Ryder Announces Strategic Initiatives to Increase Competitiveness and Drive Long-Term Profitable Growth

MIAMI – Ryder System, Inc. announced several strategic and tactical initiatives to address current global economic conditions and drive long-term profitable growth. The initiatives include discontinuing current operations in several international markets and eliminating positions primarily in the U.S., to align costs with current and anticipated levels of business.

These steps will allow the Company to focus on enhancing the competitiveness and growth of its service offerings in the U.S., Canada, Mexico, the U.K., and Asia. These actions align resources in support of the company’s highest potential markets and customers, and improve the cost structure of the organization going forward.

“The current economic conditions present a significant challenge for many companies across nearly every industry,” said Ryder Chairman & Chief Executive Officer Greg Swienton. “Based on the business-model improvements we have implemented since the last economic downturn, and with the benefit of these current additional strategic actions, we are positioned to compete effectively in the present market environment. We are committed to continuing to advance our competitive position in the highest potential markets. Ryder has a strong balance sheet, good credit ratings, positive cash flow, and access to growth capital. We further expect that these initiatives will not only help us weather a difficult environment, but also enable us to emerge from this current downturn as a stronger organization. Although the decisions we have made have been difficult, especially in terms of the affected employees and customers, we believe these are necessary and responsible actions to help ensure a strong future for Ryder, its employees, customers, and investors.”

Discontinue Current Supply Chain Operations and Contracts in Brazil, Argentina, Chile, and Europe Ryder will discontinue current Supply Chain Solutions (SCS) operations during 2009 in certain international markets and transition out of specific SCS customer contracts in order to focus the organization and resources on the industries, accounts, and geographical regions that present the greatest opportunities for competitive advantage and long-term sustainable profitable growth. This will include discontinuing current operations in the markets of Brazil, Argentina, and Chile, and transitioning out of SCS customer contracts in Europe. These operations and contracts accounted for gross revenue of approximately $200 million and operating revenue of approximately $120 million, or roughly 3 percent of consolidated revenue in 2007. Approximately 45 percent of this operating revenue was derived from the automotive sector. All of these actions will involve individualized customer transition schedules that will be implemented on a contract-by-contract basis to provide a smooth transition of Ryder’s role. The majority of these actions are expected to be completed and benefit earnings by the latter part of 2009.

The number of Ryder employees supporting discontinued operations or contracts is approximately 2,400 positions. Due to the fact that the affected contracts involve important services and functions which actively support customers' operations, the transition process is expected to result in opportunities for separated Ryder employees to continue serving the same customer under Ryder’s eventual successor in each customer relationship.

Ryder anticipates that discontinuing these operations will result in a pre-tax restructuring charge of approximately $38 million to $45 million (approximately $35 million to $42 million, after-tax) in the fourth quarter of 2008, including severance and other termination benefits, asset impairment costs, and contract termination fees.

Increase Emphasis on the U.S., Canada, Mexico, the U.K., and Asia Markets 

The actions described above will enable Ryder to focus the organization and resources to expand its service offerings, further diversify its mix of industries served, and continue its pursuit of “tuck-in” and strategic acquisitions that create synergies and/or expand capabilities. In the U.S., Canada, and Mexico, emphasis will be placed on elevating Ryder's strong market position as a leading provider of transportation and logistics solutions. In the U.K., Ryder will focus on delivering profitable growth in the Fleet Management Solutions and Dedicated Contract Carriage product lines. Ryder will also continue to develop its Asia capabilities including strengthening its role as a facilitator of commerce and production between companies and resources in the North American and Asia regions.

Implement Temporary Automotive Production Related Layoffs, Primarily in U.S.

Due to the severity of recently announced downturns in automotive production in North America, Ryder will be issuing temporary layoffs, primarily in the U.S., to approximately 1,300 drivers and warehouse workers, and approximately 125 salaried employees as a result of reduced service levels required to support greatly reduced production activity related to certain automotive customer accounts. We are currently assessing the 2009 impact of these developments, further details of which will be included in the Company's 2009 business plan outlook discussion on February 4.