(The following report appeared on the Toronto Star website on June 21.)
HAMILTON, Ont. — National Steel Car is on a hiring spree. The company has announced it will hire 500 workers over the next three months as it struggles to keep up with a roaring North American demand for new railway freight cars.
“We went into a slump along with the general economy in 2000, but now the railway industry and our market share are improving rapidly,” said Dan Elliott, the company’s chief operating officer. “Our order books are filling up. We’re booking orders for the second quarter of 2005 already.”
At the top of the company’s shopping list for workers are more than 300 welders, plus crane and machine operators and paint shop technicians. Recruiting started quietly last month with about 75 people hired. The new hiring will bring the company’s force of welders to 900 and total employment to about 1,900.
“We need all the skills involved as we ramp-up manufacturing,” Elliott said.
Steel Car manufacturers all types of cars except tankers and coal carriers, and the surge in demand is driving sales across all its products – leading the company to retool some production lines while adding shifts to others.
The company is a supplier to most of North America’s leading railways, including CN, Union Pacific, First Union, Norfolk and Southern, CIT, TTX, CSX and BNSF.
The hiring burst was cheered by the United Steelworkers of America.
“I’m quite pleased with this process. It’s just fantastic to see our membership grow and to have someone to build our cars for,” said Local 7135 president Gary Pedron. “This is just fantastic news. It’s going to be good for the employer, the union and the community, especially after all the turmoil Hamilton has gone through lately.”
Always a cyclical business, the freight car industry was strong through the 1990s, but went into a steep slump along with the rest of North America’s economy in 2000, a decline that only got worse following the Sept. 11, 2001 terrorist attacks. At its worst, Steel Car’s employment fell to 500 in 2002 from 2,600 in 1998. By August 2003 it had climbed back to 1,400.
During that same period worldwide, demand for new cars fell to about 20,000 from more than 75,000.
While its employment rolls shrank, however, Steel Car’s private owner invested “several million dollars” in upgrading the plant and equipment to make the operation more efficient. Those upgrades included the installation of two new blast-and-paint shops.
North America’s rail freight car industry consists of five major manufacturers, with Steel Car ranked second based on volume and its Hamilton manufacturing facility the largest single site.
Elliott said the North American market usually sees about 20,000 freight cars scrapped every year, “so anything beyond that represents growth in the industry.” Last year 35,000 cars were sold across the continent. Steel Car’s sales range between 5,000 and 8,000 cars a year. Its current backlog of $500 million in orders is a 15 per cent increase from last year.
A boxcar, Elliott said, sells for anywhere from $60,000 to $100,000 depending on its features. The Hamilton plant can produce one in a single day.
While he wouldn’t talk about specific numbers, Elliott said Steel Car’s market share has been growing at the same time as the overall market expands. Credit for the expanded market share, he said, belongs to the work force.
“The people here have done a terrific job in every aspect of the business,” he said. “They understand the challenge we’re facing and they’ve really stepped up to it.”
Roger Cameron, director of public affairs for the Railway Association of Canada, said traffic across North America’s skeleton of rail lines has been growing “at double digits” over the last two years as customers search for cheaper and more reliable transportation.
“National Steel Car builds for all of North America. They’re known for having a modern and efficient plant, so what’s happening there isn’t just a reflection of something local. ” he said. “Rail traffic in Canada has increased 37 per cent over the last decade.”
That increase in traffic has called for a steady replacement of older freight cars. At the same time, he added, the demand is growing for cars specifically suited to the type of cargo they will carry.
For National Steel Car, that has translated into a demand for more design work and a 15 per cent increase in the number of engineers the company employs.
National Steel Car isn’t the only manufacturer reporting an improved market. In a separate release yesterday Oregon-based Greenbrier Companies reported it has received orders for nearly 7,000 cars valued at $400 million US and is carrying a backlog of orders for 14,600 units valued at $860 million US. A year ago the backlog was 9,700 units valued at $600 million US. Since the start of its current fiscal year in September Greenbrier has received orders for 11,500 cars worth $800 million US in North America and Europe.
Steel Car’s employees are in the second year of a three year contract that will take their average wage to about $21 an hour.
Founded in 1912, National Steel Car Limited is the only ISO certified new rail car manufacturer in North America.
Application forms are available at the front gate of the plant at 600 Kenilworth Ave. N.