LAKE OSWEGO, Ore., April 16, 2020 /PRNewswire/ -- The
Greenbrier Companies, Inc. (NYSE:GBX) has suspended new railcar
production at its Greenbrier Gunderson flagship manufacturing
facility in Portland, Oregon due
to the economic impacts of COVID-19. Greenbrier's adjustments
in production and staffing levels respond to current and
anticipated levels of new freight railcar demand, along with its
earlier announced plans to cut costs and strengthen its balance
sheet globally. Greenbrier's Jones Act-compliant marine
business will continue operating.
Last week, Greenbrier Gunderson ended production on its double
stack intermodal line. That manufacturing line has run nearly
continuously for 25 years. The current action is required due
to a surplus of intermodal units in the North American rail fleet
and declining intermodal rail loadings, accelerated by the effects
of COVID-19. Greenbrier Gunderson's current food-grade
refrigerated and insulated boxcar line will close when current
work-in-progress concludes in July. That line may restart
after the current crisis subsides. Workforce reductions at
Gunderson will affect approximately 200 employees, including
production workers and office staff. All impacted employees
are entitled to receive severance packages based on years of
service, which are coordinated with various state and federal
government benefits. Employees are eligible to receive enhanced
government benefits, with Greenbrier-paid severance benefits
bridging to government programs. Access to some public
programs has been delayed due to challenges with registration and
delivery of payments. Gunderson's severance policies are
designed to provide immediate cash to affected workers until
payments are available from the various government programs.
Greenbrier is responding to the current economic downturn by
increasing its liquidity and cash flow to benefit the entire
enterprise, while keeping its workforce safe through rigorous
health protocols in its offices and factories. In North
America, manufacturing workforce reductions have occurred primarily
in Mexico as well as employee
reductions at selected international locations. During its
current fiscal year, Greenbrier has reduced its global workforce by
3,700 people, more than 20% of its total employment,
which exceeded 17,100 people at the beginning of its fiscal
year 2020.
Greenbrier Gunderson's marine operations continue at full
strength with nearly 500 full-time workers and a backlog that
extends through calendar 2020. Greenbrier's worldwide
operations constitute "Essential Infrastructure" and "Essential
Businesses" as defined by the U.S. Department of Homeland Security,
other U.S. and international agencies, and as included in all
"stay at home" orders issued in the jurisdictions where the Company
operates.
Furman stated, "It is difficult to part with Greenbrier
Gunderson workers who have served us for many years and persevered
though this and other national emergencies. Going forward, we
intend to identify opportunities to profitably build railcar
products at Greenbrier Gunderson. Meanwhile, we plan to keep
and deploy some of our most experienced team members to other
locations in our network, where different kinds of railcars are
built. Current conditions require us to simplify and
streamline our organization to increase total liquidity from
$620 million at the end of the fiscal
second quarter to $1 billion by the
end of fiscal 2020."
Furman concluded, "The safe and efficient movement of goods is
integral to economies around the world. Rail transportation
is essential for supply chains in light of the COVID-19 crisis,
providing smoother and safer border crossings and reducing the risk
of viral transmission by human contact. Rail is more
environmentally efficient than other modes of freight
transportation. Its limited use of fossil fuels benefit society and
the planet by producing about one-third of the hydrocarbons per
ton-mile as compared to trucks, and consuming about one-third of
the fuel per ton mile. It will play an important part in any
economic recovery, both near-term and longer-term, when greater
stability and predictability has resumed."
About Greenbrier
Greenbrier,
headquartered in Lake Oswego,
Oregon, is a leading international supplier of equipment and
services to global freight transportation markets. Greenbrier
designs, builds and markets freight railcars and marine barges in
North America. Greenbrier
Europe is an end-to-end freight
railcar manufacturing, engineering and repair business with
operations in Poland, Romania and Turkey that serves customers across
Europe and in the nations of the
Gulf Cooperation Council. Greenbrier builds freight railcars and
rail castings in Brazil through
two separate strategic partnerships. We are a leading provider of
freight railcar wheel services, parts, repair, refurbishment and
retrofitting services in North
America through our wheels, repair & parts business
unit. Greenbrier offers railcar management, regulatory
compliance services and leasing services to railroads and related
transportation industries in North
America. Through unconsolidated joint ventures, we produce
industrial and rail castings, tank heads and other components.
Greenbrier owns a lease fleet of 10,300 railcars and performs
management services for 389,000 railcars. Learn more about
Greenbrier at www.gbrx.com.
"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995: This press release may contain
forward-looking statements, including any statements that are not
purely statements of historical fact. Greenbrier uses words, and
variations of words, such as "aim", "allow," "believe,"
"can," "ensure," "estimates," "has eliminated," "maintain," "may,"
"normalize," "plans," "potential," "preserving," "reducing,"
"seeks," "should," "target," "targeting," "typically," "will,"
"may," "can," "will generate" and similar expressions to identify
forward-looking statements. These forward-looking statements
include, without limitation, statements about future liquidity;
savings generated by reducing capital expenditures, SG&A,
overhead, other expenses; targeting available capital; as well as
other information regarding future performance and strategies and
appear throughout this press release including in the headlines and
the sections "Second Quarter Highlights" and "Business Update."
