The Greenbrier Companies

The Greenbrier Companies

Type	Public:
Traded as	NYSE: GBX S&P 600 Component Russell 2000 Component
Industry	Marine Engineering / Railways
Predecessor	Gunderson Bros. (1919)
Founded	1981
Headquarters	Lake Oswego, Oregon, United States
Key people	William Furman, CEO, Chairman of the Board of Directors[1]
Products	Ships, railcars, freight rolling stock
Revenue	US$2.5 billion (2018)
Number of employees	18,000 (2019)
Website	www.gbrx.com

The Greenbrier Companies is an American 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. The company is one of the leading designers, manufactures and marketers of railroad freight car equipment in North American and Europe. Greenbrier is a leading provider of wheel services, parts, leasing and other services to the railroad and related transportation industries in North America. As of September 2018, Greenbrier employs in excess of 18,000 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 US$2.5 billion.

The company has manufacturing facilities in Portland, Oregon, Paragould and Marmaduke, Arkansas, Świdnica, Poland, Hortolândia, Brazil and Adana, Turkey, three railcar manufacturing plants in Mexico: Monclova, Ciudad Sahagún, and Tlaxcala, and three in Romania: Arad, Caracal, and Drobeta-Turnu Severin.

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 , 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.^[2]

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.^[3]

At the beginning of the Second World War, the company handled assembly work for the United States 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 United States Army. A shortage of manpower also led to the first women working in the construction sheds.^[4]

An unusual contract - the RP FLIP research vessel

In 1942, the company became Gunderson Bros. Engineering Corporation.^[5] 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.^[6] 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).^[7] 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).^[8]

The company entered the railroad freight car 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.^[9]

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).^[10] In 1979, over 6,000 rail cars were produced. The following year the early 1980s recession began and many orders were cancelled and new orders plummeted; in 1982, only 25 rail cars were built. Simultaneously, new developments in rail freight transport led to new products, such as multi-platform articulated spine car sets for TOFC transportation of highway semi-trailers were built for the . Also in the 1980s, the company developed "Twin-Stack" well cars for double-stack rail transport of intermodal containers in a joint venture with Greenbrier.^[11] The "Twin-Stack" double-stack car became an important product with approximately 3,000 being produced per year in 1990.^[12]

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

The 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.^[13] 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.^[12]

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.^[14]

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 Ciudad Sahagún for the manufacture of rail freight vehicles, named Gunderson-Concarril S.A.^[15] In 2004, Bombardier's stake in the venture was acquired.^[16][17] Another Mexican plant, Gunderson-GIMSA S de L de CV, was formed in 2006 as a joint venture with .^[18]

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.^[19][20]

Between 2006 and 2008, the company bought several rolling stock equipment companies.^[21]

In 2007, GE Capital 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.^[22]

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.^[23]

On June 4, 2014, Greenbrier announced a railcar repair joint venture company with Watco, called GBW Railcar Services.^[24] On August 20, 2018, Greenbrier and Watco announced the discontinuation of the jv to allow both companies to better capitalize on railcar repair demands in the North American market. Under the agreement, the repair shops and employees at each location were returned to management by their previous operators.^[24]

In 2015 Greenbrier acquired a 19.5% stake in Brazilian railcar manufacturer for $US 15m, with an option to acquire a further 40.5% stake by late 2017.^[25]

In October 2016 the Greenbrier Companies and Astra Rail Management (Astra Rail Industries, 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.^[26]

In October 2018, Greenbrier and Saudi Railway Company (SAR) announced that they signed an agreement under which the parties will invest and generate investments totaling 1 billion Saudi riyals (US$270 million) in the Saudi rail industry. Through the joint venture, Greenbrier and SAR will establish a new multi-modal business centered on creating and maximizing existing and new rail routes for freight movement throughout the Kingdom and, ultimately, the Gulf Cooperation Council (GCC) region. The relationship between the companies began in 2015 when Greenbrier was awarded a contract with the Public Investment Fund (PIF) to manufacture nearly 1,200 tank wagons for SAR.

In July 2019, Greenbrier completed the acquisition of American Railcar Industries (ARI), a transaction valued at $400 million.^[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. Recent news includes the 2017 launch of double hull tank barge OneDream, and the 2019 launch of the Columbia Barge, for Sause Bros.

Rail vehicles[]

North America[]

Under the names Gunderson LLC (Portland, Oregon), Gunderson-Concarril (Ciudad Sahagún, Mexico, in a former Concarril plant), Tlaxcala, Mexico and (Monclova, Mexico), both intermodal and conventional freight cars are produced;including boxcars, center partition cars, covered hopper cars, including the Tsunami Gate, a railcar with a door and hatch system that permits shippers to customize the discharge speed of grain, double stack cars, flatcars, gondola cars, tank cars, auto racks, and two proprietary automobile carriers, the AutoMax and Multi-Max.^{[citation needed]}

Europe[]

Greenbrier Europe operates in Świdnica in Poland, Adana in Turkey (Rayvag), Arad, Drobeta Turnu Severin and Caracal in Romania (Astra Rail Industries) for production of conventional freight cars.

Repair/refurbishment[]

GBW is one of the few repair shop networks able to service almost the entire range of railcar types in the North American fleet. A broad array of services are offered from simple running repairs and reconditioning to component parts and custom engineered projects.

Leasing/management[]

Under the name Greenbrier Leasing Company, LLC, third parties can lease railcars from Greenbrier's 10,300 car fleet. Subsidiary Greenbrier Management Services manages a fleet of approximately 378,000 railcars, predominantly owned by third parties. In April 2019 it was announced that subject to gaining regulatory approval, American Railcar Industries had been purchased.^[28][29]

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. ISBN 9781558623538. (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