Posted 31 October 2017 - 12:55 PM
The Fort Worth plant was built specifically to shutter the Erie plant, despite assurances from GE that wouldn't happen. For domestic locomotive production I suspect Fort Worth will be it for some time going forward. Export production will occur at foreign plants as they come online.
When the plant first opened there was a rush by BNSF in particular to acquire as many Tier III locomotives as possible before the Tier IV mandate went into effect. Locomotives from both Erie and Fort Worth were delivered in the first couple years. As the plant made its transition to the Tier IV locomotive, BNSF purchased several early production units prior to the Tier IV mandate. This allowed BNSF to take delivery of the 4200 series Tier III units later on, which are known as Tier IV credit units.
I'm not part of the mechanical department - I only operate the locomotives - so I couldn't tell you what the advantage of Tier III vs. Tier IV locomotives are. They run about the same as far as I can tell.
At the time the plant opened, railroads were surging from record volume lows in 2009 and 2010. BNSF like many others needed to bring a lot of stored power online to accomodate the increased traffic. Locomotives being returned to service from long term storage often have problems and require major overhaul. A good number of the locomotives BNSF had stored were later sold or returned to the lessor which put BNSF in a good position to replace those older less efficient locomotives with new models. It also didn't hurt to have Berkshire Hathaway behind BNSF in a capital expenditure kind of mood. This is why if you drove by the GE plant in 2013-2016 you almost always saw new BNSF locomotives. If you saw other railroad's locomotives, they were often outnumbered by BNSF.
Lately the plant has been transitioning to offer rebuilding services of older GE products in addition to building new locomotives. In my opinion, this is a brilliant strategy since many locomotive components have a long life (frame, trucks, engine) while others need to be replaced more frequently. The GE plant seems to be able to handle a variety of locomotive cores based on the traffic BNSF shuttles to and from the plant.
Business for the railroad seems to come in waves. Right now some business units are trending downward while others are trending upward. Even in a period of steady volume there exists a need to replace older locomotives. GE has improved its product so much over, let's say 1980s models, that a lot of these older locomotives are still going strong. I still see locomotives in road service from before the merger of 1995, for example. Many of these are candidates for rebuilding rather than outright replacement, which again puts GE Fort Worth in a good position to capture this business. Being able to extend the life of older products through rebuilding and creating new products at the same facility is a huge advantage, especially for the largest locomotive manufacturer.
The point I want to drive home is the Fort Worth plant is not an outpost for a fledgling manufacturer. This is the new model for the preeminent locomotive manufacturer. Is the business of building locomotives different from building automobiles, for example? Yes, in particular the waxing and waning of production volume to suit market demand. If GE's locomotive business were shut down tomorrow a massive void would exist and no other manufacturer is in a position to fill it, even during this time of steady volume without pressure for additional motive power.
GE may be motivated to shed non-core businesses (IMO GE is a manufacturer first and foremost so I don't think of the locomotive and mining divisions as non-core), the Fort Worth plant could be sold. If that comes to pass, I hope the plant is sold quickly to a buyer with vision enough to continue the engineering and manufacturing legacy GE has built over many decades.