ARI Forms Joint Venture Targeting Passenger Train Equipment

Freight car manufacturer American Railcar Industries, Inc. (ARI) and US Railcar, LLC (USR) have formed a joint venture to design and build passenger railcars.

The new venture, US Railcar Company, LLC, will focus on diesel multiple units (DMUs), which are self-propelled passenger railcars in both single- and bi-level configurations.

"ARI is excited to participate in this opportunity to join US Railcar and bring ARI's long and proud 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."

ARI, based in St. Charles, Mo., is a leading builder of hopper cars and rail tank cars and related products and services. Like other freight car builders, it is looking to diversify its operations as the freight car manufacturing market continues to be depressed.

One of US Railcar Company's goals is to re-establish American-owned passenger train production in the United States, according to Barry H. Fromm, a director of the new joint venture. As chairman and CEO of Value Recovery Group, Inc.,  Fromm led a group that purchased USR assets from the former Colorado Railcar Manufacturing Co., which ceased operations in late 2008.

US Railcar Company will be led by President & CEO Michael P. Pracht, a rail industry veteran. "These are extraordinary times with growth opportunities for passenger rail in the U.S.," said 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."

ARI, which is majority owned by Icahn Enterprises L.P., will provide US Railcar Company with experience in the production of railcars and ARI representatives will make up half of the joint venture's board. Representatives of VRG will comprise the other half of the board.

The joint venture plans to produce railcars at ARI plants in Arkansas to serve transit, commuter and regional rail service needs.