EAST CHICAGO | Local Union Tank Car Co. workers are concerned that work normally slated for their plant is being sent to the company's nonunion plant recently built in Louisiana.
The company has laid off a total of 82 hourly workers since August and "another layoff is coming," said Kelly Houndshell, president of Local 524 of the International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers.
"Everyone seems to think our work is going South," he said.
The company has informed the union it would reduce the number of railroad tank cars being made at the East Chicago facility to 30 per week by March, he said. But Houndshell said the plant director told the union committee the drop in production would come before Christmas.
"It could cut the work force in half," Houndshell said.
Currently, the plant, 300 W. 151st St., employees about 10 workers for each tank built a week, Houndshell said. The plant built about 60 tanks per week from late 2006 to September when the rate dropped to 50. On Oct. 1, the rate fell to 40 per week, he said.
Company spokesman Bruce Winslow couldn't be reached for comment Friday. On Wednesday, he said the layoffs were the result of falling orders for tank cars, which both plants build.
But Houndshell contends there is no way for the union to know whether that is true because it has no independent information on the number of orders the company has received or anticipates.
"The layoffs have more to do with the Louisiana plant," Houndshell said. "I know, for a fact, their production is going up while ours is going down. The big question in everyone's mind is, 'what are their (company's) intentions?' "
Union Tank Car's $100 million Alexandria, La., plant began production in mid 2006. The state's labor situation and the incentives Louisiana offered are the main reasons Union Tank Car chose the location, according to published reports.
The company received $65.2 million in incentives that included state and local infrastructure improvements of $32 million, including money to buy the plant's property. It also received a 10-year exemption from local property taxes, worth about $9.8 million, and $19.1 million in tax rebates from a jobs program, reports say.
The company and union are trying to get an incentive that would keep Union Tank in East Chicago. Houndshell said he and the plant director met with Rep. Pete Visclosky, D-Ind., Sept. 29, to ask the congressman to organize a meeting with local East Chicago officials.
"We're hoping to meet with local officials to get some type of tax break or abatement," Houndshell said. "We have to do anything we can to save our jobs. I don't know how much taxes Union Tank pays here now, but if it moved out, the number would be zero."
Visclosky spokesman Justin Kitsch said Friday the congressman has passed the concerns and information on to city officials. East Chicago Corporation Counsel Carmen Fernandez said she would check to see is there is a possibility some type of incentive would be considered.
As part of the Louisiana agreement, Union Tank Car had two years from its start-up in June 2006 to hire 850 workers, including 700 full-time plant workers and 150 direct-professional jobs, or lose $3,500 in incentives for each person below the 850 mark.
In late July, the Louisiana plant was producing 60 tank cars weekly with 670 workers, and its officials said that more workers may not be needed, according to published reports.
If the Alexandria plant remains at its current employment level, it could lose $630,000 of its $65.2 million incentive package. But even paying $18 per hour for a 40-hour work week, at the lower staffing level, it would take the plant less than five weeks to recoup the loss.
In an April 7, 2005, article in The Town Talk, Alexandria's local newspaper, Robert Zwartz, director of taxes for Union Tank, said the absence of unions was a major reason the plant located in Alexandria.
"I had a dickens of a time trying to convince our company officials Louisiana was the place to come," he said during a local economic development summit.
Company president Frank Lester discussed the comments in a letter-to-the-editor, saying the company has a good relationship with a number of unions and its support of the right-to-work principle didn't reflect ill will toward unions or supporters.
Welders in East Chicago earn a base rate of $19.45 per hour, while those at the Alexandria plant earn $17 to $18. Both have benefits packages.
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