The Greenbrier Companies

The Greenbrier Companies

Type	Public:
Traded as	NYSE: GBX Russell 2000 Component
Industry	Marine Engineering / Railways
Predecessor	Gunderson Bros. (1919)
Founded	1981
Headquarters	Lake Oswego, Oregon, United States
Key people	William A. Furman, President and CEO (1994-)[1] Mark Rittenbaum, Executive Vice President[2]
Products	Ships, railcars, freight rolling stock
Revenue	$2.61 billion USD (2015)
Number of employees	10,689 (2015)
Website	www.gbrx.com

The Greenbrier Companies is a publicly traded transportation manufacturing corporation based in Lake Oswego, Oregon, United States. Greenbrier specializes in transportation services, notably barge and railroad car manufacturing, railroad car refurbishment, and railroad car leasing/management services. As of 2015, Greenbrier employs in excess of 10,689 people combined at its operations in Europe, Mexico, Canada, and the United States. Formed in 1981 and publicly traded since 1994, the company generates revenues of USD $2.61 billion.

The company has manufacturing facilities in Portland, Oregon, Świdnica, Poland, and three railcar plants in Mexico: Monclova, Sahagun City, and Tlaxcala.

History

Gunderson Inc.

In 1919, Chester Ellsworth Gunderson, son of a Swedish immigrant, founded the Wire Wheel Sales & Service Company, acting as a distribution partner for the Houk Company, Pennsylvania, a manufacturer of wire wheels. His brother Alvin Gunderson joined the company in 1923. In 1925, the company became the Wheel & Rim Service Inc.^[3]

By the 1930s, the company expanded in other automobile parts servicing. After an unsuccessful foray into the fertilizer distribution business, the company began to manufacture trailers, the equipment for which required an investment of over $12,000. In 1937, they began manufacturing dual-axle trailers, suitable for on- and off-road use. The new design of trailers was a commercial success and in 1938, the incorporated company Gunderson Bros. was formed, with its factory in Linnton, Portland, Oregon. In 1941, the company began building ships. The company distributed, installed and pioneered the use of General Motors diesel engines.

In 1938, the company was near bankruptcy, in part due to the effects of the Great Depression, and in part due to the Gundersons' own financial mismanagement. The company's main creditor took control of their accounts, and began to pay their suppliers. However, the company's financial position remained tenuous.^[4]

At the beginning of the Second World War, the company handled assembly work for the U.S. Navy; a 1941 a loan from the Navy enabled Gunderson Bros. to build a shipyard. During the same period, continued debts caused the Federal Government to take the original factory as security. Gunderson also constructed lifeboats, landing crafts and other vessels, as well as trailers for the U.S. Army. A shortage of manpower also led to the first women working in the construction sheds.^[5]

An unusual contract - the RP FLIP research vessel

In 1942, the company became Gunderson Bros. Engineering Corporation.^[6] After World War II, the company had comprehensive facilities for large scale metal engineering, as well as a slipway for launching ships at the Front Avenue plant, and the earlier Linnton plant was closed.^[7] Construction of marine vessels such as tugs, barges, trawlers and more specialised craft continued in the 1950s and 1960s, and by the 1970s the company was building vessels as long as 650 ft (200 m) and as wide as 100 ft (30 m).^[8] Other postwar business lines included metal water towers, large scale metal storage tanks, bridges and structural steel for buildings, as well as specialised equipment such as metal slipways for the McNary Dam (1950s), a dry dock for the Port of Portland (1963), and the vessel RP FLIP (1962).^[9]

The company entered the freight rolling stock business in 1958, with a successful bid to construct 200 boxcar underframes for the Southern Pacific Railroad. The business was successful and profitable, and the order expanded with Gunderson eventually building over 2,000 frames in the first contract.^[10]

In 1965, the Gundersons sold their company to the FMC Corporation. In 1973, the company became the Marine and Rail Equipment Division of FMC (MRED).^[11] By 1979, over 6,000 freight wagons were produced. The following year the early 1980s recession began and orders plummeted. By 1982, only 25 railcars were built. Simultaneously, new developments in rail freight transport led to new products. Ten-car units of Jacobs articulated flatcars for transportation of road semi-trailers were built for the Itel Corporation. Also in the 1980s, the company developed "Twin-Stack" flatcars for double-stack rail transport of intermodal containers in a joint venture with Greenbrier.^[12] The "Twin-Stack" became an important product with approximately 3,000 being produced per year in 1990.^[13]

In 1985, the company was acquired by The Greenbrier Companies, but the Gunderson plant remains a successful facility.

