YSD INDUSTRIES Local plant will serve as springboard

The new owner likes the work force and products at a local plant.
By DON SHILLING
VINDICATOR BUSINESS EDITOR
AUSTINTOWN -- The Canadian company taking over YSD Industries says it will use the local plant to expand its presence in the United States.
Global Railway Industries said today that it has completed the purchase of YSD's assets for $2 million. Global Railway announced last month that it had signed a letter of intent to buy the assets.
"What we think we bought is a manufacturing facility with a skilled labor force and a well-designed product. We have no intentions of changing that," said Mike Kohut, Global Railway president.
The plant is operating with 67 hourly workers and 18 salaried workers, or 85 total, he said.
YSD, which makes rail car parts at its Henricks Road plant, had 230 employees near the end of last year when financial problems caused it to lay off workers. It had about 120 workers when it signed the letter of intent with Global Railway.
Kohut said the Calgary-based company accepted a contract with United Steelworkers of America Local 2310 with no changes.
"The union was not the problem," he said.
The contract accepted was not the nine-month concessionary pact the union agreed to in January. That contract temporarily cut wages and company contributions to a 401(k) retirement plan.
The contract that was accepted expires March 31, 2005, and doesn't include cuts.
Union officials couldn't be reached to comment this morning.
Changes
Global Railway said it has found ways to change YSD's cost structure that will save $3.2 million a year. Global Railway also said the rail-car industry is picking up, with the number of cars to be built this year expected to double.
These changes will make the company profitable at current sales levels, Global Railway said. The YSD operations are expected to add to Global Railway's earnings in three to six months.
YSD has about $15 million in annual sales.
YSD said in January that it was suffering substantial losses and issued a plant-closing notice to comply with federal law. The plant didn't close, however, as it negotiated a sale with Global Railway.
Kohut said Global Railway has a plant similar to YSD in Oshawa, Ontario, but it is too small to lead Global Railway's expansion in the United States. It also is not as good a geographic fit as the Austintown plant, he said.
Global Railway makes rail car doors and other parts for Canadian freight carriers, while YSD serves the United States market. Global Railway is looking for the purchase to help it reach its stated objective to be a dominant supplier in North America.
Global Railway has been acquiring other companies. Its stock is publicly traded on the Toronto Stock Exchange.
It said the purchase doesn't add any debt to the company and it is funding the deal from its cash reserves, which now stand at $9 million (Canadian).
YSD had been owned by a management team that bought the company from a Cleveland investment firm in 1988.
YSD, which used to be known as Youngstown Steel Door, employed 2,000 people in the 1970s. It was founded in 1924.
shilling@vindy.com