Railroad operator CSX Corp. has hired New York investment banker Goldman, Sachs & Co. to help determine what to do with the money-losing luxury resort.
The aim is to make the White Sulphur Springs landmark a viable business entity, Jacksonville, Fla.-based CSX said. Typically, hiring an investment banking firm signals a potential sale, but CSX spokesman Gary Sease would say only that the company is considering all options for the resort.
CSX has not set a timeline for Goldman to complete its work, said Lynn Swann, a spokeswoman for The Greenbrier. “They will continue to work with Goldman Sachs over the next several weeks,” she said.
CSX Chief Executive Michael Ward blamed the struggling economy for the resort’s woes in a statement.
“The Greenbrier is at a crossroads,” he said. “The market for luxury hospitality services is shrinking rapidly in this economy.”
The decision to hire Goldman comes amid troubled times for the resort, which has entertained kings and presidents and housed a once-secret bomb shelter intended for Congress, and for CSX.
The Greenbrier lost $35 million last year as it struggled with cancellations and a labor dispute that’s dragged on for nearly a year.
Last month, the resort extended a no-strike, no-lockout promise through January 2010 unless new labor agreements are ratified in the interim. A master labor agreement and nine additional deals with Greenbrier workers expired Jan. 31, 2008. A union representative did not immediately return a call Friday.
The Greenbrier is continuing to study one potential solution for the labor problem: casino gambling. The resort is working with a consulting firm hired after Greenbrier County voters approved a measure to allow gambling at the resort in November.
The Greenbrier also has struggled to regain the luster it lost when the Mobil Travel Guide reduced it to a four-star resort in 2000. The guide didn’t restore the fifth star in 2008, despite a $50 million renovation that included adding wireless Internet, fresh guest room decor and flat-screen TVs to keep the resort attractive to a new generation of well-heeled traveler.
CSX, meanwhile, is bracing for a continued decline in shipping volume in 2009, though executives predicted in October that higher prices and productivity would offset the shortfall. Like other railroads, CSX has been stung by the declining automotive and housing markets and says those factors and weakness in the industrial sector will hurt shipments this year.
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