Greenbrier and GIMSA Form New Railcar Manufacturing Joint Venture

Oct 16, 2006, 01:00 ET from The Greenbrier Companies

    LAKE OSWEGO, Ore., Oct. 16 /PRNewswire-FirstCall/ -- The Greenbrier
 Companies (NYSE:   GBX) and Grupo Industrial Monclova (GIMSA) announced today
 the formation of a joint venture to build new railroad freight cars for the
 North American marketplace. The railcars will be built at GIMSA's existing
 manufacturing facility, located in Monclova, Mexico. Greenbrier and GIMSA
 will each maintain a 50% interest in the joint venture. Railcar production
 capabilities will include a variety of new conventional railcars, and
 production is expected to commence in the second calendar quarter of 2007
 with an initial focus on covered hopper cars. Capacity is expected to grow
 to 3,000 new railcars annually, with multiple production lines and about
 1,200 direct workers.
     The Greenbrier Companies is a leading supplier of transportation
 equipment and services to the railroad industry. It is the only new railcar
 builder with facilities in all three NAFTA countries. GIMSA is a
 privately-held industrial company founded in Monclova by the Harold R. Pape
 family, in the early 1950s. GIMSA has annual revenues of approximately $300
 million and operates in three principal divisions: Industrial, Mining and
 Commercial. GIMSA's Industrial Division's facility in Monclova currently
 performs other heavy manufacturing.
     William A. Furman, president and chief executive officer of Greenbrier,
 said, "Consistent with our stated strategy, we continue to emphasize lower-
 cost production out of the U.S. and Mexico, rather than our Canadian
 facility, which is currently being used for specialized capacity. We are
 very pleased to be joining forces with GIMSA, a well-respected company
 which has heavy manufacturing capabilities, high quality standards and an
 excellent business reputation. We anticipate Greenbrier - GIMSA will be a
 key contributor to Greenbrier's new railcar production going forward. This
 joint venture will allow us to quickly capitalize on the current demand for
 new railcars, at a modest initial investment of less than $10 million for
 one production line. We are confident that the joint venture will produce
 high-quality freight cars for the North American marketplace, consistent
 with Greenbrier's industry leading reputation in railcar engineering,
 manufacturing and services. The first order for the new facility for 500
 covered hopper cars will be placed by Greenbrier."
     Furman continued, "The Monclova facility is located 125 miles from the
 U.S. - Mexican border, with good rail connections and close proximity to
 key suppliers and customers. The facility has an experienced management
 team headed by the chief executive officer of GIMSA, Mr. Gerardo Benavides
 Pape, grandson of GIMSA's founder. The joint venture will report
 operationally to Mr. Alejandro Centurion, who is senior vice president and
 head of Greenbrier's North American freight car manufacturing operations
 based in Portland, Oregon. Operations in Monclova will be directed by Mr.
 Jesus Gil, chief operating officer of GIMSA's Industrial Division, since
 joining GIMSA in 2005. Mr. Gil has over 20 years of experience in heavy
 manufacturing, including seven years with Trinity Industries as general
 manager of its Sabinas and Monclova new railcar manufacturing facilities in
 Mexico. Under terms of the joint venture, Greenbrier will provide marketing
 and sales, and freight car engineering, manufacturing and procurement
 expertise. GIMSA will provide manufacturing know-how, existing facilities,
 personnel, equipment and infrastructure."
     GIMSA is a major supplier in Mexico of lime and fluxes necessary for
 the production of steel. It also provides other services and products for
 the steel industry and, through its Industrial Division, is a significant
 buyer of steel in Mexico. GIMSA's Monclova facility, built in 1951, is
 located adjacent to the FerroMex main rail line, with 8 industrial bays and
 370,000 square feet of production space on a 59-acre site. Greenbrier --
 GIMSA will occupy a portion of the total plant space. Monclova's existing
 machinery and equipment include: a CNC plasma cutting machine, press
 brakes, milling machines and plate bending rolls. It has the capacity to
 fabricate jigs and fixtures and provides a highly-skilled labor force with
 many years of experience in steel fabrication. GIMSA currently manufactures
 and assembles heavy equipment assemblies, including drilling platforms,
 power generator facilities, locomotive parts, and pressure vessels at
 Monclova. The facility has a multi-national customer base which includes
 Fortune 500 companies.
     The Greenbrier Companies (, headquartered in Lake Oswego,
 OR, is a leading supplier of transportation equipment and services to the
 railroad industry. The Company builds new railroad freight cars in its
 manufacturing facilities in the U.S., Canada, and Mexico and marine barges
 at its U.S. facility. It also repairs and refurbishes freight cars and
 provides wheels and railcar parts at 23 locations across North America.
 Greenbrier builds new railroad freight cars and refurbishes freight cars
 for the European market through both its operations in Poland and various
 subcontractor facilities throughout Europe. Greenbrier owns approximately
 9,000 railcars, and performs management services for approximately 136,000
 ACT OF 1995: This release may contain forward-looking statements.
 Greenbrier uses words such as "anticipate," "believe," "plan," "expect,"
 "future," "intend" and similar expressions to identify forward-looking
 statements. These forward-looking statements are subject to certain risks
 and uncertainties that could cause actual results to differ materially from
 those reflected in the forward-looking statements. Factors that might cause
 such a difference include, but are not limited to, actual future costs and
 the availability of materials and a trained workforce; steel price
 increases and scrap surcharges; changes in product mix and the mix between
 manufacturing and leasing & services segment; labor disputes, energy
 shortages or operating difficulties that might disrupt manufacturing
 operations or the flow of cargo; production difficulties and product
 delivery delays as a result of, among other matters, changing technologies
 or non-performance of subcontractors or suppliers; ability to obtain
 suitable contracts for the sale of leased equipment; all as may be
 discussed in more detail under the heading "Forward Looking Statements" on
 pages 3 through 4 of Part I of our Annual Report on Form 10-K for the
 fiscal year ended August 31, 2005. Readers are cautioned not to place undue
 reliance on these forward-looking statements, which reflect management's
 opinions only as of the date hereof. We undertake no obligation to revise
 or publicly release the results of any revision to these forward- looking

SOURCE The Greenbrier Companies