New Brunswick

Moncton lands new rail car manufacturing plant

A rail car manufacturer says it's going to start production in Moncton at the old CN Hump Yard, starting with 200 new jobs and eventually hoping to employ 700.

ARS Canada Rolling Stock will build rail cars at old Hump Yard, employ up to 700

In July, Treasury Board president Roger Melanson posted photos to his Facebook site of a tour he took of the ARS Canada Rolling Stock operation in Moncton. (Roger Melanson Facebook)

News of a major influx of jobs for Moncton spilled out not from a government announcement but an exclusive report by Radio-Canada on Thursday, with an American-based company saying it will begin producing rail cars at the city's Hump Yard.

Radio-Canada reports Miami-based ARS Canada Rolling Stock plans to start production of grain hoppers, box cars and TC-117 rail cars in Moncton, saying it will create 200 jobs in the first phase of production.

TC-117 rail cars will replace the DOT-111s which were involved in the 2013 Lac-Mégantic disaster, and are being phased out of use by Nov. 1 because of regulations imposed by Transport Canada.

ARS Canada Rolling Stock CEO Arturo Contreras said Moncton was the company's choice to start Canadian production because of its history as a rail town.

CEO of ARS Canada Rolling Stock, Arturo Contreras, said Moncton's history as a rail town made it the company's choice for its new manufacturing operation. (ARS Canada Rolling Stock)
"It has plenty of advantages in terms of logistics, the available skill traits and the very friendly business environment provided by the province that basically led us to decide to start our venture in New Brunswick," said Contreras.

He also pointed to access to two of the province's ports as an incentive to choose New Brunswick.

"Saint John and Belledune offer excellent possibilities for logistics involved for the order supply chain and as important as that is, we chose the Moncton shop because it's on top of the CN hub, which is a class one railroad [allowing] us to connect anywhere in North America once our cars are ready to deliver," he said.

700 potential jobs

The company plans to produce 1,500 rail cars to be used in the Canadian and U.S. markets within the first year of production.

Contreras said the assembly plant will create 200 jobs in the first phase, including welders, mechanics and general labourers.

Many positions are already posted on the company's web site and he hopes to increase the number of employees to 450 after three years and to more than 700 after five years.

ARS Canada Rolling Stock hopes to add 450 new employees after three years and 700 after five. (CBC)
Contreras said renovations to the former CN property have already started.

"We have all the engineering capabilities but basically the shop in Moncton that was built in the old days by CN was built as a maintenance shop, which means that now we need to make overall modifications and preparations to adapt the maintenance shop for a new build," he said.

The site of ARS was most recently owned by the now defunct Industrial Rail Services.

Industrial Rail won a contract to refurbish VIA Rail cars, but declared bankruptcy in 2013 after falling behind in its delivery schedule.

Shawn Graham's Liberal government lost approximately $20 million when the company went under.

The province has not responded to questions about how much, if any, public money is being given to ARS.

Contreras told CBC details of its agreement with the Gallant government to bring ARS to Moncton will be revealed at an announcement in October.

A new generation of rail car

Contreras said the company will start with the production of rail grain hoppers and boxcars and add production of the TC-117 oil cars in two years.

ARS Canada Rolling Stock says it will produce box cars and grain hoppers in 2017 before adding production of TC-117 oil cars. (CBC)
On November 1, old DOT-111 will no longer be allowed to carry crude on Canada's railways.

Following the massive explosion caused by a train derailment that devastated Quebec's Lac-Mégantic, killing 47 people, Transport Canada ordered the DOT-111 be phased out of use.

The TC-117 cars are said to have better thermal protection and are supposed to withstand puncture and other damage better than their predecessors.

Given the new regulations, Contreras said more of the new cars will be needed than can be produced in North America right now, "which means that a tank car seems to be one of the stronger candidates for the future."

"I will gauge that every year, 2,000 cars will need to be produced out of Canada from our facility," he said.

Contreras calls the TC-117 a more complex rail car to build, so the company will be relying on China's CRRC (China Railway Rolling Stock Corporation) Meisha.

"Basically our expertise comes from our technology partner," he said. "They've been producing rail cars for over 50 years now."

Contreras said his company recently signed a contract to produce rail cars in China, and opened a plant in Chicago.

"In terms of start-up, we are going to start as a small player aiming to grow and become one of the main players in the North American market," he said.