US-based rail wagon manufacturer FreightCar America has decided to permanently shut its factory in Roanoke, Virginia.

According to a letter sent to Roanoke Mayor Sherman Lea, the company plans to close the manufacturing facility on or around 11 November.

As a result of the closure, all employees at the facility will be laid off. The termination will be conducted in phases, as the company will continue to retain the necessary workforce at the plant through to November to deliver existing rail car orders.

The wagon manufacturer plans to offer selected employees the option to migrate to other parts of the business.

The closure of the Roanoke facility is aligned with FreightCar America’s long-term cost and footprint reduction strategies. Once complete, the move is expected to generate $5m of savings annually under fixed costs.

FreightCar America president and CEO Jim Meyer said: “The closure of our Roanoke facility is another next step in our ‘Back to Basics’ strategy as we continue to streamline our manufacturing footprint and match it to our future product offering.

“Reducing our fixed costs and achieving world-class output from our much larger Shoals facility have always been core pillars of our turnaround strategy.”

The company’s facility in Shoals, Indiana, is expected to take up Roanoke’s production once it shuts down.

Meyer added: “We have spent the last two years building our talent, processes and overall capabilities at Shoals and the plant is now in a position to accept the Roanoke models and volume.”

Headquartered in Chicago, Illinois, FreightCar America builds a wide range of railroad freight cars. Additionally, it supplies railcar parts and leases cars through its subsidiaries.

It has manufacturing facilities in Alabama, Nebraska and Pennsylvania, as well as in Shanghai, China.