WATERTOWN — Local officials were caught off guard with the announcement on Wednesday that New York Air Brake will cut about 125 employees over the next several months as part of a realignment strategy for its North American manufacturing operations.
The company announced the layoffs to employees on Wednesday afternoon.
Between 50 and 60 employees will be laid off in January, with the remainder of the jobs coming to an end in March, according to a source who had access to the information from the company.
Cheryl A. Mayforth, executive director of The WorkPlace in Watertown, said she had no inkling about the layoffs until contacted by media late Wednesday afternoon.
“Oh my word,” was her first reaction.
New York Air Brake LLC, a global manufacturer of innovative train control systems for the railroad industry, announced the realignment strategy for its North American manufacturing operations in a press release. The company employs nearly 400 workers at its location on Starbuck Avenue in Watertown.
In order to minimize disruption to customers, the phased transition across North America will begin in the fourth quarter of 2021 and is expected to end by the close of 2022, according to the company.
NYAB will launch production in Acuña, Mexico, and shift capacity and production scope at three U.S.-based NYAB facilities: Salisbury, N.C.; Nixa, Mo.; and Kansas City, Mo.
The company will also complete a substantial manufacturing refocus in Watertown to become a machining operation, according to the company.
Local officials said they didn’t know what that would entail.
Ulisses Camilo, NYAB President and CEO, explained the company’s decision.
“New York Air Brake is a global company operating in an ever-changing global marketplace,” he said. “Throughout our history, this business has successfully evolved its manufacturing approach to better serve our customers. Our strategic direction for manufacturing has long been to capitalize on our locations and core competencies, always aiming to align production closer to the point of final assembly.”
He noted that over 70% of NYAB’s freight original equipment clients are producing railcars in Mexico, and that number continues to climb.
David J. Zembiec, chief executive officer of Jefferson County Economic Development, said he was notified about the layoffs shortly before the company made the announcement.
“We’ll talk to them,” he said. “We’ll work with them.”
Mr. Zembiec said the company made it clear in its announcement that competition from Mexico is the reason for the shift in operations, adding that he could not “speculate what was going on internally.”
“We’ll do what we can,” he said.
Mayor Jeffrey M. Smith also said he was surprised by the news.
“It’s just not good,” he said.
The mayor said companies are relocating to Mexico — where wages are lower — because of decisions made by the Biden administration for raising taxes to pay for its domestic agenda.
“This is not just a Watertown issue,” Mayor Smith said. “It’s affecting communities across the country, and this is an example.”
While it was bad news, NYAB, at least, is not laying off the workers immediately, Ms. Mayforth said.
“At least, they’re giving employees some time to think about their futures and think about what their next moves are,” she said.
She expects the company will notify her officially through a WARN letter since the layoffs impact a substantial number of employees.
The state Worker Adjustment and Retraining Notification Act, or WARN Act, requires employers to issue layoff letters with 90 days’ notice. The state law is stricter than the federal WARN Act’s 60-day requirement and applies to private businesses with at least 50 full-time employees.
With a workforce shortage caused by the pandemic, other local manufacturing companies are in need of hiring workers, so they could hire the dislocated NYAB employees, Ms. Mayforth said.
“We will be available and ready with assisting dislocated workers to locate new jobs,” she said.
As the COVID-19 pandemic continues, these are unsettling times for manufacturing companies, Mrs. Mayforth said. Just earlier this week, she was notified that QubicaAMF, which makes bowling pins, blamed a supply shortage for laying off some of its workforce from its Lowville plant.
Five years ago, 19 hourly production workers at NYAB were let go because of waning product demand. That move came after the company already made a wave of layoffs that began in 2015. Those job cuts included 30 unionized employees in January, adding to the 20 salaried and 30 hourly workers later that year.
In 2015, the company celebrated its 125th year in business with a visit to the local plant by Heinz Hermann Thiele, the parent company’s chairman who died in February. It marked the 24th year after his company, Knorr-Bremse, acquired NYAB.
Mr. Thiele — who was ranked as the 220th wealthiest person in the world by Forbes magazine at the time — remarked on the visit how the Watertown plant would continue to be an integral part in its German parent company. NYAB employed 575 workers back then.
“Nobody can say what the next five years will bring,” Mr. Thiele said in 2015. “It’s going to depend on developing new products and delivering them to our customers.”
It was his first visit to the local facility since 2012, after making annual trips to Watertown to discuss the plant’s business plan. Mr. Thiele was joined by about 120 local dignitaries and business leaders who gathered that day to celebrate the 125th anniversary.
In 1876, Civil War veteran Frederick Eames developed a new brake system and formed the original company before his top salesman took over in his absence. He was shot to death in an attempt to take back the factory six years later.
In 1890, the company was reincorporated as the New York Air Brake Company, with 10 new buildings constructed on Beebee Island, just a short distance from its current Starbuck Avenue site.