FreightCar America, Inc. (NASDAQ: RAIL) today announced that it has sub-leased approximately 25% of Navistar, Inc.’s Cherokee, Alabama manufacturing facility. Opened in 2008 and located in the Shoals region of Alabama, the state-of-the-art production facility was designed to efficiently build a wide variety of railcar types. FreightCar is preparing the Shoals facility for operation, with the first deliveries of new railcars expected in the second half of 2013. When fully operational, the facility will have the capacity to build over 7,000 railcars per year.
In connection with the transaction, the Company also entered into several related agreements with Navistar for the supply of parts and production support services and the purchase of production equipment at the Shoals facility. The Company expects to invest up to $23 million to equip and make the facility operational.
Ed Whalen, President and CEO, said, “This transaction is an important part of our long-term growth strategy as we continue to expand our railcar product and service offerings outside of our traditional coal car market. While our existing facilities will continue to support our coal products, the Shoals facility will allow us to produce a broader variety of railcars in a cost effective and efficient manner. In addition, the facility layout, automated production equipment, proximity to key suppliers and new supply agreements will increase our flexibility and make us more competitive in the marketplace. We very much appreciate the support that we have received from the State of Alabama and local Shoals region communities as we make this facility operational.”
* * * * *The Company will host a conference call and live webcast on Wednesday, February 20, 2013 at 11:00 a.m. (Eastern Standard Time) to discuss the Company’s fourth quarter and full year 2012 financial results and the details of this announcement. To participate in the conference call, please dial (800) 230-1093, Confirmation Number 281877. Interested parties are asked to dial in approximately 10 to 15 minutes prior to the start time of the call. The live audio-only webcast can be accessed at: