June 16, 2009 (FinancialWire) — Genesee & Wyoming Inc. (NYSE: GWR) said that its Huron Central Railway Inc. subsidiary plans to discontinue operations. The closure will ultimately eliminate 45 jobs at the railroad.

According to Genesee & Wyoming, the downturn in the economy has caused the Huron Central’s traffic to “decline substantially” over the last 12 months, to the point that the railroad is not economically viable to operate for the long term.

GWI said it expects to record charges in the second quarter of up to around $5.3 million after tax, or $0.15 per share, reflecting the non-cash write-down of non-current assets of around $7.1 million and cash costs associated with the cessation of HCRY operations ranging from $0.4 million to $1.9 million.

The company said it expects that the charges will be partially offset by cash tax benefits of around $3.7 million.

In the year ended December 31, 2008, Huron Central Railway handled around 16,000 carloads, generated revenues of $7.4 million and incurred a $2.1 million operating loss, according to Genesee & Wyoming. The unit’s performance reduced GWI’s diluted earnings per share by around $0.04.

HCRY has operated the 173-mile railroad from Sudbury to Sault Ste. Marie, Ontario, under a lease agreement with Canadian Pacific Railway since 1997.

The railroad will cease operations between McKerrow and Sault Ste. Marie on August 15. It will continue operation of the eastern segment of the railroad from Sudbury to McKerrow and Espanola until October 31.

Greenwich, Connecticut-based Genesee & Wyoming owns and operates short line and regional freight railroads in the United States, Canada, Australia and the Netherlands and owns a minority interest in a railroad in Bolivia.

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