AASHTO Journal, 31 October 2014
Trinity Industries, maker of the widely used ET-Plus highway guardrail end terminal, has suspended further shipments to construction projects as the company complies with a Federal Highway Administration request to put that product through new crash safety tests.
Trinity, in a statement issued Oct. 24, said it “will continue working with FHWA related to further testing and will stop shipment of the product until requested testing is completed.” By then, at least 14 states were already halting installations for now of ET-Plus systems in their own highway programs, and one – Virginia – reportedly was making plans to remove those already installed.
The FHWA request followed an Oct. 20 decision by a federal jury in a Dallas whistle-blower suit that Trinity was liable for fraud, for not making required disclosures to the agency of design changes it made to that guardrail product in 2002-05.
“In light of FHWA’s request, the right thing to do is to stop shipping the product until the additional testing has been completed,” Gregg Mitchell, president of the company’s Trinity Highway Products subsidiary, said in a press release.
Mitchell added: “We have confidence in the ET-Plus System as designed and crash-tested by Texas A&M Transportation Institute. It has met all tests previously requested by FHWA. We take the safety of the products we manufacture very seriously.”
Mitchell wrote state departments of transportation to directly tell them about the shipment halt. He also urged state DOTs to consider extending project completion timelines so contractors could make plans for alternative end terminals.
The jury also awarded the federal government damages of $175 million, which would triple under fraud law if the judgment is upheld through expected appeals. Along with attorney fees and other potential penalties, Fitch Ratings estimated Trinity’s eventual liquidity risk exposure could be up to $1 billion.
Trinity said its ET-Plus revenue for the first nine months of 2014 was about $33 million.
Overall, the company had net income last year of about $376 million on revenue of more than $4.36 billion across all its units. Trinity is also a major builder of rail cars for the North American freight rail market, operates a large leased rail car fleet, builds barges and makes steel towers for wind power.
Trinity Highway Products is part of its Construction Products Group, which is a large supplier to roadway and other construction projects but is a smaller part of Trinity than the other major divisions. That construction segment generated a 2013 operating profit of nearly $53 million on $525 million in sales of aggregates, trench shoring equipment, steel coatings and other crash cushions in addition to guardrail products.