Wabtec Corporation Q4 2008 Earnings Call Transcript

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2009-02-24 12:20:30.0

Tags: Car, Call Transcript, Earnings, Basis, Wabtec, Strategic Planning, Strategy, Management, Seeking Alpha, Wabtec Corp.

Question-and-Answer Session

Operator

(Operator Instructions). Our first question comes from Jim Lucas with Janney Montgomery Scott. Please go ahead.

Jim Lucas - Janney Montgomery Scott

Thanks. Good morning, guys.

Al Neupaver

Good morning, Jim.

Jim Lucas - Janney Montgomery Scott

Al, could you give us an update with the inclusion of Standard, of what Wabtec's content is for railcar and for locomotive? I'm trying to get anecdotally how much content you gain because some data will start building again, but I want to gain a better understanding there.

Al Neupaver

Okay. Right now, when you looked at on share adjusted number, we have about 5,000. That's just the current Wabtec products without Standard Car Truck, about 5000 per car. Adding Standard Car Truck in on share basis, you would multiple that, probably you would have another $5000 per railcar. On a share basis, their share is lower than ours. I would guess that the number would be probably in the $4000 to $5000 per car, when you do a share adjusted basis.

Jim Lucas - Janney Montgomery Scott

Okay. And on the locomotive?

Al Neupaver

On the locomotive it varies. If we got all the things that we make in a locomotive, it's a very high number, it's a 150,000 and their locomotive business is not that strong. It may add another $4,000, $5,000 to that.

Jim Lucas - Janney Montgomery Scott

Okay. And as it was helpful walking through the assumptions and your guidance. And one of the things about Wabtec is the cost and cash focus that is deeply ingrained in the company. What variables are you looking at internally that you would have to ratchet up, another round of cost cutting given the uncertainty that lingers out there today?

Al Neupaver

Yes. Wabtec is in a strange situation. When you got basically half of your business that is maintained and then the other half, obviously the market conditions are pretty challenging on the freight side. So division-by-division, what we continue to do is try to continue to forecast the changes, where normally, in normal conditions you do it once a month. We probably had three or four iterations, especially in the freight area over just the last five or six weeks.

And if we see any change from the assumptions or an issue that's out there, we react with some type of restructuring plan or recovery plan in order to make up for it. We are trying to find other revenues, but we are not afraid to take the actions we need to, to really protect the business. This cost reduction program is something that we've really being doing over the last three years.

 

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