Banking & Finance

Vertex In Joint Venture With Private Investors, Chinese Freight Car Firm

By Cece Nunn, posted Jun 11, 2015

Vertex Rail Technologies has changed its name to Vertex Railcar Corp. and entered into a joint venture with private equity investors and a Chinese freight car manufacturer, the company announced Thursday. The company's vision, however, has not changed.

“The partnership will allow Vertex to rapidly ramp up its business and to scale up its new production facility in Wilmington, NC,” a news release said.

The new company, announced in November by Gov. Pat McCrory and state and local officials, has experienced delays as it works to set up shop at 202 Raleigh St., Vertex Railcar Corp. CEO Don Croteau has said, because of a delay in the release of federal regulations regarding the manufacturing of rail cars.

“The federal government’s updated tank car regulations have finally been released, and as a result, the build out and material procurement for Vertex’s facility in Wilmington is rapidly moving forward,” the news release said. “It will still provide the much-discussed 1,300 jobs within the community over the next ten to twelve months.”

Croteau will continue as CEO of Vertex Railcar Corp and will serve as a member of Vertex Railcar Corp.'s board of directors.

“Katherine Perduta, a partner in Vertex Rail Technologies, LLC, will also serve as a member of the Board,” the news release said.

The president of Vertex Railcar Corp. is Donghui Zhang and the secretary is Wei Cheng, according to documents filed with the N.C. Secretary of State's Corporations Division.

The announcement detailed some of the company's plans to respond to a growing demand for rail cars.

“The initial production phase in Wilmington will focus not only on replacing outdated DOT111 and CPC 1232 tanks cars with an innovative design geared to comply with government regulations, but also on producing covered hopper railcars,” the release said. “With the support of its two partners, one of which is the world’s largest railcar manufacturer, Vertex is already planning to expand production to include additional railcars. Should Vertex decide to expand it production capability to different designs, it may lead to doubling the facility in Wilmington within three to four years.”

The release said the company's “commitment to the Wilmington community” will also remained unchanged as a result of the joint venture. “Vertex Railcar Corporation will continue the campaign to 'Be Good and Do Good,' supporting both its employees and the community as a whole. Hiring for the facility is underway, and the Company has already issued several charitable grants to local organizations through Vertex Outreach Services.”

In an interview last week, Croteau said the contributions to local organizations, including Nourish NC and First Fruit Ministries, had totaled $64,000 to local organizations so far.

As the company has made progress toward its efforts to produce rail cars, including upfitting the property on Raleigh Street, scheduling federal certification of its cars for this summer and fall and hiring additional employees, according to Croteau, the CEO is also contending with filing for Chapter 7 bankruptcy in Massachusetts for the firm he used to lead, Vertex Fab & Design. That firm has nothing to do with Vertex Railcar Corp., Croteau has said.

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