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Rail News: Railroading Supplier Spotlight

Updates from Unitrac, Progress Rail, L.B. Foster and CXT


• Healey Railroad Corp. subsidiary Unitrac Railroad Materials Inc. has obtained a three-year contract to supply special trackwork to the Washington Metropolitan Area Transit Authority. The contract is valued at $8 million over the next three years, Unitrac officials said in a prepared statement.

• Progress Rail Services Corp. has reached an agreement with the Canadian Auto Workers union on terms related to the closing of Electro-Motive Canada’s (EMC) operations in London, Ontario, Progress Rail officials said in a prepared statement. The agreement, which union members ratified on Thursday, provides a full settlement of all past, present and future claims and grievances that the union or any employee may have against the company. “While it is regrettable not being able to reach an agreement with the union that would have sustained the London plant, EMC is pleased that the parties were able to successfully negotiate a generous severance agreement for represented employees,” Progress Rail officials said.

• L.B. Foster reported fourth-quarter net income was flat at $6.1 million, or 60 cents per diluted share, compared with $6.2 million, or 60 cents per diluted share in fourth-quarter 2010. Net sales fell 7.1 percent to $137.4 million due to a 23.5 percent sales decline in legacy business, partially offset by the inclusion of Portec Rail Products Inc. sales of $27.9 million, L.B. Foster officials said in a prepared statement. Bookings for the quarter rose 12.7 percent to $127.4 million. Excluding Portec, bookings dropped 10.6 percent year over year.

• In its fourth-quarter earnings report, L.B. Foster provided an update on a product claim involving subsidiary CXT Inc. In July, Union Pacific Railroad notified the company and CXT of a warranty claim under a 2005 supply contract relating to the sale of prestressed concrete ties to the Class I. UP asserted that a significant percentage of the ties manufactured in 2006 through 2010 at CXT’s Grand Island, Neb., plant are cracking and failing prematurely. Since July, material scientists and prestressed concrete experts have been testing a representative sample of the ties for L.B. Foster. So far, they have not identified any “appreciable defects in workmanship,” company officials said in a prepared statement. In addition, a UP customer has claimed  that a sample of ties produced in Grand Island have failed a test contained in the company’s product specification. As a result of that allegation, UP has informed CXT that it intends to remove about 115,000 ties from track, which are a subset of the ties involved in the July 2011 claim. L.B. Foster officials are reviewing the claim and continue to believe that the ties “do not have a material deviation” from the contract’ specifications, they said. Meanwhile, on Jan. 11, CXT received a subpoena from the U.S. Department of Transportation Inspector General, which is requesting records related to CXT’s manufacture of concrete ties at the Grand Island plant. Company officials believe the request is related to UP’s claim, and “CXT and the company intend to cooperate fully with the IG,” L.B. Foster officials said.

Contact Progressive Railroading editorial staff.

More News from 2/24/2012