Railroad Equipment Manufacturing Industry Overview

Excerpt from Railroad Equipment Manufacturing Report

The US railroad equipment manufacturing industry includes about 175 companies with combined annual revenue of about $11 billion. Major railcar companies include Trinity Industries and Greenbrier; Electro-Motive Diesel (EMD) and GE are the only two major US locomotive manufacturers; Westinghouse Air Brake Technologies (Wabtec) is a leading replacement parts and repair services company. The railroad equipment ("rolling stock") industry is highly concentrated: the 20 largest companies account for about 95 percent of revenue.

Competitive Landscape

Demand for freight rolling stock is driven by fuel prices, as high gas prices shift freight transport from trucks to rail. Demand for passenger rail rolling stock is driven by public investment in regional rail transportation. The profitability of individual companies depends on securing long-term sales contracts with railroad companies and leasing agencies. Large companies have advantages in manufacturing economies of scale. Small companies can compete effectively through consulting services and custom-building locomotive and passenger railcars. The industry is capital-intensive: average annual revenue per worker is $450,000.

Products, Operations & Technology

Major products are new and rebuilt locomotives; new and rebuilt freight, passenger, street, and rapid-transit cars; and railroad parts and accessories. Other products include railroad vehicles, airbrakes, and rail maintenance equipment, such as ballast spreaders and rail layers.