FreightCar to take control of full manufacturing process at state-of-the-art Shoals facility
BARTON — FreightCar America, Inc. announced today that it has entered into an asset purchase agreement with Navistar, Inc. (“Navistar”) to acquire substantially all of Navistar’s operating assets associated with its railcar operations at the Shoals facility near Cherokee, Alabama. The transaction is expected to close on or around February 28, 2018 subject to the conditions set forth in the asset purchase agreement.
“This acquisition will allow us to now control our own destiny and benefit from the full economics of all future railcars built within the Shoals facility,” said Jim Meyer, President and Chief Executive Officer. “This is good news for our customers, our brand, our products, our people and the Shoals community. I want to thank Navistar for the prior relationship and the Retirement Systems of Alabama, the owners of the facility, for its support in this transaction.”
Meyer concluded, “We are making important investments in people, technology, equipment and infrastructure to enhance our state-of-the-art facility and world-class workforce, which will increase our operational efficiencies and create long-term value for our shareholders. The opportunities afforded to us upon completion of the acquisition, together with the organizational changes and manufacturing best practices that we have already begun to implement, will significantly strengthen our long-term competitive positioning, reduce our costs and allow us to be more responsive to customer needs.”
FreightCar has subleased a substantial portion of the Shoals facility since 2013. As a result of this transaction, FreightCar will become the sole tenant of the approximately 2.2 million square foot facility, which was purpose-built for the manufacture and repair of railcars. Additionally, FreightCar will be offering employment opportunities to the majority of Navistar’s approximately 200 employees on site. FreightCar will purchase select operating equipment and inventory at the Shoals facility, and receive a one-time up-front payment to cover future operating costs including rent payments at the facility. Net proceeds to FreightCar will be approximately $3 million at closing.
