Light railcar manufacturer Kinkisharyo International LLC laid off more than 100 employees at its Palmdale plant last year and job cuts are expected to continue in 2020. The company, the El Segundo-based U.S. arm of Kinki Sharyo Co. Ltd. of Osaka, is winding down contracts with the Los Angeles County Metropolitan Transportation Authority, or Metro, and as the work on the railcars wrap up the employees are let go. The Palmdale facility was set up to make 235 cars for Metro to run on the Expo, Blue, Green and Gold lines, said Hiroshi Okamoto, the chief financial officer of Kinkisharyo. “The project has been successful in keeping to a tight schedule and the 235th car is currently in production,” Okamoto said in an email to the Businss Journal on Jan. 9. “As each of the processes for the last car are completed, the positions associated with those processes are eliminated.”   The company delivered its first pilot car to Metro in October 2014, with full production on the first 78 cars starting the following spring in hangar space it leases from Los Angeles World Airports in Palmdale. In addition to the Metro contract, the company has supplied railcars to transit agencies in Seattle, Phoenix and Dallas. Kinkisharyo has been actively looking for and pursuing projects that would keep the facility operational and the staff it trained employed, Okamoto said in his email. But with the limited number of new railcar projects in recent years throughout the country, the company is seeking to broaden its capabilities to include overhaul and modernization work of existing railcars, Okamoto wrote. “However, even this type of work is few and far between, and the timing of the projects are contingent on many factors outside of the company’s control,” he added. Metro, round two? Palmdale City Manager J.J. Murphy said the railcar maker is bidding on other Metro contracts that will be awarded this summer. “We hope they will be competitive with those contracts,” Murphy told the Business Journal. “So yes, as they end existing Metro contracts, I think they can tee up pretty quickly if awarded future contracts.” Palmdale city officials have met with the local management at Kinkisharyo to determine what kind of assistance the city can give during this period of uncertainty. The city has pledged its support if Kinkisharyo is competing either regionally or anywhere in the country for new contracts and will help in any way possible, whether that is from the Antelope Valley’s federal delegation or writing letters of support, Murphy said. “They have been a solid community partner and we’d like to see them expand, frankly,” he added. “That is the message that the mayor and the staff left with.” With the Metro contract coming to an end, Kinkisharyo seeks opportunities to optimize the Palmdale plant going forward, Okamoto said in the email. However nothing firm has been determined yet, he added. “With a unique geographic location and a local work force already trained in railcar manufacturing, the Palmdale facility is of strategic importance to the company and believes it will play a key role in the company’s future,” Okamoto wrote in the email. Aerospace opportunities The layoffs affected 115 employees in 2019. The job cuts started in July, according to a Worker Adjustment and Retraining Notification sent by Kinkisharyo to the California Employment Development Department. Those first cuts impacted 19 welders. Later job cuts in August, September, November and December included welders, wire assembly technicians, interior and exterior assembly technicians and subassembly technicians. In this month and continuing into early February, an estimated 65 positions will be eliminated, primarily assembly technician and material handlers. Within job classifications, the least tenured employees are let go first, Okamoto said. The city and Kinkisharyo are working with Antelope Valley College to do job training or retraining for some of the laid off employees. The city is also working with America’s Job Center of California to make sure the former employees have other opportunities, Murphy said. Additionally, the city has been in contact with defense contractors at U.S. Air Force Plant 42 about hiring former Kinkisharyo workers. Plant 42 is a facility used by the Air Force and military contractors such as Boeing Co., Northrop Grumman Corp. and Lockheed Martin Corp. for the manufacture and testing of aircraft. “The skill set some of these people are bringing from Kinkisharyo have a direct correlation with some of the work done at Plant 42,” the city’s Murphy said. “We are trying to marry up the jobs so that specifically the families that are living here in the Antelope Valley, not just Palmdale, are not out of work for a long period of time.” For example, Northrop Grumman’s Palmdale location is looking to hire up to 1,700 new employees in the coming year as it ramps up the final assembly on the new B-21 Raider stealth bomber aircraft for the U.S. Air Force. Between Northrop Grumman and plans by Lockheed Martin to expand its Skunk Works facility in Palmdale, there is going to be sustained growth in the aerospace industry in the region, Murphy said. “As people transition out of Kinkisharyo, I think they will have a plethora of opportunities if they want to go into the aerospace field,” he added. “But we are also working if they want to get schooling in other fields they may have a desire to go into.” Jobs program The laid off workers are represented by International Brotherhood of Electrical Workers Local No. 11 in Pasadena. In 2014, Jobs to Move America reached an agreement with Kinkisharyo to develop readiness training programs for veterans, women and other disadvantaged workers to qualify for manufacturing jobs in Palmdale. Jobs to Move America is a national coalition based in Los Angeles of labor, environmental, civil rights and other groups advocating for good jobs in the transportation industry. Both the union and the coalition was involved in a dispute with Kinkisharyo over a new 400,000-square-foot factory the company was looking to build in Palmdale in 2014. The compamy had threatened to build a manufacturing plant for producing light railcars outside of California until Los Angeles Mayor Eric Garcetti stepped in and facilitated behind-the-scenes talks between the company, the electrical workers union and Jobs to Move America. Kinkisharyo backed off its plans on the new factory in Palmdale after opposition emerged to it from Antelope Valley Residents for Responsible Development, which included IBEW Local No. 11 among its members. The group challenged the project over environmental concerns.
