BY ANDREA HOLECEK, Times of Northwest Indiana
holecek@nwitimes.com
EAST CHICAGO | The nation's strong economy and its ongoing conversion to alternative fuels are spurring orders for Union Tank Car Co.
The company, which produces and leases railroad tank cars, recently hired workers for its East Chicago facility, where it has orders stretching into 2008. The plant's employment level has jumped to about 600 from 570 in late 2005 and 245 four years ago.
Company spokesman Bruce Winslow said the industry -- like the nation -- is in its fourth year of expansion.
"The economy is running very nicely, which means people are consuming things so they have to be shipped," he said this week. "It means our customers need tank cars."
Kelly Hounshell, president of Local 524 of the International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers, which represents the facility's union work force, said things looks pretty good for the plant right now.
"I've got a good feeling about it," he said. "I'm very satisfied with the way things are going. We've been assured we've got 60 tankers (a week) scheduled for 2006, 2007 and into 2008. No one has a crystal ball, but it looks good right now."
The company will open a new production plant in Alexandria, La., in the next few months. There, it will ramp up production over a period of time, Winslow said. The plant initially will produce general purpose 30,000-gallon tank cars for moving ethanol and biodiesel fuels.
The ethanol marketplace is very strong as more and more automobiles are switching to it as a fuel source fuel, plus the Environmental Protection Agency is requiring its use as the oxygenator used in gasoline consumed on the West Coast, Winslow said.
In February, the Renewable Fuels Association hosted the National Ethanol Conference in Las Vegas. According to the Web site of UTLX, Union Tank Car's leasing arm, highlights of the meeting were the projected growth in the production of ethanol and the plans to transport product to the marketplace.
"The latter has 'fueled' record demand for tank cars, and industry backlogs now extend well into next year," it said.
Pekin, Ill.-based Aventine Renewable Energy, the second-largest U.S. ethanol marketer, recently leased 300 new tank cars from UTLX to transport ethanol from its own production facilities and those of its alliance partners. The company said ethanol can’t be effectively piped because of its nature. It also said trucks are too small to be cost-effective over long distances, and barge routing is too inefficient.
The growing use of biodiesel fuel also is increasing the need for railcars, Winslow said. Biodiesel is a clean-burning, domestically produced diesel fuel, derived from 100 percent renewable resources of energy like soybeans, canola and mustard seed.
Although generally used by municipalities and public transportation systems, it can be used in any conventional diesel engine either in pure form or in a blend of any proportion with petroleum diesel. Biodiesel delivers equivalent engine performance while substantially decreasing harmful emissions.
"The use of alternative fuel is good for the farmers, for consumers and for us," Winslow said.
Union Tank Car is a wholly owned subsidiary of The Marmon Group, owned by Chicago's Pritzker family. The Marmon Group is an international association of more than 100 companies that operate independently within diverse business sectors. Collective revenues exceeded $6.3 billion in 2004.