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April 17, 2020

Greenbrier Companies closes railcar production in Oregon, US

The Greenbrier Companies (GBX) in the US has suspended the production of new railcars in the Greenbrier Gunderson manufacturing facility in Portland, Oregon.

The Greenbrier Companies (GBX) in the US has suspended the production of new railcars in the Greenbrier Gunderson manufacturing facility in Portland, Oregon.

The move was taken due to the economic impact of Covid-19.

The changes in production and staff are based on the freight railcar demand in the future and the previously announced measures of cost-cutting and strengthening of the balance sheet.

Last week, the facility stopped the production of the double-stack intermodal line, which was operational for 25 years.

This move to stop production is due to excess of intermodal units in the rail fleet in North America and decreased loadings of intermodal rail loadings due to the Covid-19 pandemic.

Additionally, the existing food-grade refrigerated and insulated boxcar line at Greenbrier Gunderson will close in July when the work-in-progress is completed. It will resume operations after the pandemic subsides.

GBX has also laid off 200 employees such as production workers and office staff, who will receive severance packages.

The company has increased its liquidity and cash flow, as well as implemented health protocols to safeguard its business due to the outbreak.

In the current fiscal year, the company has laid off around 20% of its workforce, which is around 3,700 people.

GBX CEO William A Furman said: “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.”

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