Industrial Rail lays off 85 people
Industrial Rail Services Inc. in Moncton has laid off 85 employees, CBC News has learned.
The layoffs come after engineers found a problem with the frame of cars the company had been contracted to rebuild for VIA Rail.
The project is also well behind schedule.
Earlier this month, the company sent out notice that it might have to lay off its nearly 200 employees as it fixed the floor problems.
IRS officials said Tuesday that the 85 layoffs are indefinite while they try to figure out how to solve the framing problem in the rail cars it's refurbishing.
The affected employees range from skilled labourers to administrative staff, officials said.
Another 87 employees are working on other projects with the company, according to officials.
Chris Evers, the general manager of the Moncton plant, said he's not sure what will happen next.
"What we're trying to do here all along is be as honest and transparent with people in the building and tell them we're working on it," he said.
"I mean, I got a notice myself. It's no fun getting one and not knowing what the outcome will be so I won't comment, not knowing when it'll be resolved."
Evers did, however, say that the layoffs will affect the bottom line.
"You know, you don't get cars out, you don't get cars in. You don't get cars in, you don't make milestones. It will have a big effect. There's an inevitability."
VIA was unaware of the layoffs, according to chief operating officer John Marginson.
"We said to them, 'Look, don't worry about the seat attachment issue. We'll look after it. We don't want you disrupt or delay production coming out of your facility and you should continue on with the regular scope of work that you have to do,'" he said.
Marginson said he believed the problem had been resolved.
VIA officials will now have to meet to discuss how to proceed, he said, expressing concern about the effect on IRS employees.
"With the ongoing uncertainty here, once employees have left — and even the employees that haven't left — they could start looking elsewhere for them and their families," he said.
Marginson had previously expressed frustration about IRS lagging behind on the $109-million contract to refurbish 98 VIA Rail coach cars. As of March 2, only 10 had been completed, he had said. He was expecting at least 27.
Industrial president Richard Carpenter said at the time that issues had cropped up during the process of fixing up the 35-year-old train cars.
Among the problems, engineers found a problem with the seat attachment, which involves a piece of framing underneath the floor.
It's unclear how many of the cars have the problem.
Industrial Rail is a full-service locomotive and passenger railcar facility specializing in equipment repairs, remanufacturing, modifications, and refurbishment.