American Railcar Industries, Inc. (NASDAQ: ARII) (ARI) and Ohio-based US Railcar, LLC (USR)
announced the formation of a joint venture to be named US Railcar Company
LLC (US Railcar Company). The joint venture is being formed to design, manufacture and sell Diesel Multiple Units (DMUs), which are self-propelled passenger railcars in both single- and bi-level configurations. ARI is majority owned by Icahn Enterprises L.P. (NYSE: IEP).
“ARI is excited to participate in this opportunity to join USR and bring ARI’s freight rolling stock manufacturing heritage to the passenger equipment sector,” said ARI President and CEO James Cowan. “Our commitment to expand and diversify ARI’s manufacturing program results from ARI’s desire to grow and build on the expected federal commitment to passenger rail as part of a balanced national transportation system. Through this partnership, we look forward to being an integral part of that new growth with modern passenger rail equipment built in the USA.”
US Railcar Company will be led by President & CEO Michael P. Pracht, a rail industry veteran with extensive experience with the world’s leading rail transportation companies. “These are extraordinary times with growth opportunities for passenger rail in the US,” said Mr. Pracht. “The US Railcar Company DMU is designed to enable new cost-effective and environmentally friendly passenger rail service across a range of corridors and routes, all with a proven, existing equipment platform already in service.”
According to Barry H. Fromm, one of US Railcar Company’s directors, “One of US Railcar Company’s goals is to reestablish American owned passenger train production in the United States.” As Chairman and CEO of Value Recovery Group, Inc. (VRG), Mr. Fromm led a group that purchased USR assets from the former Colorado Railcar Manufacturing Co. (Colorado Railcar) that ceased operations in late 2008.
ARI will provide US Railcar Company with its experience in the production of railcars and ARI representatives will comprise half of the Board of the joint venture. Representatives of VRG will comprise half of the Board and will bring to the venture government contracting experience. Once established, the joint venture plans to produce railcars on order for public authorities and communities to improve public transit, commuter and regional rail service.