Railroad repairers

Despite the continued investments in highways and a growing number of semi-trucks hauling freight on them, the United States. still relies on its rail systems to handle a large percentage of its goods around the country.

 

Oak Creek-based Nordco Inc. plays a vital role in making sure that the country’s railroad infrastructure remains in good working order. From its Oak Creek headquarters and 130,000-square-foot manufacturing facility, the company designs and builds machines that repair, replace and maintain railroad ties, track, ballast and related systems.

“We make machines that handle three major types of maintenance – tie replacement, rail replacement and surfacing and re-aligning,” said Bruce Boczkiewicz, president and chief executive officer of the company. “They’re all designed for each type of task.”

The company produces several different models of spike drivers, spike pullers, tie exchangers, anchor spreaders, anchor squeezers, adzers (which planes rail ties) and ballast regulators (which level and distribute gravel that goes between rail ties).

Some of Nordco’s machines are sold to contractors that specialize in the installation and maintenance of rail lines. However, a larger amount are sold to the Class 1 railroads such as Union Pacific, Canadian National, CSX and others, Boczkiewicz said.

All of the company’s models power themselves along rail tracks, allowing maintenance and installation crews to quickly move to job sites. Because rail maintenance and repair requires a rail line to be closed, crews need to move quickly, and individual machines that perform one function are able to cover large territories in short periods of time.

Seventy-five percent of Nordco’s equipment is manufactured in its Oak Creek facility, where the company employs 122. The company also operates a small manufacturing operation in Ontario, Candada, where it has 24 workers.

The company performs maintenance and rebuilding of existing Nordco equipment at its Oak Creek plant.

In addition to its main line of rail maintenance and repair equipment, Nordco has four subsidiary companies. J.E.R. Overhaul Inc., based in Arcola, Ill., repairs and rebuilds railroad maintenance equipment made by Nordco’s competitors. Shuttlewagon, based in Grandview, Mo., produces mobile rail car movers. Dapco Industries of Richfield, Conn., makes ultrasonic equipment used in the rail inspection industry. And Nordco Rail Services, based in Lee’s Summit, Mo., provides rail-based inspection services.

In June, Nordco was acquired by the Ontario Municipal Employees Retirement System (OMERS), a Canadian pension fund that has about 10 percent of its holdings in private equity investments. The company was previously owned by The Riverside Company, one of the largest private equity investors in the U.S.

“This is not a new world for us,” Boczkiewicz said. “We’ve been part of private equity groups since 1996. The OMERS folks have been great to work with – they’re looking to the future and look to grow our company with organic growth and through acquisitions.”

The slumping economy has slowed orders for Nordco’s products. The company expects 2009 revenues to be flat or “slightly under” its 2008 revenues. Executives for the company, which has tripled in size over the past three years, believe it has a bright future both because of the new products it has under development and the likelihood that new rail systems will be developed in the United States in the near future.

“The majority of the (federal) stimulus money (for rail) will go toward passenger rail and mass transit, and there is some money for high-speed rail,” Boczkiewicz said. “We’ve been able to sell equipment to the transits before. And we expect some stimulus money to fall through.”

Nordco is also working on several new products that its executives expect to bring to market in the near future, Boczkiewicz said, which could also help generate new sales.

“We have our new product group here (in Oak Creek), and they’re always looking at new machines and new processes,” he said. “We have six to eight new products or major enhancements to our existing products that will get out to the market in the next six to 18 months.”