Business
FreightCar America, Inc. Completes Key Steps in Previously Announced Manufacturing Repositioning
Company continues to reposition the business with the objective to become the lowest cost, highest quality producer of railcars in the industry CHICAGO, Oct.
About this update from Freightcar America, Inc.
[{"type":"text","content":"Company continues to reposition the business with the objective to become the lowest cost, highest quality producer of railcars in the industry\nCHICAGO, Oct. 12, 2020 (GLOBE NEWSWIRE) -- FreightCar America, Inc. (NASDAQ: RAIL) (“FreightCar America” or the “Company”) announced today that it has made significant progress in its manufacturing repositioning and business transformation strategy.\n Highlights: Successfully finalized early termination of the lease at Cherokee, Alabama (“Shoals”) manufacturing facility effective February 28, 2021Completed Association of American Railroads (“AAR”) certification audits for new joint venture facility in Castaños, Mexico (“Castaños”) and now awaiting approval to start shipping railcarsCastaños completed its first car in early September and continues to ready itself for full production in 2021Obtained new asset-backed credit facility to facilitate the business and repositioning process going forward “We are pleased to announce substantial progress in our recently announced plan to reposition FreightCar America to be a much stronger player in the railcar industry,” said Jim Meyer, President and Chief Executive Officer. “First, we have reached an agreement with the Shoals facility owner and landlord, the Retirement Systems of Alabama (“RSA”), to exit our lease as of the end of February 2021. We will exchange infrastructure-related equipment at the facility in consideration for the early termination of the lease. This agreement is consistent with our previous announcement and go forward planning. We will retain all tooling and other assets specific to manufacturing railcars, all of which will transfer to Castaños. Our agreement with the RSA solves the fundamental cost and capacity mismatch with Shoals and keeps us on track to reduce our fixed costs by approximately $20 million per year and to reduce our production breakeven to less than 2,000 cars per year when Castaños becomes fully operational.” Meyer added, “We are also providing updates on two other important steps related to our manufacturing repositioning. First, we secured new asset-based financing from Siena Lending Group. This financing replaced our former ABL facility with BMO Harris Bank N.A, and now provides us greater flexibility and the ability to complete the acquisition of the remaining 50% of our JV partnership. Second, the AA...