Allied Holdings, Inc. Subsidiaries Obtain Interim Relief to Modify Collective Bargaining Agreement

DECATUR, Ga., May 1, 2006 -- Allied Holdings, Inc. (OTC Pink Sheets: AHIZQ) announced today that certain of its operating subsidiaries have received interim relief temporarily modifying terms of their collective bargaining agreement with the International Brotherhood of Teamsters in the United States. Today, the U.S. Bankruptcy Court for the Northern District of Georgia granted Allied's motion for interim relief, allowing the Company's relevant subsidiaries to reduce wages for their Teamster-represented employees in the United States by 10% for the months of May and June, 2006. The court has also ordered that Allied may forego, for the same period, wage and cost-of-living increases previously scheduled to go into effect on June 1, 2006. The order will affect approximately 3700 Teamster employees in the United States.

With the approval of the motion, Allied will also implement non-paid furloughs for its non-bargaining, salaried employees in North America. Employees with annual salaries of less than $80,000 will be required to accept a five-day, non-paid furlough in the month of June 2006 and those with annual salaries of $80,000 or more will be required to accept ten days of unpaid furlough by June 2006.

The interim relief ordered will reduce the Company's Teamster-related labor costs by approximately $2 million per month. In addition, the non-paid furloughs will reduce the Company's non-union labor costs by approximately $200,000 in May and $800,000 in June.

"The court agreed that the relief was necessary to prevent irreparable damage to the company, preserve the jobs of Allied's employees, and, ultimately, avoid the threat of liquidation," said Hugh E. Sawyer, President and Chief Executive Officer. Mr. Sawyer added, "While I regret that this step was necessary, I have been clear throughout this process that concessions from our Teamster-represented employees in the United States will be necessary for Allied to emerge from bankruptcy. This ruling supports our continuing need to reduce costs over the next few months while we attempt to obtain permanent modifications to our current collective bargaining agreement covering Teamster-represented employees in the United States. These permanent modifications will be necessary for Allied to emerge from bankruptcy."

Negotiations between certain of the Company's indirect subsidiaries and the International Brotherhood of Teamsters for long-term modifications to the current collective bargaining agreement covering Teamster-represented employees in the United States are ongoing. In addition to the interim relief, the Company believes that the negotiations on permanent modifications to the collective bargaining agreement must be completed on or before June 30, 2006.

Allied previously announced that it anticipated that it would not have sufficient availability to meet its working capital needs as early as May 2006. The Company also previously announced an amendment to its debtor-in- possession credit facility providing for a $5 million protective overadvance. The Company believes that the overadvance, together with the interim relief granted by the court, will provide it with sufficient funds to meet its working capital needs through July. However, the Company will operate at various times between now and July with limited availability and can give no assurance that it will have sufficient funds to meet working capital needs during this period.

About Allied Holdings

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

Statements in this press release that are not strictly historical are "forward looking" statements. Such statements include, without limitations, statements regarding the Company's working capital needs, the necessity of permanent modifications to the Company's collective bargaining agreement with the International Brotherhood of Teamsters, and any statements containing the words "believe," "anticipate," "estimate," "expect," "intend," "plan," "seek," and similar expressions. These forward-looking statements involve a number of risks and uncertainties including risks and uncertainties relating to the following: the ability of the Company to eliminate its projected liquidity shortfall; the impact of the Chapter 11 proceedings and the related circumstances which could materially affect the amounts of assets and liabilities included in the consolidated financial statements or the Company's market share; risks associated with Allied's ability to obtain approval of and/or to implement its plan of reorganization; risks associated with Allied's ability to obtain exit financing to replace the Debtor-In-Possession Credit Facility; the ability of the Company to renegotiate its collective bargaining agreement with the International Brotherhood of Teamsters; the ability to comply with the terms of our current debt agreements and customer contracts; economic recessions or downturns in new vehicle production or sales; war in the Middle East; increases in the cost and availability of fuel; the highly competitive nature of the automotive distribution industry; dependence on the automotive industry and ongoing initiatives of customers to reduce costs; loss or reduction of revenues generated by the Company's major customers or the loss of any such customers; the variability of OEM production and seasonality of the automotive distribution industry; Allied's highly leveraged financial position; Allied's ability to obtain financing in the future; Allied's ability to fund future capital requirements; increased costs, capital expenditure requirements and other consequences of the Company's aging fleet of Rigs as well as Rig purchasing cycles; labor disputes involving Allied or its significant customers; dependence on key personnel; increased frequency and severity of employee related accidents and workers' compensation claims; availability of appropriate insurance coverages in all categories; changes in the regulatory requirements which are applicable to Allied's business; changes in vehicle sizes, configurations and weights which may adversely impact vehicle deliveries per load; risks associated with doing business in foreign countries; the availability of qualified drivers; dependence on legacy information systems; dependence on IBM for mainframe and system support; increased frequency and severity of cargo claims; increased frequency and severity of traffic accidents; excess manufacturer production capacity which could lead OEMs to close manufacturing facilities; and efforts to improve network efficiency.

Many of these factors could cause Allied's actual results to differ materially from those suggested by the forward-looking statements and are beyond the Company's ability to control or predict. Allied cautions readers not to place undue reliance on the forward-looking statements and Allied also disclaims any obligation to update or review forward-looking statements, except as may be required by law.

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