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Chassis manufacturer CIMC Intermodal Equipment is readying a name change to CIE Manufacturing and has plans to move container chassis production to the United States from China.
The production move was compelled by the trade war between the two countries, CEO Frank Sonzala told Transport Topics .
Despite an abundance of affordable labor in China, Sonzala said tariffs made the cost of operating in China increasingly expensive, and he felt the company had to make a move to remain competitive.
“I went to the board of directors, and I said, ‘I have to have a shield,’ ” from tariffs, he said. “And that shield means I have got to have manufacturing in the United States.”
The company is now in the midst of moving the China-based chassis production to facilities in South Gate, Calif., and Emporia, Va. The factories are being retooled to handle production of up to 100 chassis per shift.
On Jan. 28, CIE Manufacturing will unveil its new name and new direction at the South Gate facility, Sonzala said. It also will hire up to 275 employees at the two locations.
The company is a division of China International Marine Containers Group Co., a manufacturer of container boxes and trailers, with more than $13.5 billion in revenue in 2018. It operates in 17 nations and has more than 50,000 employees worldwide.
Sonzala is hopeful that chassis manufacturing is poised for an evolution along the lines of the leap that containerization experienced in the 1950s, when hauling cargo by containerships underwent a period of growth and change.
“The average age of the chassis fleet right now is about 26½ years old,” he said. “A lot of them, up until recently, had been refurbished and had bias-ply tires put back on, spoke wheels, or split rims, which are very dangerous, and basically they repaint them and put them out there, and for maybe a year they look OK, but they’re not roadworthy. I don’t think anything that is 26 years old should be on the highway.”
Sonzala said he believes modern chassis must have radial tires, LED lighting and anti-lock brakes.
The industry is receptive to getting safer chassis on the road. Trucking leaders have long complained that many of the chassis they use at ports, which are provided by the shipping lines, are in poor condition. ATA’s Intermodal Motor Carrier Conference earlier this year voted overwhelmingly to form a subcommittee to study ways to improve the quality of chassis and give trucking companies more choices.
To promote longevity, CIE during production of its chassis will use a cathode metal-coating process in which the finished metal is covered with a thin, solid layer of corrosion-resistant coating.
In November, the company was awarded its ISO 9001 certification for the U.S. facilities several months ahead of schedule. The standard is used by organizations to demonstrate their ability to consistently provide products and services that meet customer and regulatory requirements and to show continuous improvement.
Sonzala said he believes with the move to the U.S. and having facilities on the East Coast and West Coast there will be plenty of room to expand.
“I will predict fearlessly, that even in today’s chaotic economy where no one is really sure what is going to happen tomorrow, in this geopolitical environment, we will get our 60,000 chassis that we plan on building and selling in 2020.”
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