Friday, August 12, 2011

95 Rail Cars Sold; Let's Compare

The rail car industry is experiencing a resurgence--a very mild resurgence as of now. Yesterday National Alabama announced it had sold 95 rail cars to a rail leasing company. These cars are essentially already built, but lack some specialized finishing touches. In other words, there won't be any new employees hired to complete this contract.

CEO John Stein heralded the sale as "a great first step for our company and a milestone."
Considering the lack of previous sales, almost anything would be a milestone for the Barton company, but what should we expect from this current thorn in the RSA's side compared to other rail car manufacturers?

Perhaps not much. It seems any upswing in rail car sales is related to an increase in coal sales to foreign buyers. The lighter the car, the more coal that can be transported. If coal sales should diminish, so would the need for new rail cars. Here's a projected comparison of National Alabama sales to two established companies in 2011.

Freight Car America (Chicago) -- 5,200
Trinity Industries (Dallas) -- 14,200
National Alabama (Barton) -- 200

To make matters worse for National Alabama, Trinity has signed an exclusive contract with its clients. According to the Wall Street Journal, the contracts will continue for at least five years.

So what, if anything, is National Alabama taking the lead in? We hear security has really put a dent in smoking in the men's rooms...