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Rail News Home Rail Industry Trends

2/19/2003



Rail News: Rail Industry Trends

Greenbrier, ACF might start up their own castings company after failed Buckeye bid


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Although The Greenbrier Cos. Inc. and ACF Industries Holding
Corp. recently lost out to Rail Castings Corp. in a bid for bankrupt Buckeye Steel Castings Co., the suppliers plan to establish their own castings company.


Greenbrier and ACF submitted the only other Buckeye bid through a jointly owned limited liability company, Ohio Castings Company L.L.C., which the companies plan to capitalize "with adequate equity and aggressively examine other industry supply options," said ACF Vice Chairman Jim Unger in a prepared statement.


ACF has been Buckeye Steel's largest customer and Greenbrier, a major customer, said Unger, adding that the companies' bid had the support of other large rail-car buyers.


"We wanted Buckeye to succeed and believed that an ownership interest by its key customers would ensure Buckeye's future competitive viability," he said.


The North American rail-car truck castings supply situation "has become untenable," Unger and Greenbrier President and Chief Executive Officer William Furman believe.


"Only one other domestic seller is today accepting orders," said Furman, adding that available offshore sources are more expensive.


Unger and Furman believe the rail industry needs at least two strong, independent casting suppliers. To that end, Ohio Castings recently retained law firm O'Melveny & Myers L.L.P to review the situation and issue a report.


"Ohio Castings remains a proactive entity; we intend to press forward to protect our own interests and seek a solution for the industry's difficulties," said Furman. "We believe a prompt, objective industry review should be conducted involving senior level representatives of all interested parties including buyers, sellers and relevant senior government policy officials."


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