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The Greenbrier Cos. belt tightening is getting even tighter, with additional layoffs and slower production lines in store for the rail-car manufacturer as it navigates the North American economy’s rough waters.
Greenbrier June 11 announced that lower-than-anticipated North American rail-car demand and lower margins on production of certain car types in North America and Europe would result in third- and fourth-quarter net losses.
For the fiscal year, the company expects to break even or report a small loss.
Earlier this year, Greenbrier closed various manufacturing lines and reduced production rates, overhead costs and expenses to deal with the softening market.
The company also downsized commercial and corporate activities, and froze non-essential capital expenditures — all in an effort to save $10 million annually.
In early June, Greenbrier eliminated 35 positions — 25 percent of its corporate and North American commercial staff. That followed gradual layoffs in 2001 of 1,500 manufacturing workers, or 40 percent of the company’s workforce at its three North American plants.
Greenbrier plans more layoffs unless rail-car orders rebound: The company in May laid off 125 workers at its Portland, Ore., plant and will layoff 160 more in July unless Greenbrier receives new orders this month.
The company also plans to close or temporarily shutdown Gunderson-Concarril in Mexico or TrentonWorks in Nova Scotia if new orders aren’t received for fall or winter production.
"Our industry presently is experiencing new order rates at levels about one-third of levels two years ago, and at about one-half of normal rail-car fleet replacement levels of 50,000 cars per year," said Bill Furman, Greenbrier president and chief executive officer, in a prepared statement. "In recent weeks there are some signs of a recovery, but we remain cautious."