TACOMA, Wash. - After repairing and refurbishing locomotives, rail cars and boat engines for more than six decades, Coast Engine and Equipment of Tacoma will shut down in early July, another casualty of the nation's deep, grinding recession, the Seattle Times reports.
The closure will put 111 mechanics, welders, electricians and other employees out of work, company President David Swanson said.
The economic slump has meant railroads, Coast Engine's main customers, are hauling a lot less freight; as a result, they're mothballing more locomotives and rail cars.
Through the first 16 weeks of 2009, total U.S. freight volume was down 16.9 percent compared with the same period last year, according to the Association of American Railroads.
As many as 30 percent of all rail cars in North America are in storage, Swanson estimated, and his two largest customers, Burlington Northern Santa Fe and Union Pacific, have idled hundreds of locomotives.
The result is a steep falloff in Coast Engine's workflow. Business dropped off 40 percent in February, Swanson said, and an additional 20 to 25 percent over the next two months. The outlook for the rest of 2009 wasn't any better, he said.
"There's onesie and twosie things out there but nothing to sustain a business," he said. "We did everything we could to figure out how we could restructure, but the problem was we had no line of sight on how long this recovery will take."
Coast Engine was founded by the Walker family in 1947 to repair marine diesel engines. As that business declined, the company shifted to rail. At its height, Swanson said, it repaired 400 to 600 rail cars and rebuilt 30 to 50 locomotive engines a year.
Coast Engine prospered during the boom in rail shipments earlier this decade and was profitable as recently as last year, Swanson said. (The privately held company does not disclose its financials.) It leases 14 acres at the Port of Tacoma.
The Walker family sold Coast Engine in 1988 to The Washington Cos., a group of transportation, equipment and environmental-services companies controlled by Montana magnate Dennis Washington. Seattle-based Aviation Partners is another Washington Cos. holding.
(This item appeared May 6, 2009, in The Seattle Times.)
30% of rail cars in storage might be underestimating the real state of affairs judging by train frequency and size. IMHO. We can presume they are not fixing any locomotives before laying them away in storage. Why bother ? " If they're in the shop they're costing us money and not making money" still applies, even more than before the meltdown.
One of our youngsters used ta work for CEECO. He mentioned their imminent closure earlier. Read the article, but hadn't really thought about it. CEECO had contracts with both us and UP.
Most of the work was locomotives from us, because we have our own car shop right here. I never could figure out why we'd send units ta CEECO for work... But hey, it ain't my railroad. I just work here.
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Hmm. That address doesnt look right. It looks like the link pointing here was faulty.
