Amsted Rail (a division of Amsted Industries; website) announced it will lay off at least 120 -- more than a third of the workforce -- from its Petersburg, Virginia rail bearing plant (formerly Brenco). Those left employed will be working fewer hours.

Only two years ago, the factory employed more than 400 and had been hiring. In June 2007, 10% were laid off due to lack of work; the current round brings employment at the plant down to just over 200.

Amsted's Petersburg facility is the largest producer of tapered roller bearings for the North American rail market. It is vertically integrated, producing most bearing components on-site. The company claims a 60%+ market share in new rail bearings.

Rick Louthan, VP of Operations, said: "The company had hoped to be able to avoid this step through a hiring freeze, attrition, discontinuing the use of contract workers and a reduction in overtime worked, but the pace of deterioration has been even more severe than expected."

Mr. Louthan went on to say: "This was a difficult decision, as we recognize that it disrupts many peoples' lives. We will continue with our efforts to minimize the number of job reductions by reducing hours for the remaining hourly employees."

As the economic recession deepens, North America's railroads have had little need for new or rebuilt bearings. Instead, they are faced with the problem of where to park all the unused rolling stock. According to the Association of American Railroads, idled boxcars alone now number more than 200,000, filling railyards and sidings across North America.

Formerly Bronze Engineering Company, Brenco was founded in 1949 to manufacture journal bearings. Brenco switched to tapered roller bearings in the early 1960's. It was acquired by Varlen in 1996 and Varlen was acquired by Amsted in 1999.

In mid-2008, Amsted Rail formed a rail bearing joint venture with European Bearing Corporation to target the fast-growing rail bearing market in Russia and the former Soviet states. That operation strictly focuses its efforts in eastern Europe and does not impact the Petersburg facility. It is also a technical collaborator with India's NEI rail bearing company.

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