The Greenbrier Companies, Inc. (NYSE:GBX) Q2 2020 Earnings Conference Call - Final Transcript
Apr 07, 2020 • 11:00 am ET
William A. Furman
presents a range of unknown and unknowable challenges.
We're safely operating, and I emphasize safely operating, all our manufacturing and essential service sites, including those sites that manage over a quarter of industry railcar in the United States and North America. Greenbrier's operations constitute essential infrastructure and essential businesses as defined by the US Department of Homeland Security and other US and international agencies, including all stay-at-home orders issued in the jurisdictions where we operate at home and abroad.
Greenbrier supports operations vital to the national transportation system to Department of Defense and other federal agencies. We perform our functions under the statutory and regulatory authority of the Department of Transportation, Surface Transportation Board, the Federal Railroad Administration, and under the Jones Act in our marine operations. Accordingly, Greenbrier will help maintain the delivery of vital goods including food, medical supplies and fuel to communities in the United States, and then all the nations that we supply around the world. We will keep our nations and those nations smoothly functioning in the railroad system.
Along with the welfare of our employees, we are determined to protect the economic wellbeing of the enterprise during unprecedented market and economic conditions. As discussed in our earnings release today, we are laser-focused on liquidity. Our goal is to produce $1 billion in available reliable liquidity within the remaining five months of our fiscal year, ending in August of 2020. Before the onset of the pandemic, we had already begun to reduce the size of our manufacturing footprint due to anticipated lower levels of railcar demand and reduced aftermarket activity.
Adjustments to production and staffing levels that began in September of last year, continued into the second and third quarter as we idled excess capacity in North American manufacturing facilities, largely in Mexico as well as at Greenbrier Rail Services locations. Since we began this initiative, we have adjusted global operations through workforce reductions equal to approximately 20% of Greenbrier's total global workforce. These reductions now exceed 3,500 workers.
Yesterday, we took steps which would add another 200 workers over time. Our colleagues who left this fiscal year are people who each made important contributions to our success; many have spent their entire careers in this business. They are leaving us through no fault of their own. Each affected employee is a person with a name and a family. This is a fact we never forget. We recognize that this is a period of shared sacrifice. As a result, I have taken a voluntary immediate reduction in my salary of $250,000; and for our Board of Directors, each has voluntarily reduced their cash compensation.
We've frozen pay increases for members of management. Moreover, cash and earnings will automatically flow from curtailed bonus payments if we do not meet targeted performance metrics and along with a discretionary reduction that I work the compensation committee of the Board of Directors can request. All that remains to be seen. But it is an automatic relief felt for difficult