by bwparker1
Source: Trains NewsWire
JOHNSTOWN, Pa. - Freight car manufacturer FreightCar America announced today that it will close its manufacturing facility located in Johnstown, Pa., which employs approximately 390 employees. The action does not involve a closure of the company's Johnstown administrative offices. Chris Ragot, president and chief executive officer, said in a news release, "It is critical for us to take full advantage of our lower-cost manufacturing facilities in order to produce our railcars with a competitive cost structure. Our Johnstown, Pa., manufacturing plant is a higher-cost facility than our other locations. 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 challenging railcar market."
The company estimates that it will record a pre-tax restructuring and impairment charge during the fourth quarter of 2007 of approximately $34.3 million in connection with the closure of the Johnstown facility. The company expects the manufacturing capacity at its other two plants, in Danville, Ill., and Roanoke, Va., to be sufficient to meet its requirements for the next several years.
JOHNSTOWN, Pa. - Freight car manufacturer FreightCar America announced today that it will close its manufacturing facility located in Johnstown, Pa., which employs approximately 390 employees. The action does not involve a closure of the company's Johnstown administrative offices. Chris Ragot, president and chief executive officer, said in a news release, "It is critical for us to take full advantage of our lower-cost manufacturing facilities in order to produce our railcars with a competitive cost structure. Our Johnstown, Pa., manufacturing plant is a higher-cost facility than our other locations. 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 challenging railcar market."
The company estimates that it will record a pre-tax restructuring and impairment charge during the fourth quarter of 2007 of approximately $34.3 million in connection with the closure of the Johnstown facility. The company expects the manufacturing capacity at its other two plants, in Danville, Ill., and Roanoke, Va., to be sufficient to meet its requirements for the next several years.
