New York Air Brake LLC (NYAB) on Sept. 29 announced what it is calling a “realignment strategy” for its North American manufacturing operations that involves launching production in Ciudad Acuña, Mexico; “shifting capacity and production scope” at three U.S. facilities—Salisbury, N.C.; and Nixa and Kansas City, Mo.—“completing a substantial manufacturing refocus” at its Watertown, N.Y., facility to a machining operation. The company broke the news to employees on Sept. 29.
“In order to minimize disruption to customers, the phased transition across North America will begin in the fourth quarter of 2021 and is expected to end by the close of 2022,” the company said. NYAB employs nearly 400 workers at the Watertown plant; the manufacturing shift will eliminate approximately 125 Watertown-based International Association of Machinists and Aerospace Workers (IAM) jobs and commence “at a date to be confirmed in early 2022.”
New York Air Brake President and CEO Ulisses Camilo, in announcing the changes, noted that “more than 70% of NYAB’s freight original-equipment clients are producing railcars in Mexico—a number that continues to climb.” FreightCar America recently shifted all railcar manufacturing to Castaños, Mexico, which is in close proximity to Ciudad Acuña. The Greenbrier Companies and TrinityRail also have substantial Mexican manufacturing operations in close proximity to Ciudad Acuña.
Ciudad Acuña (formerly Las Vacas or Villa Acuña) is located northern Coahuilaestado (State of Coahuila) in northeastern Mexico. The city is on the Rio Grande (Río Bravo del Norte) just across the U.S.-Mexico border from Del Rio, Tex., and is a port of entry. Ciudad Acuña, a commercial and manufacturing center for Mexico’s agricultural hinterland, is the fourth-largest city in the State of Coahuila and the fastest-growing city in Mexico. The Del Rio-Ciudad Acuña Metropolitan Area is the seventh-largest binational metropolitan area along the U.S.-Mexico border. It is also known as “Tierra de la Amistad.” The Del Rio “micropolitan” area’s population was 55,000 in 2015, and the Ciudad Acuña Metropolitan Area’s population was 225,000 in 2015. The 2015 population of Greater Del Rio-Ciudad Acuña binational metropolitan area was 280,000.
Ciudad Acuña is not directly rail-served, but Union Pacific, which serves Del Rio, Tex., just across the border, connects with Ferromex at Piedras Negras/Eagle Pass, located south of the city. A Mexican interstate highway (2) connects Ciudad Acuña with other urban centers in Coahuila and Texas. The city also has an international airport.
Several U.S.-based companies have opened factories, or maquiladoras, in Cuidad Acuña, “given its status as being 100% union-free,” according to Wikipedia. Among these are Bendix Commercial Vehicle Systems LLC, a sister company within the Knorr-Bremse Group, NYAB’s parent company ((brake and hydraulic parts); Irvin Automotive Products (automotive seat components); Gentherm de México (automotive seat heaters); Caterpillar (mining truck components); RESCO Electronics (wiring harness and cable assembly manufacturing), and Toter Inc. (waste receptacles, curbside roll-out carts).
“New York Air Brake is a global company operating in an ever-changing global marketplace,” said Camilo. “Throughout our history, this business has successfully evolved its manufacturing approach to better serve our customers. Our strategic direction for manufacturing has long been to capitalize on our locations and core competencies, always aiming to align production closer to the point of final assembly. The accelerated pace of globalization is a factor that places greater delivery pressure throughout the business. Our footprint in Mexico is a crucial connecting point in our North America growth plan. While Watertown manufacturing operations will see the greatest impact, the site is and has been the heart of our business for more than 130 years. That will not change. We will remain a committed and active corporate citizen in the Watertown community and Jefferson County at large.”
“Sharing today’s news with the workforce provides as much notice as possible to assist affected employees with this transition,” added Camilo. “Supporting our own is a responsibility on which we simply will not waver. We will take action to help support our affected employees as they take their next career step. This includes a severance and benefits package and job placement services. Over the coming weeks and months, we will actively work with outplacement and governmental agencies to begin that process.”
IAM Pushes Back
The International Association of Machinists and Aerospace Workers released the following statement on New York Air Brake’s decision to cut 125 IAM jobs from its Watertown, N.Y. plant:
“The closure announcement from New York Air Brake is a blow to the 125 Machinists Union members at the Watertown plant,” said IAM District 65 Directing Business Representative Ron Warner. “Their decision to close this plant after 130 years is concerning, but what’s even more troubling is the announcement to move these jobs to Mexico and other non-union facilities. Our members at the Watertown facility had felt optimistic about their future when a rail industry report by U.S.-based Grand View Research, Inc. noted that increasing tourism will help boost the demand for passenger rail travel around the globe through 2025. It’s shameful that this profitable company is ending the careers of these dedicated employees.”
“As our politicians are on the cusp of passing one of the biggest investments in our country’s infrastructure, including funding for rebuilding the nation’s passenger and freight rail, our members are left wondering about their futures in upstate New York,” said IAM Eastern Territory General Vice President Brian Bryant. “Our union did not support USMCA because we knew this trade agreement wouldn’t stop the hundreds of thousands of manufacturing jobs, like the good-paying jobs at the Watertown facility, from being moved to Mexico where they can pay workers lower wages. The IAM will commit every resource and relationship to ensure we get clear answers on why the company is moving jobs south of the border to Mexico. We will continue to work on behalf of the more than 125 workers affected by a decision that will have a devastating impact on our members, other workers in the plant, and the Watertown community. We will sit down with the company to discuss the next steps and our next course of action.”