Union Tank Car Company (UTLX) plans to convert its railroad tank car manufacturing plant in Sheldon, Tex., to a railcar repair facility. The company expects to cease manufacturing operations at the facility in August 2020 and establish repair operations over the coming year.
Operations will continue at UTLX’s tank car component fabrication plant located on the Sheldon campus, and at the company’s tank car manufacturing facility in Alexandria, La.
In announcing the planned conversion, Jeremy DeLacerda, President of UTLX Manufacturing, cited reduced industry demand for new railroad tank cars and a corresponding increase in tank car repair needs as shippers rely more heavily on existing cars.
The Sheldon tank car plant employs about 350 people. The repair facility, when fully operational, is expected to employ about 100 people in both hourly and salaried positions.
UTLX Manufacturing, a subsidiary of Union Tank Car Company, produces railcars for Union Tank Car and its Canadian affiliate, Procor, as well as shipper-owners and tank car lessors.
“Current and expected demand is simply insufficient to support two tank car manufacturing facilities going forward,” DeLacerda said. “Sluggish activity in several markets we serve has resulted in fewer rail shipments and falling demand for new tank cars both now and for the foreseeable future.”
“In making the difficult business decision to cease tank car manufacturing at the Sheldon facility, we recognize the impact on our dedicated employees, their families, and the community,” DeLacerda said. “We will work with employees on outplacement services and help them apply for any available opportunities within the company, including in our growing repair business.”