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Subsidized Railcar Maker Racks Up Fines

Thursday, April 30, 2015

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ROCHELLE, IL—A railcar manufacturing facility recently enticed to its location by more than $11 million in government incentives is facing its second federal health and safety case in a year.

Nippon Sharyo Manufacturing LLC, doing business as Railcar Services, opened its plant in Rochelle, IL, in June 2012. A year later, owners announced an expansion.

Nippon Sharyo Manufacturing LLC

Nippon Sharyo Chairman Katsuyuki Ikushima filling in the eye on the Daruma doll at the groundbreaking of the expansion of the company's facility in Rochelle, IL. Nippon Sharyo said it was expanding the plant to comply with U.S. "Buy American" contract requirements.

The expansion was designed entirely to meet Federal Railroad Administration "100% Buy America" requirements, the Japan-based company said.

Before long, however, some of the 400-plus workers at the plant began complaining publicly of hazards.

They said that they "lack basic safety equipment and that some have fallen and been injured as a result of broken equipment such as scaffolding," the Chicago Tribune reported.

"They also expressed concern about exposure to dangerous chemicals, according to Jobs to Move America, a coalition that includes labor, environmental and community groups."

2 Inspections, 2 Citations

Twice in 2014, the complaints led to inspections by the Occupational Safety and Health Administration. Both inspections ended in citations.

Nippon Sharyo Manufacturing

Nippon Sharyo Manufacturing reportedly received more than $1.3 billion in government contracts for the Rochelle plant. The first, in October 2010, was with Northeast Illinois Regional Commuter Railroad Corp. (Metra) for 160 railcars.

In March 2014, the company was cited for its spray finishing operation and fined $4,000, which was reduced to $2,000 in an informal settlement.

The most recent case, stemming from complaints filed by workers Oct. 22, alleges five serious and four other-than-serious violations and set fines totaling $34,550. Those fines have tentatively been reduced to $19,500, and one of the lesser citations was dropped, OSHA records show.

The complaint included "reports of broken and unsafe scaffolding, catwalks, ladders and planks and lack of fall protection around Nippon Sharyo’s rail cars, that have caused worker falls and injuries," reported Mass Transit.

"Workers also raised serious concerns about poor ventilation for those working with flammable chemicals, and lack of protective equipment for welders and other workers."

The latest citations detail hazards related to scaffolding, wiring, work practices and general requirements. The Chicago Tribune said employees had been working on scaffolds that were not braced and relied on plywood boards at 17 feet up that "weren't intended for use."

Progress Illinois
The Illinois Jobs to Move America coalition has protested working conditions at Nippon Sharyo's plant. Workers and former workers have complained about health and safety hazards.

OSHA also inspected the plant on Jan. 20 and Feb. 8, 2015, in response to complaints, but no citations were issued.

The company did not respond Wednesday (April 29) to a request for comment.


The workers' complaints prompted a visit to the plant March 9 by a delegation of Chicago-area community, faith and labor organizations. The visit was organized by the Illinois Jobs to Move America Coalition, which also demonstrated last week against the company in downtown Chicago.

The coalition says Nippon Sharyo has received $1.3 billion in contracts with U.S. public transit agencies in recent years, and The Chicago Tribune reports that various government enttities paid more than $11 million to get the plant to locate in Rochelle.

The incentives included tax breaks and a new $5.5 million rail spur built by the Illinois Department of Transportation to connect the plant to the BNSF Railway.

"Nippon Sharyo's disregard for safety and the well-being of its workforce is absolutely appalling," said Susan Hurley, executive director of Chicago Jobs with Justice.

She accused the company of creating "a climate of fear and intimidation" among workers, adding: "That is also totally and completely unacceptable for a company that has a contract with the state of Illinois."


Tagged categories: EMEA (Europe, Middle East and Africa); Government contracts; Health & Safety; Health and safety; North America; OSHA; Paint application; Railcars; Spray systems; Ventilation

Comment from ken laszczak, (4/30/2015, 5:52 PM)

I may be missing something, but..."OSHA also inspected the plant on Jan. 20 and Feb. 8, 2015, in response to complaints, but no citations were issued." where's the story here? they had some violations, went thru the process and mitigated the fines and have been inspected twice in 2015 with no citations. Sounds like somebody is rousing the rabble. In today's age of cell phone pics and video "show me the violations"! Otherwise it sounds like community organizers and unions squeezing the owner.

Comment from Tom Schwerdt, (5/4/2015, 8:42 AM)

Having 2 followup OSHA inspections with zero citations is an achievement. This sounds more like labor stirring up trouble. Is this a non-union shop?

Comment from Mark Puckett, (5/5/2015, 10:43 AM)

seems like Union tactic attempt to turn up heat...of course in IL its expected

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