HAMMOND | A subsidiary of Amsted Rail Inc. plans to reduce its workforce by 94 employees as a result of business conditions, according to a notice sent to the Indiana Department of Workforce Development.
ASF-Keystone, which is at 4831 Hohman Ave., sent a notice Monday to the state and said the layoffs set to start Dec. 17 are the result of "unforeseeable business circumstances regarding the dramatic downturn in our business."
The notice was sent pursuant to the Worker Adjustment and Retraining Notification Act.
Certain employees who will be laid off are represented by the United Steelworkers Local 2003.
"Bumping rights" exist for union-represented employees in accordance with a collective bargaining agreement. When a more senior employee’s job is eliminated instead of that employee losing employment, he or she "bumps" a less senior employee and takes that employee’s job.
Chicago-based Amsted Rail is a privately held firm, and the ASF-Keystone facility produces steel springs used in sectors including rail and heavy construction.
Bill Carey, a United Steelworkers District 7 staff representative for Local 2003 members, said most of the workers affected are likely union members, but he didn't have an exact tally. He estimated about 150 workers are currently part of the bargaining unit.
The company said in its notice the workforce reduction would be permanent, but Carey said he doesn't expect that because the company took the same action in reducing its workforce in 2009 but brought people back later.
Railroad freight car building, a key segment for the company, is highly cyclical, Carey said, and the layoffs are likely the result of weakness in that sector. There isn't as much replacement of freight cars because, with the nation's natural gas supply and exploration efforts, there isn't as much need to ship coal and buy or replace the freight cars that typically transport the product.
Hammond Mayor Thomas McDermott Jr. said he's concerned about the planned workforce reduction because earlier this year, the city granted ASF-Keystone a 10-year property tax abatement to help it complete a $7.7 million renovation. McDermott said the company completed building and façade improvements, hired more than 20 employees and bought equipment for its new spring production line.
McDermott said he plans to visit with company officials Monday and find out more about the situation and determine whether the company is meeting the terms of its agreement.
"That makes no sense to me," McDermott said. "Just a few months ago, they were telling us how good business was. They were telling us they were consolidating operations into Hammond. It's sad news."