Greenbrier Companies

Articulated well cars with intermodal containers

In 1970, the Commercial Metals Company and M.D. Friedman companies jointly formed a flatcar leasing company: Greenbrier Leasing Corporation. In 1981, Commercial Metals sold the company to Alan James and William A. Furman, the leasing business became part of the Greenbrier Companies.^[14] In 1985, the company acquired the Marine and Rail Car Division of the FMC Corporation (MRED) (formerly Gunderson Bros. Engineering) and renamed it Gunderson, Inc.^[13]

In the early 1990s, the company's sales and profits increased dramatically due to an increase in North American railfreight. The company went public in 1994, and in 1995 acquired TrentonWorks, another rail freight rolling stock manufacturing facility in Canada.^[15]

In 1998, the company acquired Polish freight car manufacturer WagonyŚwidnica SA, and formed a joint venture with Bombardier Inc. in a former-Concarril plant in Sahagun City for the manufacture of rail freight vehicles, named Gunderson-Concarril S.A.^[16] In 2004, Bombardier's stake in the venture was acquired.^[17][18] Another Mexican plant, Gunderson-GIMSA S de L de CV, was formed in 2006 as a joint venture with Grupo Industrial Monclova.^[19]

In 2007, the TrentonWorks plant in Nova Scotia, Canada closed, in part due to unfavorable exchange rates, as well as lower operating costs in Mexico.^[20][21]

Between 2006 and 2008, the company bought several rolling stock equipment companies.^[22]

In 2007, GE Rail Services agreed to a $1.2 billion contract for building over 10,000 rail cars: as a result of the general economic recession initiated by the 2000s financial crisis, GE attempted to alter the terms of the contract which represented 84 percent of Greenbrier's order book; any reduction in the order volume was expected to cause job and revenue losses in addition to those already caused by the recession. The situation led to members of the Greenbrier board being openly critical of their client GE. On 15 December 2009, GE and Greenbrier reached a modified contract agreement in which Greenbrier would manufacturer up to 6000 units for GE. As terms of the contract Greenbrier gained the right of first refusal to manufacture any GE railcar order placed up to December 2018, and a similar right to any vehicle refurbishment up to 2015. Greenbrier also obtained maintenance co-partner agreement for GE's rail rolling stock over a five-year period. The resultant contract gave Greenbrier an order book of at least 4,900 units valued at $430 million plus an option for a further 2,200 vehicles. The reduced contract still represented approximately 40 percent of the North American freight car industry backlog.^[23]

In December 2012, Carl Icahn made an offer to purchase Greenbrier for $20 a share, representing a 5.4 percent premium to Greenbrier's stock price at that time, but his offer was rejected.^[24]

On June 4, 2014, Greenbrier announced a railcar repair joint venture company with WATCO Companies, LLC, called GBW Railcar Services.^[25] At inception the jv operated at 38 locations in North America, with ~2100 employees.^[25]

In 2015 Greenbrier acquired a 19.5% stake in Brazilian railcar manufacturer Amsted-Maxion Hortolândia for $US 15m, with an option to acquire a further 40.5% stake by late 2017.^[26]

In Oct 2016 the The Greenbrier Companies and Astra Rail Management (Astra Rail Industries, Germany, Romania) announced they intended to merge their european activities into a joint venture "Greenbrier-Astra" - as part of the agreement Greenbrier was to pay $60million total to Astra Rail, with the joint venture becoming 75% owned by Greenbrier.^[27]

Products and services

Marine

Under the name Gunderson Marine LLC, the Portland, Oregon, United States plant manufactures ocean-going conventional deck barges, double-hull tank barges, railcar/deck barges, barges for aggregates, and other heavy industrial products and ocean-going dump barges. In 2014, Gunderson Marine received two separate orders from Kirby Offshore Marine to build two articulated ocean-going and oil chemical tank barges, otherwise known as ATBs. Both ATBs should be completed in 2016.

Rail vehicles

North America

Under the names Gunderson LLC (Portland, Oregon), Gunderson-Concarril (Sahagun City, Mexico, in a former Concarril plant) and Gunderson GIMSA (Monclova, Mexico), both intermodal and conventional freight cars are produced;including boxcars, center partition cars, covered hopper cars, double stack cars, flatcars, gondola cars, tank cars, auto racks, and two proprietary automobile carriers, the AutoMax and Multi-Max.

Europe

Under the name Greenbrier Europe (plant in Świdnica, Poland), conventional freight cars are produced.

Repair/refurbishment

Formerly, subsidiaries Gunderson Rail Services LLC and Greenbrier Europe provide repair, refurbishment and component services for railcars in North America and Europe. However, as of June 4, 2014, the repair division is no longer associated with Greenbrier, and is now a standalone joint venture with WATCO Companies called GBW Railcar Services, LLC.

Leasing/management

Under the name Greenbrier Leasing Company, LLC, third parties can lease railcars from Greenbrier's 9,300 car fleet. Subsidiary Greenbrier Management Services manages a fleet of approximately 269,000 railcars, predominantly owned by third parties.

See also

• List of companies based in Oregon

References

Sources

• Thomas Derdak; Tina Grant (1997). "The Greenbrier Companies". International Directory of Company Histories. 19. St. James Press.  (online chapter via www.fundinguniverse.com)
• E.M. Lundquist; Bruce Harmon; Kathy Hinson (February 2000). "Gunderson : A history of an Oregon company" (PDF). www.gbrx.com. Gunderson, The Greenbrier Companies. 

External links

• The Greenbrier Companies, 2006 Annual Report