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6/24/2003



Rail News: Rail Industry Trends

ACF/Greenbrier joint venture forges rail-car casting deal with Meridian Rail, ASF-Keystone



ACF Industries Holding Corp./The Greenbrier Cos. joint venture Ohio Castings Co. L.L.C. recently reached an agreement with ASF-Keystone Inc. and Meridian Rail Corp. under which Ohio Castings will assume ownership and operation of Meridian Rail's Cicero, Ill., foundry.


Ohio Castings plans to produce side frames and bolsters for ASF-Keystone at the foundry, which will operate as Ohio Castings subsidiary Chicago Castings Co. L.L.C. ASF-Keytone will re-market the side frames and bolsters to the rail industry, including ACF Industries and Greenbrier, in exchange for a minority interest in Ohio Castings.


Meridian Rail had planned to close the Cicero foundry — one of only three North American rail-car casting foundries — at June's end, according to a prepared statement.


"The railroad freight-car building sector has been suffering from a severe shortage of castings. We have not been able to ship rail cars on schedule, and builders have had to lay off employees because we cannot get castings," said ACF Industries Vice Chairman Jim Unger. "We realized that if Cicero shut down, the rail-car building industry could grind to a halt."


In February, ACF Industries and Greenbrier formed Ohio Castings to address casting-supply shortages.


"Financial stability and competitive choice is needed in this sector; we felt that car builders had to play a leadership role," said Greenbrier President and Chief Executive Officer William Furman.


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