American Railcar Industries, Inc. Announces Formation of US Railcar Company, LLC Joint Venture
February 18 2010 - 4:54PM
Business Wire
American Railcar Industries, Inc. (NASDAQ: ARII) (ARI) and
Ohio-based US Railcar, LLC (USR) announced the formation of a joint
venture to be named US Railcar Company, LLC (US Railcar
Company). The joint venture is being formed to design, manufacture
and sell Diesel Multiple Units (DMUs), which are self-propelled
passenger railcars in both single- and bi-level configurations. ARI
is majority owned by Icahn Enterprises L.P. (NYSE: IEP).
“ARI is excited to participate in this opportunity to join USR
and bring ARI’s freight rolling stock manufacturing heritage to the
passenger equipment sector,” said ARI President and CEO James
Cowan. “Our commitment to expand and diversify ARI’s manufacturing
program results from ARI’s desire to grow and build on the expected
federal commitment to passenger rail as part of a balanced national
transportation system. Through this partnership, we look forward to
being an integral part of that new growth with modern passenger
rail equipment built in the USA.”
US Railcar Company will be led by President & CEO Michael P.
Pracht, a rail industry veteran with extensive experience with the
world’s leading rail transportation companies. “These are
extraordinary times with growth opportunities for passenger rail in
the US,” said Mr. Pracht. “The US Railcar Company DMU is designed
to enable new cost-effective and environmentally friendly passenger
rail service across a range of corridors and routes, all with a
proven, existing equipment platform already in service.”
According to Barry H. Fromm, one of US Railcar Company’s
directors, “One of US Railcar Company’s goals is to reestablish
American owned passenger train production in the United States.” As
Chairman and CEO of Value Recovery Group, Inc. (VRG), Mr. Fromm led
a group that purchased USR assets from the former Colorado Railcar
Manufacturing Co. (Colorado Railcar) that ceased operations in late
2008.
ARI will provide US Railcar Company with its experience in the
production of railcars and ARI representatives will comprise half
of the Board of the joint venture. Representatives of VRG will
comprise half of the Board and will bring to the venture government
contracting experience. Once established, the joint venture plans
to produce railcars on order for public authorities and communities
to improve public transit, commuter and regional rail service.
The US Railcar Company DMU was prototyped by Colorado Railcar
through a demonstration project in 2002 and is currently the only
DMU that is fully compliant with Federal Railroad Administration
passenger equipment safety regulations as stated in 49 CFR Part
238. Available in both regional and intercity configurations, the
US Railcar Company DMU is well suited for incremental corridor
development at speeds from 79-to-90 mph. Platform enhancements
currently anticipated include a diesel-electric upgrade, increasing
speeds to 125 mph, making this American-made DMU an attractive
solution for both mature and emerging passenger rail agencies
around the country.
About American Railcar Industries, Inc.
American Railcar Industries, Inc. is a leading North American
manufacturer of hopper and tank railcars. ARI also repairs and
refurbishes railcars, provides fleet management services and
designs and manufactures certain railcar and industrial components
used in the production of its railcars as well as railcars and
non-railcar industrial products produced by others. ARI provides
its railcar customers with integrated solutions through a
comprehensive set of high quality products and related services.
ARI is controlled by Carl C. Icahn, the chairman of ARI’s board of
directors, through his affiliate, Icahn Enterprises L.P.
About Value Recovery Group
VRG is an economic development consulting, government advisory
services and asset recovery and management firm that represents
state and local governments, commercial banks, private investors
and several federal agencies.
Forward Looking Statement Disclaimer
This press release contains forward-looking information that
involves risks and uncertainties, including statements regarding
the joint venture’s plans, objectives, expectations and intentions.
Such statements include, without limitation, statements regarding
the joint ventures prospects, the anticipated performance of its
railcars, and the anticipated growth of the market and market
acceptance for those railcars. These forward-looking statements are
based upon assumptions made as of the date hereof and are subject
to known and unknown risks and uncertainties that could cause
actual results to differ materially from those anticipated. Joint
ventures and the commencement of a new business involve numerous
risks, including difficulties associated with cooperation and
conflicts of interest among the parties, delays, unexpected costs,
and the risk that newly introduced products may contain undetected
errors or defects or otherwise not perform as anticipated. Moreover
the development of the market for the joint venture’s products is
anticipated to be dependent on government support of passenger rail
development and there can be no assurance that such support will be
forthcoming or, even if forthcoming, that the joint venture’s
railcars will otherwise be able to compete successfully. Other
potential risks and uncertainties relating to ARI’s business and
the production of railcars are described in ARI’s filings with the
Securities and Exchange Commission. ARI expressly disclaims any
duty to provide updates to any forward-looking statements made in
this press release, whether as a result of new information, future
events or otherwise.
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