Thursday, March 05, 2009

Greenbrier Cos.: GE Railcar cancelation would hurt

Written by  Luther S. Miller, Senior Consulting Editor

Greenbrier Cos. Inc. says it could be forced to trim expenses, and lay off more employees, if GE Railcar Services Corp. holds firm in reducing an existing delivery contract of 11,900 railcars over an eight-year period. Greenbrier said GE Railcar, a subsidiary of Fairfield, Conn.-based General Electric Co., "desires to substantially reduce, delay, or otherwise cancel railcar deliveries."

Greenbrier added, "The 11,900 railcars under the contract represent about 75% of the company's current new railcar manufacturing backlog."

Last month Lake Oswego, Ore.-based Greenbrier temporarily closed a plant in Mexico, due to the current economic malaise.

Greenbrier says it still is discussing the matter with GE Railcar "for potential modifications" to the existing contract. The current contract calls for delivery of 500 cars to GE Railcar in 2009, with the rest to be delivered in the following seven years.           

"Greenbrier will continue to operate its flagship Gunderson manufacturing facility in Portland, Ore., which has a strong marine backlog and provides design, purchasing, and engineering resources to all Greenbrier plant locations," the company said in a statement.