FreightCar America announces $10M Colbert County expansion, 150-200 new production jobs

CHEROKEE, Alabama - FreightCar America will add an additional railcar production line in Cherokee as part of its $10 million Shoals expansion, creating 150 to 200 new full-time jobs in Colbert County.

(Shoals.FreightAmerica.com)

The announcement came during a 1 p.m. press conference at FreightCar's facility in Barton Riverfront Industrial Park. The company, which has an employee base of nearly 500 workers, expects to be fully operational and building 6,000-8,000 railcars annually by the second quarter of 2015.

FreightCar President and Chief Executive Officer Joe McNeely said his company's relationships with Navistar, the Retirement Systems of Alabama, Alabama Industrial Development Training (AIDT), the state of Alabama, Shoals Economic Development Authority and other local leaders have contributed to FreightCar's success in northwest Alabama.

"FreightCar America has successfully diversified the company with a number of new railcar types, which have been well-received in the marketplace," he said in a statement. "A major part of this achievement has been the decision to manufacture railcars at the state-of-the-art Shoals facility."

FreightCar, which began subleasing a portion of its facility from Navistar in early 2013, will occupy about one-third of the building when the new production line is complete. Monday's $10 million expansion announcement brings FreightCar's total Shoals capital investment to $33 million.

Spokesman Chip Avery said the hiring process will begin immediately, with a job fair kicking off early next year at the Marriott in Florence. Most will be heavy-construction and production positions, including welders and fitters. Salary information was not available early this week, but Avery said wages will be competitive with other industries in north Alabama.

In late October, FreightCar announced third-quarter 2014 revenues of $190.3 million and a net income of $6.4 million. McNeely said the company experienced "record quarterly orders of 7,375 railcars which raised our backlog to over 13,500 railcars, valued at approximately $1.1 billion."

It's been a difficult year for the Shoals, which was shaken on several fronts after Hillshire Brands, HON Company and izzy+ in Florence announced they would close. Nearby International Paper also shut down this year, cutting nearly 1,100 jobs from the north Alabama workforce.

Forrest Wright, president of the Shoals Economic Development Authority in Florence, said the Shoals is fortunate because many of its local companies have been expanding and the area unemployment rates have remained mostly steady despite the economic downturn.

"I think the future's bright for the Shoals and for FreightCar America in the Shoals," he said.

Wright said FreightCar is not receiving any local incentives for the expansion. Alabama Department of Commerce Secretary Greg Canfield said the state is also not providing additional dollars to FreightCar for the project.

"The state of Alabama is not providing any incentives to FreightCar America that are directly tied to the $10 million expansion at the company's Colbert County operation, and job growth like that announced today was anticipated in the revised incentive agreements involving the facility at the Barton Riverfront Industrial Park," he said in a statement.

The plant where Navistar and FreightCar America operate today was once home to National Alabama, the company that promised to hire at least 1,600 railcar employees, according to The TimesDaily. Those plans never came to fruition.

Navistar announced in September 2012 it would take over the plant through a lease agreement with the RSA, which obtained total equity of the facility in 2010 three years after it was built by National Steel Car of Canada.

Last year, National Steel Car CEO Greg Aziz was indicted and arrested for not telling the RSA that he knew the cost to build a railcar manufacturing facility in Colbert County would far exceed the $350 million loan that RSA provided for construction. The security fraud charges were dismissed last month after Aziz agreed to pay $21 million in damages to the RSA.

Updated at 10:17 a.m. with a statement from Greg Canfield.

Updated at 2:49 p.m. with more history of the plant.

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