FreightCar America is moving to acquire the rail operations of Navistar Inc. in Cherokee, Ala.
The transaction is expected to close this week. The amount of the agreement was not disclosed.
FreightCar had been subleasing a “substantial portion” of the Shoals facility since 2013, the company announced. Retirement Systems of Alabama had owned the facility.
FreightCar now becomes the sole tenant of the approximately 2.2 million square foot facility, which was built for the manufacture and repair of railcars. The company will also be offering employment opportunities to most of Navistar’s approximately 200 employees on site, the company said.
In addition, FreightCar will purchase select operating equipment and inventory at Cherokee, and receive a one-time payment to cover future operating costs, including rent payments at the facility. Net proceeds to FreightCar will be approximately $3 million at closing.
“This acquisition will allow us to now control our own destiny and benefit from the full economics of all future railcars built within the Shoals facility,” President and CEO Jim Meyer said. “This is good news for our customers, our brand, our products, our people and the Shoals community.”