More layoffs announced at Wabtec’s Erie plant
On the same day that Wabtec Corp. unveiled plans for an additive manufacturing facility at Pittsburgh International Airport, the rail technology firm sent a layoff notice to workers in Erie.
The North Shore- based firm, seeing a decline in orders for rail parts because of the COVID- 19 pandemic, plans to eliminate 150 jobs between the middle of next month and the first quarter of 2021.
That’s on top of 300 layoffs that the company had already announced would take place between April and November of this year. So far, about 170 of the original cuts have been carried out, said Scott Slawson, president of The United Electrical, Radio and Machine Workers of America Local 506.
“Wabtec is adjusting its operations in Erie, Pa., to align with today’s volume realities,” company spokesman Tim Bader said in a statement. “Decisions like this are never easy, but it comes as the result of an in- depth evaluation of the market and how to best position the company for success given today’s unprecedented
environment.”
There have been no layoffs at the company’s former headquarters in Wilmerding, Mr. Bader said.
Before the Erie layoffs began, the engineer and development facility had about 2,000 employees. Mr. Slawson’s union had some 1,600 members working at the former GE Transportation plant, which is the largest producer of freight locomotives in the U. S.
Wabtec acquired GE’s rail division in February 2019 for $ 11 billion and workers at the Erie plant immediately launched a strike to protest the company’s proposed working conditions.
The two sides eventually struck a deal.
Wabtec, which began 150 years ago as the brainchild of George Westinghouse, now builds rail parts and provides services around the world. It has a global workforce of more than 27,000.
A year ago this week, the storied company moved its headquarters from Wilmerding to the North Shore in an effort to align the brand with a high- tech future. On Thursday, Wabtec announced it would be an anchor tenant of a sprawling campus at Pittsburgh International Airport, which is being billed as a hub for additive manufacturing.
But in Erie, the lack of incoming orders at the plant is palpable, Mr. Slawson said.
“When all is said and done, with retirements and everything else, we’ll be down to about 1,100 ( workers),” he said. That accounts for the hourly workers at the facility, which also has about 500 engineers.
While some rail freight traffic is up nationally — think Amazon packages piling up on doorsteps all over the country — industrial and commodity transport has taken a big hit from the economic slowdown. Coal shipments in North America are down 26%, for example, according to data from Bloomberg Intelligence. Automotive is down 25% since this time last year.
And while analysts see improvement on the horizon, it’s not clear when and how the COVID- 19 pandemic and resulting economic slide will end. That will make it harder for rail companies to pull the trigger on massive capital investments — the kind needed to get the Erie plant buzzing at last year’s levels.
Wabtec’s net sales were down about 22% during the second quarter, the latest for which data is available, as compared with the same period last year.
“The freight locomotive market continues to be challenging with carload volume significantly down versus last year and the COVID- 19 pandemic continuing to impact communities and the economy,” Mr. Bader said.
“As of Oct. 1, 2020, North American rail carloads and U. S. rail traffic are down roughly 10%, respectively, versus last year and locomotive parkings remain at a high.”
Should things change course, workers laid off at the Erie facility have recall rights for five years, Mr. Slawson said.