ROCHELLE – Nippon Sharyo’s albatross in the form of a contract to manufacture double-decker rail cars for Illinois and California is no more.
California-based companies Sumitomo Corp. of Americas and Siemens will be taking on the job of making 137 rail cars, 88 of which will go to the Illinois Department of Transportation, and they’ll be single-level cars this time around.
Nippon Sharyo has had trouble with the project since September 2015, when a prototype bi-level car failed a safety test. Further challenges and layoffs followed, with the company dropping about 360 workers in the past 2 years.
“We continue to confront technical complications and delays with the bi-level rail car project that have forced us to evaluate the volume of work and the needs at our Rochelle facility,” the company said in a statement in May announcing 110 layoffs.
The amended $371 million contract is expected to “support hundreds of skilled and high-wage manufacturing jobs in California,” and the material suppliers will come from within the country to meet the “Buy America” requirement, according to a news release from Caltrans, California’s transportation department.
Production on the first cars is expected to start within the year at Siemens’ rail manufacturing hub in Sacramento.
Nippon Sharyo opened its $35 million plant in 2012 in Rochelle. The company had 700 workers at its height and produced 1,000 cars in 3 years before the slow-down with the bi-level project.
“The company will continue its business operations going forward with a reduced number of employees to meet the needs of existing customers and contractual responsibilities,” the company told WNIJ in a statement.
In late August, Mayor Chet Olson said the company plans to remain open for at least the next 2 years.