For NYAB, a major manufacturing change
New York Air Brake LLC (NYAB) announced on September 29 what it calls a “realignment strategy” for its manufacturing operations in North America that involves starting production in Ciudad Acuña, Mexico; “Transfer of capacity and scope of production” at three US facilities: Salisbury, North Carolina; and Nixa and Kansas City, Mo.— “complete a substantial manufacturing refocus” at its Watertown, NY plant, into a machining operation. The company announced the news to employees on September 29.
“To minimize disruption to customers, the gradual transition across North America will begin in the fourth quarter of 2021 and is expected to be completed by the end of 2022,” the company said. NYAB employs nearly 400 workers at the Watertown plant; the manufacturing change will eliminate approximately 125 Watertown-based jobs and begin “on a date to be confirmed in early 2022”.
New York Air Brake President and CEO Ulisses Camilo, announcing the changes, noted that “more than 70% of NYAB’s freight original equipment customers produce railcars in Mexico, a number that continues to increase. FreightCar America recently moved all car manufacturing to Castaños, Mexico, which is close to Ciudad Acuña. The Greenbrier and TrinityRail companies also have significant Mexican manufacturing operations near Ciudad Acuña.
Ciudad Acuña (formerly Las Vacas or Villa Acuña) is located north of Coahuilaestado (State of Coahuila) in northeastern Mexico. The city sits on the Rio Grande (Río Bravo del Norte) just across the US-Mexico border from Del Rio, Texas, and is a port of entry. Ciudad Acuña, a commercial and manufacturing center in Mexico’s agricultural hinterland, is the fourth largest city in the state of Coahuila and the fastest growing city in Mexico. The Del Rio-Ciudad Acuña metropolitan area is the seventh largest binational metropolitan area along the US-Mexico border. It is also known as “Tierra de la Amistad”. The population of the “micropolitan” area of Del Rio was 55,000 in 2015, and the population of the metropolitan area of Ciudad Acuña was 225,000 in 2015. The 2015 population of the binational metropolitan area of Grand Del Rio-Ciudad Acuña was 280,000.
Ciudad Acuña is not directly served by rail, but Union Pacific, which serves Del Rio, Texas just across the border, connects to Ferromex at Piedras Negras / Eagle Pass, located south of the city. A Mexican highway (2) connects Ciudad Acuña with other urban centers in Coahuila and Texas. The city also has an international airport.
Several US-based companies have opened factories, or maquiladoras, in Cuidad Acuña, “given its 100% union-free status,” according to Wikipedia. Among these are Bendix Commercial Vehicle Systems LLC, a sister company of the Knorr-Bremse Group, the parent company of NYAB ((brake and hydraulic parts); Irvin Automotive Products (automotive seat components); Gentherm de México (heaters automotive seats); Caterpillar (mining truck components); RESCO Electronics (manufacture of wire harnesses and cable assemblies) and Toter Inc. (trash cans, curbside trolleys).
“New York Air Brake is a global company operating in an ever-changing global market,” said Camilo. “Throughout our history, this company has successfully evolved its manufacturing approach to better serve our customers. Our strategic direction for manufacturing has long been to capitalize on our sites and core competencies, always aiming to align production closer to the final assembly point. The accelerating pace of globalization is a factor that puts greater pressure on deliveries across the enterprise. Our presence in Mexico is a crucial connection point in our growth plan in North America. While Watertown’s manufacturing operations will have the greatest impact, the site has been and has been the heart of our business for over 130 years. It won’t change. We will remain a committed and active corporate citizen in the community of Watertown and in Jefferson County in general. “
“Sharing today’s news with the workforce provides as much notice as possible to assist affected employees in this transition,” added Camilo. “Supporting our own is a responsibility we just won’t waver on. We will take action to help our affected employees take the next step in their careers. This includes severance pay and benefits and job placement services. Over the coming weeks and months, we will be actively working with outplacement and government agencies to initiate this process.