FreightCar America Inc. will produce 3,000 rail cars at its Roanoke manufacturing plant under a contract with Norfolk Southern Railway Co., putting more than 200 people to work at the East End Shops downtown.

Production will begin this May on the first 1,500 high-capacity coal cars under a $100 million contract with Norfolk Southern. Gov. Bob McDonnell and executives from the two companies announced the deal in Richmond on Monday morning at a windswept triple rail crossing near the James River.

“It shows that this economic recovery that we’ve been talking about this last year in Virginia is continuing,” McDonnell said.

Chicago-based FreightCar America laid off much of its Roanoke work force in 2009. It resumed production in January under a contract with BNSF Railway and now employs about 120 people at the Roanoke plant, general manager Mark Saylor said.

Saylor said the company will employ between 200 and 250 people when it begins producing cars for Norfolk Southern this spring. FreightCar America will give hiring preference to workers who have experience at the facility, Saylor said.

“We had as many as 400 people working in the facility before,” Saylor said. “Some of them have moved in to other jobs, but for the most part a lot of the guys have shown an interest in coming back.”

Norfolk Southern is resuming the process of replacing its aging coal car fleet, an effort that began in 2007 and was suspended because of the severe economic downturn. Company officials said the two-year contract with FreightCar America is a sign of an improving economy and an increased demand for coal.

“I’m now very pleased that the economy, and the coal market in particular, has shown sufficient strength to justify resuming our program,” said John Rathbone, Norfolk Southern’s executive vice president for administration. “This is an investment in what we are confident is a long and prosperous future in the coal market.”

Rathbone said Norfolk Southern’s initial $100 million order with FreightCar America represents a significant portion of the company’s 2011 capital budget for rolling stock.

“We’re especially pleased that the money will be going to our neighbor, FreightCar America, in a city that’s very important to Norfolk Southern,” Rathbone said. “It will be good to see the East End Shops of Roanoke opened again, where there will be good-paying jobs for the citizens of Roanoke and they will be producing equipment that’s vital to our single largest commodity — coal.”

FreightCar America will produce steel triple hopper rail cars than can carry up to 4,200 cubic feet of cargo and a lightweight hybrid car that company officials describe as uniquely suited to carrying eastern coal.

“They’re producing a great car for us at a competitive price,” Rathbone said of FreightCar America. “They certainly have an advantage being right on our line between the coalfields and Norfolk.”

And Monday’s announcement is good news for workers who have been idled by the slowdown in rail car production, said Don Davis, the president of the Transportation Communications Union Local 6016.

“It looks like the economy is bouncing back,” Davis said.

Source: Roanoke Times, Feb. 21 2011