State suspends training program as hiring stalls at Vertex

State suspends training program as hiring stalls at Vertex
County inspectors found Vertex in violation of state law multiple times. (Source: WECT)

WILMINGTON, NC (WECT) - Vertex Rail Technologies came to town advertising they would hire 1,300 workers.

Governor Pat McCrory made a special trip to Wilmington in 2014 to promote the financial boon Vertex Rail would generate here. The state invested hundreds of thousands of dollars in improving the road and railway system outside the future Vertex Rail facility. The community college system invested tens of thousands more to create a customized program to train welders for Vertex.

But two years after the big announcements, most of the promised jobs have not materialized. Meanwhile, Vertex has shifted gears from high profile press conferences. More recently, they've sent brief and somewhat vague written responses to media inquiries about how many people work for them, and their future hiring plans.

For Kenneth Bomhan, who spent nine months commuting back and forth to Cape Fear Community College's Burgaw campus to train for a job at Vertex, the company's failure to hire as many workers as expected is more than frustrating.

"It's playing with people's lives," Bomhan told us. "I used to work on railcars. I have the experience…. I was AAR certified. They've told me that they are very interested but that's far as I get with them. And to have those skills that could lead to a career that could pay the bills, it's very disappointing and heart breaking that you can't get in there and do the work."

The NC Community College System spent $24,000 starting in March of 2015 on a customized program to teach students the specific welding techniques needed to work on Vertex Rail cars. Over the next year, 180 students participated in Vertex's CFCC training programs.

The state community college system does not track how many of those students are ultimately hired by Vertex. But during the course of a WECT/WSFX investigation into the stalled hiring, we learned that the state suspended Vertex's customized training program in the spring of 2016. At that point, they had 289 full-time employees.

"In May, when we recognized that the company was not continuing to grow, that's when we realized that we would not expend any additional customized training program dollars to support the training needs for Vertex," explained Maureen Little, who serves as the Vice President of Economic Development for North Carolina Community Colleges.

The money for the Vertex training at Cape Fear Community College was part of a $12.5 million annual allocation from the state legislature for customized workforce training. To be eligible for that funding, companies must demonstrate that they are creating jobs, investing in new technology, or working to enhance the productivity of their existing workforce.

Students are able to attend these customized training programs at no cost, thanks to the program that is paid for by state tax payers.

But workforce hopefuls, and some members of the public which subsidized support for Vertex, are concerned by mixed messages coming from the rail car company.

In May, the same month that NC Community Colleges suspended the training program, Vertex laid off 60 workers while at the same time announcing expansion plans. They blamed market forces beyond their control. Specifically, depressed oil prices that led to decreased demand for their rail cars.

In January 2017, in response to a request from WECT/WSFX about current workforce numbers and hiring plans, Vertex Marketing Coordinator Mara Chiarilli emailed us, "Vertex will be increasing its workforce by 25% over the next six to eight weeks" to assist with new car production. "For competitive reasons, Vertex does not share its employment room statistics."

We reached back out in February for an update, and to request an interview. Chiarilli responded, again via email.

"We have in fact resumed production as previously reported and we are in the process of hiring the workers mentioned as well as hiring for several specialty positions to support our production efforts. We appreciate your interest but we will not provide any further details or interviews at the moment."

People like Kenneth Bomhan, who have submitted applications again and again after training to work at Vertex, are losing faith that the good job they'd hoped for at Vertex will ever happen.

"Earlier we had people from Vertex come out and say that by October they'd be hiring. Of course, we'd heard this prior to going to school. First, it would be January, then it would be February, March, April…. It raises suspicion…. and that's why I'm trying to get to the bottom of it," Bomhan said.

Vertex's rocky history in other parts of the country may be adding to the skepticism about their future here. Vertex Fab & Design, which was owned by Vertex Railcar CEO and founder Donald Croteau, filed for bankruptcy in Massachusetts in 2015.

Additionally, the lack of good paying jobs in the Wilmington area may have job seekers more focused on the goings on at Vertex than they would be otherwise. When the company came to town, Vertex advertised the average salary for their workers would be $40,000.

"Desperate," Bomhan described of how he feels about his situation waiting to be hired. "Because right now, I'm out of work, my wife is fighting to get disability. We have bills to pay and I need a good paying career. Not just any old job, and there's a lot of people that's like me."

New Hanover County Commission Chair Woody White said that they are always encouraged when companies like Vertex come to our area with plans to hire workers, but it is hard to know on the front end whether they will be successful.

"Due to the newness of their concept and products, and the lack of a verifiable financial history, incentives [for Vertex] were never considered by our county. But we hoped they would create the number of jobs they advertised, and we still do," White said.

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