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May 31, 2010

Gunderson cuts barge production rates

Gunderson LLC, a subsidiary of The Greenbrier Companies (NYSE:GBX), has implemented a 4-day work week at its marine barge operation, to reduce production rates. The move affects close to 400 employees dedicated to barge manufacturing; the work schedule of the nearly 300 workers dedicated to Gunderson's rail operations is unaffected by the decision.

"As a result of recent uncertainties in the marine market and the City of Portland's recent adoption of the River Plan, which is scheduled to become effective January 1, 2011, it is prudent for us to adjust production until there is more clarity," said William A. Furman, president and chief executive officer of Greenbrier. "Increased market uncertainty due in part to the oil spill in the Gulf of Mexico and delays in oil drilling projects have affected our customers, causing them to become more cautious in their near term outlook and to delay decisions. In addition, the recently adopted River Plan will increase regulation, bureaucracy, and costs of operating the Gunderson facility. We, along with many other industrial companies located on the Portland waterfront, are appealing the River Plan with the State Land Use Board of Appeals. In the meantime, however, the plan creates uncertainty and caution on our part, contributing to our decision."

Furman concluded, "Over the next several months, we hope to gain greater clarity in our marine operations. At such time, we will reevaluate our production manning levels to determine whether to continue production at current rates, resume at higher rates, or invoke additional adjustments including layoffs."


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