FreightCar America is closing its manufacturing facility in Colbert County, with approximately 500 local jobs being terminated in the process.

The company confirmed in a release that its Cherokee, Alabama, plant will be closed, with those operations being shipped to Castaños, Mexico, in an effort to “consolidate.”

The release advised, “The closure of the Shoals manufacturing facility will further align costs and manufacturing capacity with the current realities of depressed railcar demand, which have been magnified by the ongoing COVID-19 pandemic. Additionally, the closure of Shoals will accelerate the Company’s goal to achieve profitability on significantly lower railcar volumes. The Company will continue to produce railcars at Shoals through approximately the end of 2020, with the full closure expected by the end of the first quarter of 2021.”

WAFF reported that FreightCar is coordinating with governmental agencies and other partners to help affected Alabama employees transition to other opportunities. Layoffs will be phased in starting in November and concluding the end of February.

“Our vision was to maintain a permanent presence in Shoals. However, with the depressed rail car market and the devastating impact and ongoing threat of COVID-19, we were left with no choice,” stated Jim Meyer, president and CEO of the company. “Please know we will focus on our people and do our absolute best to take care of them and our customers as we move through this unfortunate reality together.”

The Chattanooga Times Free Press reported that FreightCar is negotiating a lease exit with its Cherokee landlord, the Retirement Systems of Alabama.

Sean Ross is the editor of Yellowhammer News. You can follow him on Twitter @sean_yhn