Federal regulators faulted Genesee & Wyoming Inc., after engineers allowed a severely overloaded train onto a trestle in western Alabama last year, with the resulting derailment sending NASA space-shuttle rocket booster parts tumbling into a creek bed.
Six people were injured in the accident, some seriously, and have filed lawsuits against Genesee & Wyoming and subsidiary M&B Railroad L.L.C., also known as Meridian & Bigbee, which owned and operated the track.
According to the Federal Railroad Administration, wooden-trestle supports rotated under the strain of the train, causing the locomotive and a coach car to topple 10 feet into a creek bed and injuring the train”™s engineer and five Amtrak employees under contract to Minneapolis-based Alliant Techsystems (ATK).
Four flatbed cars carrying rocket booster segments also derailed, with one of them likewise falling off the low trestle and into the ravine in Myrtlewood, Ala. The rocket boosters were on a two-week journey from Utah, where they are made, to Cape Canaveral, Fla.
The mishap resulted in $3.3 million in damage; in addition, the company hauled 7,000 fewer carloads of freight in the third quarter due to the ongoing impact of the wreck, according to Timothy Gallagher, chief financial officer of Genesee & Wyoming, who addressed the topic in a conference call with investment analysts.
Based in Greenwich, Genesee & Wyoming runs short-line railroads in the United States, Canada, Australia and the Netherlands. The company had a $21 million profit in the third quarter and total revenue of $159 million, up 21 percent from a year earlier.
During the quarter, Genesee & Wyoming reached an agreement to acquire Ohio Central Railroad System, which has 170 employees, owns nearly 450 miles of track and operates more than 60 locomotives. Genesee and Wyoming is paying $219 million and up to $25 million more depending on business contingencies, and expects Ohio Central to add $70 million in revenue next year.
Genesee & Wyoming also acquired the smaller Georgia Southwestern Railroad for $21 million, including the assumption of debt.
While Genesee & Wyoming expects a lackluster harvest to impact Australian revenue this fall, the company”™s chief executive officer sees a stateside agriculture industry boosting sales down the road.
“In Georgia our largest business concentration is in the peanut industry which typically benefits from recession since it is a relatively cheap source of protein,” CEO John Hellman told analysts.
