Mid February Iron Horse Roundup- EMD Announces Closure of London Plant; Steel Silk Road in the Works? 'New' Power For Farmrail, New Brunswick Southern

Two EMD SD80ace's are seen on flatcars outside of Canadian Rail Collision and Refubish's Toronto, ON facility. The locomotives- destined for Brazil- have just been repainted and are part of the last order constructed at EMD's London, ON facility before Progress Rail announced they were closing down the facility. Photo- Oscar Majcher

EMD/PROGRESS RAIL- After a month-long lockout and standoff with the Canadian Auto Workers over a new contract, EMD parent company Caterpillar [NYSE: CAT] announced they were shutting down their London, Ontario plant this month.

Electro-Motive Canada announced it was shutting down its plant, wiping out the jobs of 475 locked out workers as well as 200 non-union staff.

Sixty-two years after it started making locomotives in the city and two years after it was purchased by a subsidiary of heavy equipment giant Caterpillar Inc. the plant was history.

It’s the biggest plant closure the city since 1994 when the Northern Telecom plant employing 2,200 shut down.

It will likely cause another spike in the London-St. Thomas unemployment rate which dropped to 9% last month, but is still the second highest of any major city in Canada.

The lockout of the London workers had been a lightning rod for protests with the company asking employees to take as much as a 50% wage cut. A rally on Jan. 21 drew more than 5,000 people.

According to Caterpillar, a key sticking point with the CAW was wages and temporary hiring of outside non-union contract employees to deal with large orders. While the decision to shut down the London plant has understandably sparked outrage throughout Canada [including calls for the seizure of Caterpillar's assets in Canada- NANESB], it's also worth pointing out that whether it was General Motors, Greenbriar Equity or Caterpillar, EMD remained an American company that happened to have a major plant in Canada the whole time the London facility was open.

Prior to Caterpillar's announcement, members of the CAW Local 27 had blockaded flatcars carrying some of the locomotives from the final order from London's plant before leaving of their own accord. The locomotives are destined for Brazilian mining and logistics firm Companhia Vale do Rio Doce [NYSE- VALE] which operates more than 8700 km of track through three subsidiaries in eastern Brazil.

According to Canadian Railway Observations, EMD also received orders for new power from Norfolk Southern, Brazil's VALE and Union Pacific as well as freight and mining railroads in the UK, Australia, Mauritania and the United Arab Emirates. Meanwhile, Canadian Pacific announced that they selected Progress Rail to undertake an extensive rebuild of their aging fleet of four-axle GP9s and six-axle SD40-2s.

Shortly after the announcement regarding the London plant, Progress Rail hosted a job fair for it's Muncie, IN plant and announced a second one set to take place in early March. Coincidentally, Indiana Governor Mitch Daniels had signed a right-to-work bill a few days prior to Caterpillar shutting down the London plant. The bill makes the Hoosier state the first 'rust belt' state with right-to-work laws.

A Russian-built locomotive brings in freight from across the border with Uzbekistan to the frontier town of Hairatan. Photo- Railways of Afghanistan/Asian Development Bank

AFGHANISTAN- Operations began on a new 45 mile rail line in Afghanistan linking the city of Mazar-i-Sharif with the Uzbekistan border at Hairatan earlier this month.

The inaugural load comprised nine wagons of flour from Kazakhstan and three of timber from Siberia. Unloading began shortly after the train arrived at Naibabad, which lies just east of Mazar-i-Sharif airport.

Nominally operational since mid-2011, the line saw its first test trains reach Mazar-i-Sharif in late December, following further work to reinforce the trackbed and improve security. The line is being operated by Uzbekistan’s state railway under a three year concession signed on August 4, but UTY had been waiting for formal safety approval before starting commercial operation.

In addition to supplying NATO forces in Afghanistan and domestic customers, an expanded rail line could also play a role in transporting much of Afghanistan's untapped mineral wealth to markets in Asia and elsewhere for export.

FARMRAIL/GRAINBELT- According to a press release, Farmail subsidiary Grainbelt Corporation has taken delivery of five additional GP38 diesels.

The press release didn't mention where the GP38s came from, but the prior batch of GP38s were purchased by the western Oklahoma railroad secondhand from the Iowa Interstate Railroad. This brings the total number of units in service on the Farmrail/Grainbelt system to 31, including some of the former

Although agricultural traffic on the 300+ mile Farmrail/Grainbelt system has taken a hit due to drought conditions throughout Texas and Oklahoma late last year, this has been offset by increased drilling activity and shipments of crude oil throughout the Anadarko Basin.

Former Grand Trunk Western GP40-2s seen with a Fort Worth & Western genset at Hodge yard in Ft Worth, TX on Dec 31st, 2011. Photo, JT Leal

FORT WORTH & WESTERN- The Fort Worth & Western acquired a pair of former Grand Trunk Western GP40-2s (nee Detroit, Toledo & Ironton) from Rail Management leasing.

The 1972-built roadswitchers join a fleet of about a dozen second-generation roadswitchers and two gensets on the 275-mile Texas carrier. In addition to being repainted in the FW&W's yellow and blue paint scheme, the locomotives will also receive the name of a historical figure or locale along the route as is custom for the Fort Worth & Western.

NEW BRUNSWICK SOUTHERN- JD Irving's New Brunswick Southern has taken delivery of their first-ever 6-axle locomotives. The Canadian National delivered Helm Leasing SD40-3s #6200 and #6318 to the NBSR in January.

Although one of them has already reportedly been repainted in NBSR colors, both locomotives are currently on short-term lease from Helm and being evaluated for service on the mainline between St John, NB and Brownsville, ME.

[Hat tip- Canadian Railway Observations; Railways of Afghanistan]