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Allied Holdings Subsidiaries Propose Modifications to Collective Bargaining Agreement

DECATUR, Ga., March 9 -- Allied Holdings, Inc. (Pink Sheets: AHIZQ.PK) announced today that certain of its subsidiaries, including Allied Systems, Ltd., have made a proposal to the International Brotherhood of Teamsters to modify the current collective bargaining agreement between the parties applicable to employees in the United States. Allied has informed the Teamsters that its proposal is necessary in order to allow Allied to emerge from bankruptcy, reinvest in its aging fleet of rigs, and protect the jobs of its employees, including approximately 3,500 employees in the United States represented by the Teamsters.

Allied's proposal would reduce the current total compensation in the form of wages, health and welfare premiums, and pension contributions paid to U.S. Teamster employees by approximately 14.5% (only 2% of which would be in the form of wage decreases). The proposal would also eliminate future increases to wages, health and welfare, and pension contributions as contemplated by the current collective bargaining agreement.

Allied believes that the proposed changes are necessary and will eventually provide the Company with about $65 million in annual cost reductions. About $21 million of annual cost reductions is expected to come from the elimination of future increases in wages and benefits contemplated by the current collective bargaining agreement, and the remaining $44 million is expected to come from reductions to current wages and payments made for health, welfare and pension benefits.

The annual cost savings that the Company believes it would obtain as a result of this proposal assumes the Company emerges from bankruptcy with substantially the same number of current terminals, rigs and Teamster employees. The actual amount of the cost savings will vary depending on these and other factors. Further, the Company also proposed specific operational changes to the collective bargaining agreement which are needed in order to slow the Company's market share erosion.

When Allied filed for bankruptcy on July 31, 2005, the Company disclosed that in order to emerge from bankruptcy, it had to increase prices with its customers, reduce the costs associated with the collective bargaining agreement with the U.S. Teamsters, reinvest in its aging fleet of rigs and reduce its debt. Since the Company filed for bankruptcy, Allied has reached agreements regarding new contracts with many of its customers in North America which will significantly increase its overall pricing. The Company also believes that it will significantly reduce its debt through the reorganization process.

The Company has informed the Teamsters that it believes it has maximized the self-help opportunities available to the Company in its efforts to emerge from bankruptcy and now must obtain modifications to the collective bargaining agreement. The Company has also informed the Teamsters that without these modifications, the Company may not be able to emerge from bankruptcy.

Hugh Sawyer, President and Chief Executive Officer of Allied, said, "The burden of saving Allied and allowing our Company to emerge from bankruptcy must be shared by all of our constituencies. Allied has obtained substantial increases in pricing from its customers since it filed for bankruptcy and has taken millions of dollars of cost out of its business in recent years, primarily through sacrifices made by the Company's non-bargaining employees through reduced wages and benefits. However, Allied's costs relating to wages, health and welfare premiums, and pension contributions for our employees subject to this collective bargaining agreement in the United States have increased significantly during the same time period. In fact, the increases in wages and benefits paid by the Company for employees covered by the collective bargaining agreement since 2001 are almost equal to the reduction in these costs that we now need to obtain in order to emerge from bankruptcy."

The Company has informed the Teamsters that it is prepared to meet and bargain with the Teamsters in an effort to reach agreement regarding modifications to the current collective bargaining agreement.

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, such as the expected cost savings resulting from Allied's proposal to the Teamsters, the effects of price increases paid by its customers and the ability of the Company to reduce its debt through the reorganization are subject to certain risks and uncertainties that could cause actual results to differ materially. Without limitation, these risks and uncertainties include the actual cost reductions which result from modifications to the collective bargaining agreement as proposed by the Company, 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 and customer contracts, the ability of the Company to obtain financing in the future, the Company's highly leveraged financial position, and the ability of the Company to successfully complete a plan of reorganization and emerge from bankruptcy. 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.

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