OEM PRESIDENT BULLISH ON TRAINS
Thursday, February 18th, 2010 -- 11:07 AM
The president of one of Neillsville?s largest employers thinks a recently announced partnership could lead to 45 new jobs for the area.Wednesday, OEM Fabricators announced a major collaboration with Nordco, a rail equipment manufacturer and railroad services company based in Oak Creek.
OEM is based in Woodville with a location here in Neillsville.
According to a joint press release, the two companies have reached a multi-year agreement to collaborate on component manufacturing, engineering, and supply chain optimization.
The agreement is estimated to have a value in excess of $25-million. Estimates of cost reductions as a result of the relationship exceed four million dollars.
"Basically, we've been working with Nordco for a couple months on a large-scale agreement that will integrate the companies more fully," explains OEM President Mark Tyler.
"We're really driving that relationship more into engineering and supply chain optimization and driving costs out of both companies by working together," he continues.
Despite the appearance, Tyler says this is ?absolutely not? a merger.
Nordco produces a lot of equipment of the rail industry. Tyler says if you see track repair equipment working on the rails, you?re probably looking at something Nordco manufactured. And, OEM probably made some of the parts.
"We are the manufacturer that builds the frames, mechanical components, the canopies, the tanks. The bulk of the manufacturing that happens on the Nordco equipment, OEM will be producing," Tyler says.
And, most of the work for Nordco is done at the Neillsville plant.
Tyler expects this agreement will lead to 40 to 50 new hires for the Neillsville plant. Work done for Nordco accounts for nearly 50% of the business of the Neillsville plant.
"We're very bullish about railroads in general. All of the companies that we work with in rail are having strong years," Tyler says. "Even though the miles of track have been falling in recent years, the utilization of track has been increasing substantially."
"Track maintenance has been a very, very strong area of growth."
2009 was not a good year for OEM. Company revenues were down 30% and employment was down 50%. Their Neillsville location now employs around 60 full-time employees.
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