BY ANDREA HOLECEK, Times of Northwest Indiana
holecek@nwitimes.com
EAST CHICAGO | Union Tank Car Co. will close its East Chicago plant at the end of May, eliminating the jobs of about 70 salaried and 375 hourly union employees.
Company spokesman Bruce Winslow said Friday the company will shift production to its newer facilities in Sheldon, Texas, and Alexandria, La. Unlike the East Chicago plant, both the facilities are nonunion.
In a prepared statement, the company said it was closing the plant at 300 W. 151st St., which it has owned for 40 years, because of the declining market for tank cars sales and leases.
"Long-term demand estimates require the company to consolidate its manufacturing operations," the statement said.
The International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers Local 524, which represents the workers, contend the company has been moving orders to the nonunion plants in the South in order to cut labor costs.
Welders at the local plant, who make up about 60 percent of the hourly work force in East Chicago, earn a base rate of $19.45 per hour, while those at the Alexandria plant earn $17 to $18, according to Kelly Hounshell, the local's president. Workers at both plants have benefit packages.
The plant was building about 60 tanks per week with about 650 represented workers from late 2006 to September, when weekly tank car production dropped to 50, then to 40 in October, and to 30 in early January.
Each time the company dropped the number of tank cars it produced at the East Chicago plant, it also cut the work force.
"I absolutely believe that they're closing this plant because both plants in the South are nonunion and they can make the tank cars cheaper there, and that they're taking work from here to down there," Hounshell said Friday. "I know we make a better tank car than the other plants because customers have specifically asked for the ones built here because of their quality."
The railroad freight and tank car industry has all but disappeared from the region. GATX Rail Corp. closed its plant in East Chicago in February 2001, about the same time as the Thrall Car Manufacturing Co. facility in Chicago Heights was shuttered.
Union Tank Car's home office will continue to be located in Chicago, Winslow said. The fate of the East Chicago plant still isn't known, he said.
"We've added several buildings, but the main part of the plant is quite old," he said.
Union Tank Car was one of more than 100 manufacturing companies owned by the Pritzger family's Marmon Holdings, until 60 percent of the conglomerate was sold to Warren Buffet's Berkshire Hathaway Inc. The deal was completed March 18. The sale had no effect on the decision to close the East Chicago plant, Winslow said.