Allied Holdings Successfully Settles Ryder Litigation

DECATUR, Ga., Sept. 29 -- Allied Holdings, Inc. (AMEX:AHI) today announced that it has settled all outstanding litigation with Ryder System, Inc. The litigation arose in connection with the acquisition by the Company of Ryder Automotive Carrier Services, Inc. and RC Management Corp. from Ryder System, Inc. in September 1997, and consists of three actions involving Allied, Ryder, and unrelated third parties.

Under terms of the settlement agreement, Ryder System has paid the Company approximately $1.4 million, and Ryder's insurance carrier has paid the Company approximately $1.6 million. The payment from Ryder represents the settlement of various claims and adjustments to the consideration paid in 1997 upon consummation of the acquisition. The payment from Ryder's insurance carrier represents a reimbursement for amounts paid by the Company in excess of the self-insured retention for worker's compensation and automobile liability claims assumed in the acquisition of Ryder's Automotive Carrier Group. The Company had previously recorded a $1.1 million receivable from Ryder System and its insurance carrier. Therefore, the Company will record a $1.9 million pre-tax gain on the litigation settlement in its third quarter 2003 results. The Company and Ryder System have agreed to dismiss all litigation each party had brought against the other as part of the settlement, which will result in the complete dismissal of all claims between Allied and Ryder. Ryder has agreed to indemnify Allied for all ongoing costs -- including legal fees and any potential judgment against Allied -- arising out of all remaining actions in which Allied is a party. The settlement will relieve Allied of exposure to future legal fees or any potential judgment against the Company.

As part of the settlement agreement, the Company has issued a letter of credit for approximately $3.5 million in favor of Ryder System and has agreed to increase the letter of credit by $1 million each quarter starting in the fourth quarter 2003 through the third quarter of 2005. The letter of credit may only be drawn by Ryder System if the Company fails to pay workers compensation and liability claims assumed by the Company in the Ryder Automotive Carrier Group acquisition. The Company has provided the letter of credit in favor of Ryder System because Ryder has issued a letter of credit to its insurance carrier relating to the worker's compensation and liability claims assumed by the Company. On September 30, 2005, and periodically thereafter, an actuarial valuation will be made to determine the remaining outstanding amount of workers compensation and liability claims assumed by Allied, and the letter of credit issued by the Company in favor of Ryder System will be adjusted accordingly.

Commenting on the announcement, Hugh E. Sawyer, Allied President and Chief Executive Officer, said, "We are very pleased to have resolved this longstanding litigation risk at a financial gain to Allied that allows us to repay $3 million of borrowings under our revolving credit facility."

Statements in this press release that are not strictly historical are "forward looking" statements. Such statements include, without limitations, any statements containing the words "believe," "anticipate," "estimate," "expect," "intend," "plan," "seek," and similar expressions. Investors are cautioned that such statements are subject to certain risks and uncertainties that could cause actual results to differ materially. Without limitation, these risks and uncertainties include economic recessions or extended or more severe downturns in new vehicle production or sales, the highly competitive nature of the automotive distribution industry, the ability of the Company to comply with the terms of its current debt agreements, the ability of the Company to obtain financing in the future and the Company's highly leveraged financial position. Investors are urged to carefully review and consider the various disclosures made by the Company in this press release and in the Company's reports filed with the Securities and Exchange Commission.

About Allied Holdings

Allied Holdings, Inc. is the parent company of several subsidiaries engaged in providing logistics, distribution and transportation services to the automotive industry. The services of Allied's subsidiaries span the entire finished vehicle distribution continuum, and include logistics, car- hauling, intramodal transport, inspection, accessorization, and dealer prep. Allied, through its subsidiaries, is the largest company in North America specializing in the delivery of new and used vehicles.

NOTE: For additional information about Allied, please visit our website at www.alliedholdings.com .