THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: MONDAY, June 27, 1994 TAG: 9406290343
SECTION: BUSINESS WEEKLY PAGE: 4 EDITION: FINAL
SOURCE: BY ANN BARRY BURROWS, SPECIAL TO BUSINESS WEEKLY
DATELINE: 940627 LENGTH: Long
``Tens of thousands of miles of tracks have been eliminated over the past 10 years,'' says Walter Hammerle, executive vice president in charge of the American plant.
{REST} The shrinking railroad industry in the United States and Canada has left Plasser with only 10 major customers for its specialized line of railway maintenance machinery. Most of the machines produced by Plasser are bigger than locomotives and more expensive than yachts. The company's staple product is the railway tamping machine, called the continuous action tamper, or C.A.T.
``The bread and butter is the tamping machine,'' says Stanley Bloom, Plasser's administrative manager. ``That is our backbone. That is basically what we are in business for.''
To ensure safe and efficient use, railroad tracks must be continually repaired and cleaned. The most important element in this maintenance is tamping. Plasser's C.A.T. contains a computerized network that enables the machine to move over a section of track and measure any deviations in level and alignment. When the C.A.T. backs up and moves over the section again, it automatically levels and aligns track.
The company continually works to refine and improve the equipment with an eye toward saving railroad companies time, money and manpower. Much of the research and development is done in Austria, but the Chesapeake plant supplies many of the computerized components used in Plasser machinery worldwide.
Among Plasser's improved products are newer models of the C.A.T. that use a satellite machine to roam out from the main section and accomplish work that reduces wear and tear on the large, expensive main unit.
Plasser's so-called Super C.A.T. takes this technology to an even higher level. Trailing behind this model is a robotic broom that cleans the rails, ties and ballast - a railroaders' term for rocks that have spilled out of the track bed. Mounted ahead of the Super C.A.T. usually is a ballast regulator that can scoop up these rocks, and the machine shapes them into the track bed at the customary angle and height.
Plasser American manufactures between 15 and 30 such machines a year. From its robotic broom to its Super C.A.T., the price tag can range from $150,000 to $1.8 million.
Plasser American is a subsidiary of Plasser & Theurer, a private company founded in Linz, Austria, in 1953. Later in the decade the Austrian firm established its North American subsidiary in Canada, then moved operations to Rockford, Ill., northwest of Chicago, on New Year's Day 1961.
Today, Hammerle remembers the bitter cold that greeted him and four other employees when they opened the Illinois plant. As soon as he could, in 1970, operations were moved to the more temperate Hampton Roads.
``We needed to be in the Sun Belt,'' he says. ``It is very important to have year-round facilities.''
The new Chesapeake plant flourished with the high demand for railway maintenance equipment among North American railways. From 65 employees when it opened, the plant now has about 200. Plasser also has 50 other employees around the country, most of them salesmen working out of their homes in strategic cities.
The Chesapeake plant includes 160,000 square feet of office and manufacturing space on 15 acres in the city's South Norfolk section. Plasser has rail lines extending from its workshops to the adjacent Portlock Yard of Norfolk Southern Corp.
Given Norfolk Southern's presence in this area, you might expect it to be a Plasser customer. But Plasser has become more a Norfolk Southern customer: It pays Norfolk Southern track-usage fees to move the mammoth Plasser products out to customers.
Still, company officials say Plasser is holding its own against competitors such as Fairmont-Tamper of South Carolina, Kershaw Products in Alabama and Panderoll-Jackson of Michigan. While others may be serving Norfolk Southern's needs now, Hammerle says Plasser's sales are growing steadily. He declines, however, to release revenue and earnings figures.
But he does concede that profit margins have dropped due to increased expenses. With technological advances, the equipment Plasser produces has been ever more sophisticated and expensive, keeping the dollar volume of sales up - but time-consuming research and increased staff to produce these increased sales have increased costs, Hammerle says.
However, the worldwide market for railway maintenance machinery still looks good to Plasser & Theurer. European train systems, for example, are a huge market successfully tapped by the mother company.
``They give us the lead,'' Hammerle says. The company estimates its share of the world market at 70 percent.
In North America, Plasser claims about a third of the market.
``We get our share,'' Hammerle says.
The easy availability of computer and electronic materials in the United States has helped Plasser American support its Austrian founders with the equipment they need to maintain a rapid pace of technological improvements. The Chesapeake plant's main export to Austria are the computerized systems that enable C.A.T.s to measure and align track.
Plasser officials think they have overcome most of the problems of keeping railroad tracks in alignment, but one problem seems insurmountable: Most machines, no matter how advanced, include mechanical switches and a few large buttons. There are no computer keyboards or screens commanding these operations. The reason: the end-line customer is usually a seasoned railroad man who remembers the days of manual labor - and large buttons - and doesn't necessarily view delicate computer keys as progress.
``They are rough guys,'' says Hammerle. ``A big, burly railroad guy sitting at a computer - it has been hard to convince the railroads that that is the future.'' by CNB