April 16, 2015 / 10:19 PM / in 3 years

Greenbrier may stop building railcars deemed too weak -CEO

HOCKLEY, Texas, April 16 (Reuters) - Railcar manufacturer Greenbrier Cos may stop building the latest industry model of crude tank cars in favor of the company’s stronger design if U.S. regulators aren’t forceful enough in imposing new standards, Chief Executive William Furman said on Thursday.

He said his industry generally doesn’t just stop building federally approved cars if customers want them, “but we might do it,” he said at one of Greenbrier’s joint-venture tank car repair and retrofit shops in Hockley near Houston.

Furman said whether the company seriously considers that move depends on whether the U.S. Department of Transportation soon issues a tougher standard than the latest industry design. The department has been under pressure to act after a spate of fiery derailments in North America that started in mid-2013.

If the department approves a car less fortified than Greenbrier’s design, the company could stick with its own because a weaker car may be less safe “and we don’t want our name on it,” he said.

Oil moved via rail grew from nearly nothing a few years ago to more than 1 million barrels per day in the second half of 2014 as North American output boomed without enough pipelines to transport it.

Last year Greenbrier started marketing its “tank car of the future,” with thicker steel, at 9/16 inches, than the latest 7/16-inch design adopted by the industry in 2011. It matches one of three tank-car standard options under DOT consideration.

The DOT’s other options are the 7/16-inch October 2011 model and the 9/16-inch design plus electronically controlled brakes.

Shippers now largely use the October 2011 design, but those cars have been involved in some of the accidents.

If DOT adopts either 9/16-inch option, shippers would have to buy or retrofit thousands of 7/16-inch models. Furman said it can be done in three to five years by 100 U.S. shops certified for tank car service like the one in Hockley.

Others, including the Railway Supply Institute, the railcar industry’s trade group, say more time is needed to avoid disrupting crude shipments.

National Transportation Safety Board Chairman Christopher Hart, who visited the Hockley shop on Thursday, said he supports an aggressive retrofit and replacement schedule.

“None of our events have been in a town,” he said of the fiery U.S. derailments. “We don’t want to wait until that happens.” (Reporting By Kristen Hays; Editing by Terry Wade)

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