Allied Holdings Renews General Motors Contract

DECATUR, Ga., Jan. 2, 2004 -- Allied Holdings, Inc. (AMEX:AHI) announced today that its subsidiary, Allied Automotive Group, Inc., has successfully renewed its vehicle delivery agreement with General Motors Corporation. The agreement with GM will extend the company's current contract from March 7, 2004 to March 7, 2006. Pursuant to the terms of the renewed agreement, Allied has retained all of the vehicle delivery business it currently services for GM in North America.

GM has agreed to award certain additional new business to Allied on or before March, 2004 and has accepted restrictions on moving existing business from Allied during the term of the agreement. In addition, Allied has agreed to discontinue all services provided by it related to Allied's GM yard operations which Allied management believes to be unprofitable. GM has further agreed to include Allied in any fuel surcharge program implemented by GM for any outbound vehicle transportation providers during the term of the new agreement.

In exchange for the various commitments made by GM, the contract renewal provides for rate reductions for vehicle deliveries that originate from GM operations served by Allied in the United States. Allied has agreed to sell to GM its property located at the Janesville, Wisconsin Assembly and Vehicle Distribution Center, which is used to perform transportation and other related services for GM, and GM will lease the property to Allied for nominal consideration. Allied will also make a cash payment to GM in the first quarter of 2004. Allied estimates that the impact to operating income in 2004 as a result of the terms and conditions of the renewal agreement will be a potential reduction of less than $3 million, which is less than one percent of the revenues from the GM business.

Commenting on the announcement, Hugh E. Sawyer, Allied's President and Chief Executive Officer, said, "General Motors is our largest customer, representing approximately $300 million in annual revenues. Our aspiration is not only to retain our existing portfolio of business but also to position our company for continued growth with this strategically important client. General Motors has been the single largest contributor of new business to Allied during the turnaround, awarding Allied nationwide distribution of the Chevrolet Corvette and the Cadillac XLR, delivery of the Hummer H2 from the manufacturing plant and significant additional vehicle delivery business." Mr. Sawyer added, "The completion of this new agreement two months before the expiration of our existing contract eliminates a risk to our ongoing turnaround. Completion of the GM contract renewal provides Allied with greater stability in our business in 2004 and will permit the management team to focus its time, energy and talent on improving its operations and delivering superior customer service to all of our customers in North America."