Norfolk Southern's East End Shops in Roanoke.

Norfolk Southern is expected to lease a portion of its East End Shops in Roanoke to Illinois-based FreightCar America, which will build aluminum rail cars here, sources close to the deal have told The Roanoke Times.

Gov. Mark Warner plans to announce the deal in his State of the Commonwealth address tonight before the General Assembly.

"The governor is expected to make economic development announcements for Roanoke, Patrick County and Henry County," said Ellen Qualls, Warner's press secretary.

The East End Shops have been mostly idle for nearly five years. It is still unknown how many jobs may be created or how many rail cars will be manufactured in Roanoke.

FreightCar America and NS declined comment.

The shops, in their heyday, buzzed with hundreds of union workers, many of whom spent the better part of their lives building and overhauling cars and locomotives. Stretching from Third Street to 14th Street Southeast, the shops were the heart of the railroad's local operations.

The people who worked there - nearly 3,000 at peak employment decades ago - were the city's lifeblood. The workers always touted the East End Shops as the best in the country.

In 1999, railroad jobs paid an average of $700 a week, while the average weekly salary of other workers in the valley was $539.

By 2000, NS had to make changes to boost profits and restore confidence among shippers. Part of its strategic plan required a work-force reduction. On the management side, at least 1,450 employees systemwide accepted buyouts.

The shops have been idle since August 2000, when carmen and signalmen became the latest employees to "hit the streets," railroad language for being put out of work. The jobs of 55 signalmen were abolished and 228 carmen were laid off indefinitely at that time.

NS continued its layoff of Roanoke workers in November 2000, letting go of 27 union workers at its car part rebuilding shop and the last remaining foundry owned by a railroad. In May 2001, NS closed the shop where union workers refurbished car parts, including brake beams.

Norfolk Southern today has 1,398 workers overall in the Roanoke area, almost 800 fewer than it did in 1998.

Union workers said they were victims of mistakes made by NS in 1999 when it took over part of Conrail.

NS officials have never blamed the job cuts on the costs associated with Conrail. Instead, they blamed revenue losses, high diesel prices, a weak export coal market and a lack of work in the Eastern region, including Virginia.

FreightCar America does not currently have Virginia operations. But it is no stranger to American Electric Power, the dominant supplier of electricity in Southwest Virginia.

In November 2003, FreightCar America, then called Johnstown America, delivered 1,250 aluminum, coal gondola cars to AEP, completing its largest car order of the year.

Aluminum cars, which are corrosion-resistant, will lower operating costs, according to FreightCar America's Web site. They can last up to 50 percent longer than steel cars and they lower car repair or replacement costs, the company said.

Staff writer Michael Sluss contributed to this report.

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