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Railroad Car Foundry To Reopen, Citing Increased Demand

February 23, 1989

GRANITE CITY, Ill. (AP) _ The nation’s former largest producer of steel freight car frames said it would resume production after a six-year hiatus, primarily because of increased demand for its product.

The Granite City foundry, owned by American Steel Foundries, closed in 1982 when the railroad supply industry went into a steep recession.

But ASF president Norman Berg said at a news conference Wednesday that the Chicago-based company plans to reopen the plant May 15.

″The railroad products business continues to strengthen,″ he said. ″The market is indicating to us that orders for new freight cars will continue to gain momentum.″

Before it closed, the foundry led the nation in producing steel railroad car side frames and bolsters, which form the undercarriages of freight cars, Berg said.

At its peak in 1979 the plant produced 25,000 steel freight car frames and employed 1,500 workers. Last summer the company recalled about 35 former employees to get the facility ready for use.

By early summer, an additional 230 employees will be back on the job, Berg said.

Since the early 1980s, Berg said, the company has pumped more than $14 million into the plant for improvements.

Plant manager William Donovan said it was impossible to predict the number of workers who eventually will regain their jobs, since the employment level depends on industry demand.

In its first year, however, Donovan said the foundry would have a payroll of about $5 million - welcome news for this steel-industry-based town of 37,000 residents across the Mississippi River from St. Louis.

″This is like a resurrection,″ said Mayor Von Dee Cruse, noting that the average hourly wage at the plant was $10.

The foundry had 850 employees when it closed, Cruse said. Since then, he said, some former foundry skilled labor switched to Granite City Steel, the town’s largest employer with a 3,600-member work force, while others found jobs elsewhere.

Others who made the foundry their career but had few skills remained unemployed, said Cruse, though he could provide no figures.

Berg said that while the decision to resume production largely was based on the increased demand for railroad products, company officials looked at other factors.

″We asked for and received agreements from our unions on a number of necessary work-rule changes,″ he said. ″All four of the unions have been most cooperative in working with us to reopen this foundry.″

The company also cited the Illinois Power Co. for designing a favorable rate structure. The foundry uses large amounts of electricity.

ASF also has plants in Alliance, Ohio, East Chicago, Ind., and Hammond, Ind., which will continue their operations, Berg said. ASF is a division of Chicago-based Amsted Industries Inc.

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