These forward-looking statements are not guarantees of future
performance and are subject to certain risks and uncertainties that
could cause actual results to differ materially from the results
contemplated by the forward-looking statements.
Factors that might cause such a difference include, but are not
limited to, the COVID-19 coronavirus pandemic and the governmental
reaction to COVID-19 having a materially negative impact on our
business, liquidity and financial position, results of operations,
stock price, and our ability to convert backlog to revenue; our
inability to increase our liquidity and borrowing base as we
anticipate or being delayed in doing so; oil prices remaining
materially lower than recent historical prices; inability to
implement cost savings in the amounts or timelines that we have
planned; the cyclical nature of our business, economic downturns
and a rising interest rate environment; changes in our product mix
due to shifts in demand or fluctuations in commodity and energy
prices; a decline in performance or demand of the rail freight
industry; an oversupply or increase in efficiency in the rail
freight industry; difficulty integrating acquired businesses or
joint ventures; inability to convert backlog to future revenues;
risks related to our operations outside of the U.S., including
anti-bribery violations; governmental policy changes impacting
international trade and corporate tax; the loss of or reduction of
business from one or more of our limited number of customers;
inability to lease railcars at satisfactory rates, or realize
expected residual values on sale of railcars at the end of a lease;
shortages of skilled labor, increased labor costs, or failure to
maintain good relations with our workforce; equipment failures,
technological failures, costs and inefficiencies associated with
changing of production lines, or transfer of production between
facilities; inability to compete successfully; suitable joint
ventures, acquisition opportunities and new business endeavors may
not be identified or concluded; inability to complete capital
expenditure projects efficiently, or to cause capital expenditure
projects to operate as anticipated; inability to design or
manufacture products or technologies, or to achieve timely
certification or market acceptance of new products or technologies;
unsuccessful relationships with our joint venture partners;
environmental liabilities, including the Portland Harbor Superfund
Site; the timing of our asset sales and related revenue recognition
may result in comparisons between fiscal periods not being accurate
indicators of future performance; attrition within our management
team or unsuccessful succession planning for members of our senior
management team and other key employees who are at or nearing
retirement age; changes in the credit markets and the financial
services industry; volatility in the global financial markets; our
actual results differing from our announced expectations;
fluctuations in the availability and price of energy, freight
transportation, steel and other raw materials; inability to procure
specialty components or services on commercially reasonable terms
or on a timely basis from a limited number of suppliers; our
existing indebtedness may limit our ability to borrow additional
amounts in the future, may expose us to increasing interest rates,
and may expose us to a material adverse effect on our business if
we are unable to service our debt or obtain additional financing;
train derailments or other accidents or claims; changes in or
failure to comply with legal and regulatory requirements; an
adverse outcome in any pending or future litigation or
investigation; potential misconduct by employees; labor strikes or
work stoppages; the volatility of our stock price; dilution to
investors resulting from raising additional capital or due to other
reasons; product and service warranty claims; misuse of our
products by third parties; write-downs of goodwill or intangibles
in future periods; conversion at our option of our outstanding
convertible notes resulting in dilution to our then-current
stockholders; as a holding company with no operations, our reliance
on our subsidiaries and joint ventures and their ability to make
distributions to us; our governing documents, the terms of our
convertible notes, and Oregon law
could make a change of control or acquisition of our business by a
third party difficult; the discretion of our Board of Directors to
pay or not pay dividends on our common stock; fluctuations in
foreign currency exchange rates; inability to raise additional
capital to operate our business and achieve our business
objectives; shareholder activism could cause us to incur
significance expense, impact our stock price, and hinder execution
of our business strategy; cybersecurity risks; updates or changes
to our information technology systems resulting in problems;
inability to protect our intellectual property and prevent its
improper use by third parties; claims by third parties that our
products or services infringe their intellectual property rights;
liability for physical damage, business interruption or product
liability claims that exceed our insurance coverage; inability to
procure adequate insurance on a cost-effective basis; changes in
accounting standards or inaccurate estimates or assumptions in the
application of accounting policies; fires, natural disasters,
severe weather conditions or public health crises; unusual weather
conditions which reduce demand for our wheel-related parts and
repair services; business, regulatory, and legal developments
regarding climate change which may affect the demand for our
products or the ability of our critical suppliers to meet our
needs; repercussions from terrorist activities or armed conflict;
unanticipated changes in our tax provisions or exposure to
additional income tax liabilities; the inability of certain of our
customers to utilize tax benefits or tax credits; and suspension or
termination of our share repurchase program. More information on
these risks and other potential factors that could cause our
results to differ from our forward-looking statements is included
in the Company's filings with the SEC, including in the "Risk
Factors" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" sections of the Company's most
recently filed periodic reports on Form 10-K and subsequent Form
10-Q filings. Except as otherwise required by law, the Company
assumes no obligation to update any forward-looking statements or
information, which speak as of their respective dates. Readers are
cautioned not to place undue reliance on these forward-looking
statements, which reflect management's opinions only as of the date
hereof.
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SOURCE The Greenbrier Companies, Inc.