Workers roll out new steel wheels for rail cars at FreightCar America in 2011. Layoffs at the plant are scheduled to begin Sept. 20.
Two hundred people will be rendered jobless with the closing of FreightCar America in Roanoke this fall, Mayor Sherman Lea said Monday.
The rail car maker announced it could save $5 million a year by shifting the work to an Alabama plant where the company has invested for growth. By Nov. 11, 14 years of production at the former Norfolk Southern East End Shops on Campbell Avenue will cease for good, the company said.
FreightCar has laid off workers and called them back in the past. This is different.
“The plant closing should be considered permanent, and employees should not count on being recalled to employment with the Company,” a letter to Lea said.
The job cuts are scheduled to start Sept. 20.
FreightCar said it had notified Local 6016 of the Brotherhood of Railway Carmen, which represents some affected employees. Donnie Davis of Roanoke, its chairman, said the news hit hard
“Nobody takes it good that you’re going to lose your job,” he said.
Davis said FreightCar pays its Roanoke workers an average hourly wage of $20 to $21. He added that he expects severance packages to be negotiated for those who stay until the end.
“There’ll probably be some that ride it out, some that may not be able to. It’s just kind of on how their lifestyle and finances and emotions and all are,” Davis said.
The staff includes men and women skilled in the duties of heavy manufacturing, such as welder, fitter and maintenance, he said.
Citing a drop in orders, FreightCar CEO James Meyer told investors May 2 that “our results aren’t anywhere near where we want them to be.”
FreightCar lost $14.2 million on revenue of $70.7 million during the first three months of the year. Company stock is trading near its 52-week low of $5.21 per share, according to Google Finance.
Company officials notified workers Monday, said Lea, who spoke by phone with FreightCar officials Monday as well.
“I asked, was there anything we could do in Roanoke?” Lea said. “They said, no, Roanoke was fine. They just said overall for their business, it was better to close here and go to Alabama.”
The closure of the Roanoke factory will leave FreightCar with one production site, in Cherokee, Alabama. It is five and a half times as large as the Roanoke plant, a company regulatory filing said. The company delivered 4,214 rail cars last year, a drop of nearly 5% from 2017, a filing said.
The Roanoke plant received more work when FreightCar closed a Pennsylvania factory in 2007. The East End shops had been vacant since 2000 when FreightCar leased the location in 2005. Employment reached as high as 450, Davis said.