Tornadoes, hail halt production at American Railcar Industries' Arkansas plant

Severe storms that spawned a half-dozen tornadoes and softball-sized hail in northeast Arkansas on Sunday damaged dozens of homes. The storms also wrecked portions of American Railcar Industries Inc.’s (ARI) Marmaduke, Ark., plant. Yesterday, the company announced tornadoes and hail inflicted damage to the tank-car production facility and the firm’s freight-car inventory. However, no employee injuries were reported.

ARI officials have shut down the facility to assess damage and anticipate a production delay for some time. The company’s other manufacturing facilities in Paragould, Ark. and Kennett, Mo., weren’t damaged by the storms.

Meanwhile, ARI reached an agreement with American Railcar Leasing L.L.C. (ARL) to build 1,000 tank cars for the lessor in 2007. The deal includes an option for ARL to purchase up to 300 covered hoppers in 2007, and 1,000 tank cars and 400 covered hoppers in 2008. ARI officials aren’t sure what impact the storm damage will have on fulfilling the ARL contract.

ARI also completed a previously announced deal to acquire Custom Steel Inc. from Steel Technologies Inc. for $13 million plus $5 million for the firm’s inventory.

ARI builds covered hoppers and tank cars, repairs and refurbishes freight cars, provides fleet management services, and designs and manufactures rail-car and industrial components.