Andersons returning Danville railcar-manufacturing facility to its roots

Andersons returning Danville railcar-manufacturing facility to its roots

DANVILLE — A railcar-manufacturing facility on Danville's east side that has struggled in recent years will return to its roots as a repair facility when The Andersons Inc. completes its $2.2 million purchase of it later this month.

The Ohio-based agribusiness company announced Wednesday that it signed an agreement to buy the FreightCar America facility and incorporate it into its Andersons Rail Group division.

The announcement said Andersons Rail Group plans to provide a wide range of services at the site, including railcar repair, painting, blasting, cleaning and scrapping and tank-car certification.

It said the Danville facility, which is strategically located in the high-volume Midwest rail-transportation corridor, will be Andersons Rail Group's 21st shop in the United States.

"We are excited to add the Danville facility to our repair network," said Sam Anderson, vice president of operations with Andersons Rail Group. "The purchase helps support our strategy of providing quality repairs and outstanding service to rail shippers, railroads and rail-car leasing companies across the U.S."

The company expects the purchase to be finalized later this month and anticipates the Danville location to be operational in the fourth quarter of this year.

In its second-quarter earnings report released Wednesday, FreightCar America said it has entered into a "definitive agreement to sell the Danville, IL, production facility for $2.2 million." It also reported a net loss of $2.3 million and a backlog of 2,319 rail cars with a total value of about $190 million.

In the report, FreightCar America President and CEO Jim Meyer said the company's "marketplace remains extremely challenging, with continued pressures on pricing," but added that it has made progress on its "Back to Basics" operational-improvement strategy and is ahead of schedule on its previously announced plan to reduce its cost of goods sold by $3,000 to $4,000 per railcar by the end of the year.

The company has been expanding railcar production operations at other facilities, including in Virginia and Alabama.

FreightCar America is headquartered in Chicago and manufactures aluminum-bodied railcars. It has been manufacturing railcars since 1901, around the same time the Danville plant was established as the main shop for the Chicago and Eastern Illinois Railroad. FreightCar acquired the facility in 1995 and grew the repair facility into a major manufacturer of new railroad freight cars.

FreightCar Danville timeline

1995: FreightCar America (then called Johns-town America) adds to its railcar-manufacturing capabilities by acquiring Freight Car Services in Danville.

2005: FreightCar goes public, listing its common stock on the Nasdaq National Market, and also celebrates the grand opening of a railcar-manufacturing facility in Roanoke, Va.

2006: The company celebrates the completion of its 100,000th aluminum-bodied railcar with a ceremony at its Danville facility, where the car was built.

February 2013: The company announces the sublease of a portion of a facility in Cherokee, Ala., for a manufacturing facility and starts operations there later that year. The facility has the capacity to build more than 7,000 railcars per year.

December 2014: FreightCar announces a $10 million capacity expansion of the Cherokee facility, adding an additional production line and increasing its total investment there to about $33 million.

Aug. 1, 2018: The Andersons Inc. announces it has signed an agreement with FreightCar America to buy the Danville facility. The Andersons Rail Group plans to turn the former manufacturing plant into a full-service freight- and tank-car repair shop.

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