Railamerica (NYSE:RRA)
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From May 2019 to May 2024
Implementing another step in its previously announced
five-year strategic plan to improve efficiency and enhance shareholder
value, RailAmerica, Inc. (NYSE:RRA) today announced the restructuring
of its organization into three business units from its current five
regions and two corridors.
The three business units - RailAmerica Operations East,
RailAmerica Operations Central, and RailAmerica Operations West - will
each be headed by a newly appointed president from within the ranks of
management: RailAmerica Operations East by Jan Polley, RailAmerica
Operations Central by Scott Hulstrom, and RailAmerica Operations West
by Ray Stephens.
This reorganization will result in the immediate elimination of 20
positions, virtually all from upper and middle management. About half
the positions come from the corporate office; the other half are from
RailAmerica field locations. Prior to this, the company had about 130
managers at the levels affected by the reorganization. The
restructuring of the organization will result in a pre-tax charge of
approximately $1.8 million in the second quarter.
"RailAmerica has achieved its growth during the last 20 years by
acquiring other railroads, each with its own processes, procedures,
and structures," said Charles Swinburn, Chief Executive Officer of
RailAmerica. This has resulted in redundancies and inefficiencies in
our organization.
"This reorganization - a key piece of our Process Improvement
Project - will create a leaner, more profitable, and more competitive
RailAmerica ... a company that is even more responsive to our
customers' needs," Swinburn said.
Under the restructuring plan, the company will move certain of its
corporate functions to a shared services model that will provide more
effective and efficient support across the three new business units.
"In addition to making us a leaner company with fewer layers of
management, this reorganization will give our managers in the field
the resources and responsibility to make market- and customer-based
business decisions without having to involve higher levels of
management," Swinburn said.
As the next phase in its Process Improvement Project, RailAmerica
will put in place new business processes through the remainder of 2006
to support the new structure.
The Process Improvement Project, which the company will continue
to implement during the remainder 2006, is projected to result in
operating expense and capital savings of $10-$15 million annually,
beginning in 2007.
RailAmerica, Inc. is a leading short line and regional rail
service provider with 42 railroads operating approximately 7,800 track
miles in the United States and Canada. The company is a member of the
Russell 2000(R) Index. http://www.railamerica.com.
Disclaimer Regarding Forward-Looking Statements: This press
release contains forward-looking statements regarding future events
that involve risks and uncertainties that could cause actual results
to differ materially. Forward-looking statements speak only as of the
date the statement was made. The Company assumes no obligation to
update forward-looking information to reflect actual results, changes
in assumptions or changes in other factors affecting forward-looking
information. If the Company does update any forward-looking statement,
no inference should be drawn that the Company will make additional
updates with respect to that statement or any other forward-looking
statements. We refer you to the documents that RailAmerica files from
time to time with the Securities and Exchange Commission, such as the
Form 10-K, Form 10-Q and Form 8-K, which contain additional important
factors that could cause its actual results to differ from its current
expectations and from the forward-looking statements contained in this
press release.