ABC-NACO and Union Pacific Railroad Company Sign Long-Term Service Agreement.

Business Editors

DOWNERS GROVE, Ill.--(BUSINESS WIRE)--Oct. 11, 2000

The Track Products Division of ABC-NACO (ABCR) announced that they have entered into a long-term supply agreement to source and assemble pre-plated turnouts for the Union Pacific Railroad (UP). (A turnout allows trains to move from one track to another.) Under this agreement, ABC-NACO will source various components required to assemble turnouts, such as ties, fasteners and rail, and combine them with parts that ABC-NACO manufactures, to provide complete turnouts for field installation by Union Pacific employees. The Company will also maintain inventories of critical parts for emergency orders. UP will benefit from inventory cost reduction, lower shipping cost and "Just-in-Time" delivery of turnout material to its work sites.

This is the second long-term supply agreement between ABC-NACO and UP within the last year. The other agreement, which began in November, 1999, is a multi-year contract to provide new and reconditioned wheel sets to over one hundred UP railcar repair locations. This contract is managed over the Internet and allows UP personnel to check inventories, place orders and follow shipments through ABC-NACO's web site.

Joseph A. Seher, ABC-NACO's Chairman and Chief Executive Officer stated, "We are pleased that our service relationship with UP is growing and now includes both wheel and specialty track product services. In both cases, we are working closely with the UP to gain supply chain efficiencies and reduce infrastructure burden. The UP will realize substantial savings through lower inventories, quicker delivery and lower operating cost. Our strategy of enhancing traditional services with Internet access has rapidly increased the repair, service and maintenance portion of our overall business. We now believe that we can reach our long-term goal of 70% of our sales being maintenance and repair sooner than previously indicated."

ABC-NACO is one of the world's leading suppliers of technologically advanced products to the railroad and flow control industries through its three business groups: Rail Products, Rail Services and Systems, and Flow and Specialty Products. With four technology centers around the world, ABC-NACO holds pre-eminent market positions in the design, engineering, and manufacture of high-performance freight rail car, locomotive and passenger rail suspension and coupler systems, wheels and mounted wheel sets. The Company also supplies railroad and transit infrastructure products and services, technology-driven specialty track products, as well as highly engineered valve bodies and components for industrial flow control systems worldwide. It has 32 offices and facilities in the United States, Canada, Mexico, Scotland, Portugal, and China.

Safe Harbor Statement Under The Private Securities Litigation Reform Act of 1995: The statements contained in this release which are not historical facts, may be deemed to be forward-looking statements that are subject to change based on various factors which may be beyond the control of ABC-NACO Inc. Accordingly, actual results could differ materially from those expressed or implied in any such forward-looking statement. Factors that could affect actual results are described more fully in the Company's Annual Report on 10-K for the transition period ended December 31, 1999, under the caption "Cautionary Statement Concerning Forward Looking Statements," and other risks described from time to time in the Company's filings with the Securities and Exchange Commission. The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made.