WSJ: Caterpillar unit loses some railcar repair contracts

|About: Caterpillar Inc. (CAT)|By:, SA News Editor

Caterpillar's (NYSE:CAT) Progress Rail subsidiary is losing railcar repair contracts at some of the nation's busiest railroad terminals, including the ports of Long Beach and Los Angeles, WSJ reports.

Rival TTX is taking over railcar inspection and repair work at those ports on Terminal Island, Calif., as well as at rail hubs in San Bernardino, Calif., San Diego, Oakland, Stockton, Calif., and Glendale, Ariz.

The switch comes amid a federal grand jury investigation in California, disclosed last year, into whether Progress Rail charged railcar owners for repairs that weren't necessary and improperly disposed of discarded parts.

The loss of the contracts likely will hit Progress Rail's revenue, which totaled ~$1.2B when CAT acquired the company in 2006; Progress Rail's service business represents less than 4% of CAT's annual revenue.