A Roanoke freight car plant will build 3,000 coal cars for Norfolk Southern over the next two years.
FreightCar America Inc.'s Roanoke facility received a $100 million deal with Norfolk Southern railroad, Gov. Bob McDonnell announced Monday.
The major U.S. freight car manufacturer will build 1,500 coal cars over the next year starting in May. FreightCar America will hire more than 200 workers for the contract, officials said.
The Norfolk-based railroad company also agreed to order an additional 1,500 cars from FreightCar America's Roanoke facility in 2012, officials with the car firm and the railroad company said.
The deal means more jobs for Roanoke, more coal traffic going to the port of Hampton Roads and more tax revenue for the hard-pressed state government, McDonnell said.
The first phase of the contract calls for the Roanoke plant to build 1,000 steel hopper cars and 500 aluminum and steel hybrid cars.
Monday's announcement marks the resumption of Norfolk Southern's recession-blocked program to modernize its car fleet, said John P. Rathbone, the company's executive vice president for administration. Norfolk Southern owns or leases almost 90,000 freight cars.
Chicago-based FreightCar America produced more than 70 percent of coal cars delivered in North America during 2005-06.
The company had idled its Roanoke plant in the summer of 2009 waiting for industry demand to strengthen. It began ramping up for production at the beginning of the year, officials said.
Its Roanoke manufacturing facility can turn out over 5,000 freight cars in a year, said Sean Hankinson, FreightCar America's eastern regional vice president for sales.
The company said it delivered 10,349 new freight cars in 2008, but just 3,377 in 2009 and only 1,535 by Sept. 30, 2010, as demand continued to slow.
However, railroads and shippers need to replace aging cars, FreightCar America says.
Industry researchers project total deliveries this year of 23,000 to 30,000, and coal car deliveries of 3,500 to 5,000.
In addition to Norfolk Southern, FreightCar America's customers include the major North American freight rail companies: CSX, BNSF, Union Pacific, Canadian Pacific and Canadian National railroads.
pbacque@timesdispatch.com
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