Greenbrier Might Lose Huge Marine Order

LAKE OSWEGO, Ore. (AP) -- A top marine customer that represents most of the order backlog at Greenbrier Cos. may cancel or postpone orders, the transportation equipment supplier said Wednesday.

Contracts with the customer total about 85 percent of Greenbrier's $75 million backlog.

Greenbrier said that some adjustment to the contract is likely. Greenbrier and the unnamed customer are discussing adjustments to the contracts because of an industrywide demand slowdown.

Greenbrier said "any compensation or alternative production the company receives may not be adequate to replace the lost revenue and margin."

The company slowed its marine production rates in May and has slowed them further since.

Beginning in the fiscal quarter that starts in September, marine production rates will be reduced again as the company shifts its focus to its rail business.

The company predicts that revenue and margins from its marine operations will be lower in the fourth quarter, which for Greenbrier ends this month. It also thinks marine revenue and margin will fall in fiscal 2011.

In its rail segment, Greenbrier said Wednesday it has received orders for more than 1,000 platforms for double-stack trains and 700 covered hopper cars. Covered hopper cars are used for bulk cargo like grain that must be protected from weather.

Greenbrier Cos. has also received a contract to redesign 1,100 existing double-stack platforms to make them larger. The total value of the new railcar orders and refurbishment work is about $130 million.

The new double-stack railcar orders and refurbishment work will be completed this year and next. The orders are from five separate customers, and are considered firm commitments but aren't yet final. Greenbrier said the customers are major North American railroad and leasing companies.

To support these orders, the company is bumping up its staff at its Gunderson facility in Portland, Ore. by 260 to over 900 employees. About 175 of those new workers will be moved from marine production; the rest will be furloughed workers coming back or new hires.

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