Vertex Railcar Corp. in Wilmington laid off 61 employees Friday, citing depressed oil prices and the delay of drilling activity across the U.S. as a reason for a reduction in demand for the sand hopper cars those employees were working on.

After the layoffs, the rail car manufacturer has 221 employees at its Raleigh Street facility, according to Foster Sayers III, government liaison, general counsel and public relations manager for Vertex, in an email.

"Vertex is shifting production focus from sand hoppers to pursue new opportunities within the freight car market—including aggregate and food service hoppers. The company will also produce food-grade tank cars in addition to its planned crude oil tankers," a statement from Vertex said Friday.

A release sent by Vertex early Friday afternoon said the company is making "additional significant capital investments to expand its production capabilities in order to produce new types of railcars with greater market demand," but the initial statement did not mention the layoffs.

At least a couple of the employees who were laid off had been hired through Phoenix Hometown Hires, a local nonprofit organization that helps people find jobs, said Will Rikard, executive director of Phoenix Hometown Hires.

"It’s just disappointing news for lots of people in the community, but we're hopeful that it will turn around for the best," Rikard said.

When the company's location in Wilmington was announced in 2014, Vertex CEO Don Croteau said the firm's employment number would reach more than 1,300 and that 10 percent of that number would come from the Hometown Hires program.

Phoenix Hometown Hires and Vertex officials disagree about how many people have been hired to work for Vertex from the program.

Before the layoffs, six of the workers at Vertex had been hired through the organization according to Phoenix Hometown Hires' records, Rikard said. As of Friday afternoon, he had only heard from a couple of those employees to say they were laid off. 

Katherine Perduta, vice president of legal affairs and human resources for Vertex Railcar Corp., said Friday that Vertex has hired 26 workers through Phoenix Hometown Hires, explaining the difference  by saying, "Vertex committed to hiring 10 percent of all shop personnel through the program."

She said Vertex hired 20 from Hometown Hires prior to its September merger with Phoenix Employment Ministry, and hired an additional six following the merger for a total of 26.

"A total of 16 of those hires remain employed at Vertex, which accounts for 10 percent of Vertex's shop personnel," Perduta said. 

Rikard disputes that tally.

"Those numbers are inaccurate and misleading," he said.

Friday's layoff announcement came about because of continuing changes to the world's oil market. Reduced oil prices and delayed drilling activity has reduced the need for "frac" sand and therefore the demand for sand hopper cars, the first types of cars that Vertex produced. As of Friday, the company had produced 271 cars, the company said.

“Railcar manufacturing is a customer-driven industry that sees market conditions and commodity prices change all the time. Because of our global footprint, Vertex understands the challenges that come with the ever-changing nature of the industry,” Croteau said in the first news release Friday. “We are committed to the railcar market and are willing to invest in our business, our factory and our personnel in order to take advantage of market opportunities as they are presented.”

The company's second statement Friday, which did mention the layoffs, said, "As Vertex makes capital investments to expand our production capabilities, we have had to adjust our workforce and lay off some employees who are not required to contribute as we make changes inside the facility and to our infrastructure. As soon as facility improvements and training are complete, we will resume hiring. At this point, we do not have an exact target date. Ultimately, when this process is done it will move us closer to our goal of producing 8,000 railcars per year and employing over 1,000 workers at our Wilmington facility.”

The first news release Friday said Vertex received a new order this week for more than 600 new DOT-117 tank cars and expects to book additional orders for the new types of cars. The company has been awaiting approval from the Association of American Railroads to build the tank cars.

“Vertex will complete all necessary steps to achieve M1002 Certification from the Association of American Railroads (AAR). M1002 certification will allow Vertex to build any type of tank car at the Wilmington Facility," Sayers said in an email. "The company expects to have its M1002 audit take place in the next six to eight weeks. Vertex achieved M1003 certification to build any type of hopper cars at its Wilmington Facility. In fact, Vertex recently passed a surprise inspection from AAR officials, which is routine following official M1003 certification."

During the next several weeks, according to the Vertex officials, the company "will work to improve its facility with additional state-of-the-art equipment, modify its existing jigs and fixtures, expand infrastructure, adjust its workforce and retrain personnel."

Croteau said in the release that the investments will "optimize our manufacturing practices, maximize throughput and allow us to respond quickly to new opportunities in the future. Vertex is very optimistic about our future, and remains committed to growing our business in Wilmington, North Carolina."

Mayor Bill Saffo said he feels confident in Vertex's ability to bounce back from the layoffs.

"Manufacturing will always be a cyclical industry. We've seen it here in Wilmington, with examples such as Corning, GE, plants that have been here in the community that have had to lay people off and then come back as the market improves and hire people back," Saffo said.