Rail manufacturer Wabtec’s higher sales last quarter counterbalanced expenses related to ongoing labor negotiations at its plant in Erie, Pennsylvania, executives said on an earnings call last week.
EVP and CFO John Olin noted the company’s profit margins were down over the quarter, driven by “inefficiencies we’re experiencing at our facility in Erie behind the strike.”
While sales were up 17.5% YoY last quarter, hitting $2.4 billion, gross profit margins were down .3 percentage points.
Two chapters of the United Electrical, Radio and Machine Workers of America have been on strike since June 22 after six weeks of contract negotiations failed to bring a new labor agreement.
The two parties last met on July 26 to resume negotiations, but no deal has been reached.
“After waiting 12 days to meet, Wabtec told us that rather than negotiate, they’re maintaining their position from their July 11th proposal,” UE 506 said in a July 26 Facebook post. “They have offered no new proposals, just a letter stating they’re maintaining their position.”
According to a July 26 letter from Wabtec Erie Plant Manger Joe Cavalier addressed to UE Local 506 President Scott Slawson and UE Local 618 President Karleen Torrance, the company maintains its position on all issues outlined in its July 11 proposal.
“Wabtec remains interested in reaching a mutually beneficial collective bargaining agreement,” Cavalier said in the letter. “However, the Company will not agree to settle this dispute on terms and conditions that would further degrade the competitive position of the Erie Plant.”
The two sides have not set a date on when they’ll meet again. Wabtec and UE did not immediately respond to requests for comment.
This is the second time in four years the UE Locals 506 and 618 have conducted strikes against Wabtec. The chapters last went on strike in 2019, after the plant’s previous owner, GE Transportation, merged with Wabtec in February of that year.
The strike lasted nine days, but negotiations lasted 128 days, ending with a new four-year contract agreed upon in June 2019.
The labor issue comes as Wabtec plans manufacturing expansions elsewhere. Earlier this month, Virginia Gov. Glenn Youngkin announced Wabtec was investing $2.7 million to expand its facility in Salem, Virginia. The expansion is expected to create 38 jobs.
