FreightCar America Closing Johnstown Facility

CHICAGO – FreightCar America Inc. is closing its Johnstown, Pa., manufacturing facility that employs about 390 employees.

The closure does not involve a closure of the company’s Johnstown administrative offices. Officials said the closure is in line with FreightCar’s strategy of optimizing production at its low-cost manufacturing facilities and continuing its focus on cost control.

“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,” said Chris Ragot, president and chief executive officer. “Our Johnstown, Pennsylvania 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,” Ragot said. “We will continue to focus on strategic initiatives and cost control to remain competitive despite a challenging railcar market.”

FreightCar estimates that it will record a pre-tax restructuring and impairment charge during the fourth quarter of 2007 of approximately $34.3 million ($21.2 million, net of tax) in connection with the closure of the Johnstown manufacturing facility and cessation of operations at the facility.

The company expects the manufacturing capacity at its other two existing plants, in Danville, Illinois and Roanoke, Virginia, to be sufficient to meet its requirements for the next several years.

FreightCar America, Inc. manufactures railroad freight cars. In addition to coal cars, FreightCar America designs and builds bulk commodity cars, flat cars, mill gondola cars, intermodal cars, coil steel cars and motor vehicle carriers.

It is headquartered in Chicago, Illinois and has manufacturing facilities in Danville, Ill.; Roanoke, Va.; and Johnstown, Pa.

– Business Wire