New railroad plans start-up in West Michigan by Chris Wheelock Monday February 02, 2009, 11:58 AM Photo by Chris Wheelock Grand Elk Railroad plans to invest $9 million to take over a rail line between Grand Rapids and Elkhart, Ind. Amid the spiral of layoffs and downsizing in Michigan, a Kansas transportation company is moving ahead with plans to invest nearly $9 million to take over and operate a rail line between Grand Rapids and Elkhart, Ind., currently operated by Norfolk Southern Railway. The Grand Elk Railroad, a subsidiary of Watco Transportation Services, was given the green light Jan. 30 by the Surface Transportation Board -- the federal agency with regulatory oversight of the nation's railroads. Despite the pledge of 58 full-time jobs and the prospect of a multimillion dollar infusion into West Michigan's economy, there is opposition to the plan. "I'm disappointed by the STB decision," state Sen. Ray Basham, D-Taylor, said. "I still have the same concerns I had when I filed my comments, and we'll just have to see where this goes." Basham, vice chairman of the Senate Transportation Committee, is one of five petitioners to the STB seeking to block the transaction, citing public safety, labor and competitive concerns. The STB was not persuaded. "This is excellent news," said Rick Webb, CEO of Watco. "Our team is excited to roll up our sleeves and get to work in western Michigan." Grand Elk Railroad General Manager Rodney Gordon said more than 2,000 people have applied so far for the 57 other positions he'll fill. Employees will undergo training until the planned April 1 start-up date. Under the plan, Grand Elk will lease and operate nearly 123 miles of rail line from Norfolk Southern, which has let portions of the track deteriorate, limiting train speeds to 10 mph for safety reasons. Grand Elk officials said planned upgrades will allow the railroad to increase train speeds to 25 mph, expediting delivery and lowering costs for customers. The railroad proposed replacing at least 20,000 ties between Kalamazoo and Grand Rapids and a bridge in Portage and refurbishing two rail yards at an estimated cost of more than $3 million. Grand Elk said it plans to spend an additional $1.2 million on track equipment and machinery and $4 million on locomotives and maintenance. The company expects to use 10 locomotives to haul 22,000 rail cars of freight -- the equivalent of 60,000 to 80,000 truck loads in its first year, worth an estimated $5 million in revenue, according to the railroad's filing. Gordon said the current economic slowdown means it likely will haul less than initial projections at the start, but he thinks there's a bright future ahead for many of the businesses that ship their products on the line. General Motors Corp. was the biggest customer on the line. Since GM announced it would shutter its Wyoming stamping plant in 2009, Gordon said it appears production is already ramping down. So Grand Elk will look to agricultural products, raw materials like coal and aggregate, forest products and chemicals to take the lead. "Several of the customers we have right now are looking for growth within 2009," he said. Basham remains skeptical Grand Elk Railroad will live up to its promises. "Yes, hiring people is a plus and investing money in track is a plus. It all sounds good on paper." he said, adding that he will continue to monitor for any delays to Amtrak passenger trains or increases in shipping costs on the line. Chris Wheelock is a freelance writer in Kalamazoo.
more... Grand Elk Railroad officially takes over operation of freight line Wednesday by Chris Wheelock | Special to the Kalamazoo Gazette Monday March 30, 2009, 6:59 PM Chris Wheelock | Special to the Kalamazoo GazetteGrand Elk Railroad crew replacing steel track at Botsford Yard in Kalamazoo. Each rail weighs approximately 8,000 lbs. KALAMAZOO -- The rumble of the locomotive diesel engines is distinctive and loud. At the far end of Botsford Yard on Mills Street, a small crew is working on one of 19 tracks that feed the rail yard. Nine of them are out of service because they're in need of repair. Starting Wednesday, a small start-up, freight-line railroad -- the Grand Elk Railroad -- will officially come to life. Grand Elk, which takes its name from the 123-mile route from Grand Rapids to Elkhart, Ind., has been running freight in a caretaker mode for rail giant Norfolk Southern for several weeks now. It's what's known as a short line in railroad parlance -- a Class III carrier by the federal government's definition, earning $28 million or less in annual revenue. General manager Rodney Gordon and his 54 employees have a lot of work ahead of them to make a nearly $9 million investment pay off for parent company, Watco Transportation Services Inc., based in Pittsburg, Kan. "It's going really well," Gordon said Friday from his office across from the train depot in downtown Kalamazoo. "The first week was a little shaky because the amount of work that was left here. ... We're getting better as we go." The prospect of 58 jobs with the railroad brought 3,600 applicants when hiring started in mid-February. Grand Elk is a nonunion railroad. Gordon said it has only three more workers to bring on board -- individuals who have already been selected -- but it will do so during the next two weeks when things "calm down a bit." Conductor Levi Stevenson, of Portage, relocated his family back here from Idaho after a year and a half to take one of the very first jobs offered. The Portage native moved to Idaho to take a job with Watco. "It's humbling, to be honest," Stevenson said, "especially in this economy. My wife's extremely happy. I like the stability that comes with it." Stevenson said his wife, who's originally from Utah, is very close with his family here. Grand Elk has an ambitious plan to replace 20,000 railroad ties on the track between Kalamazoo and Grand Rapids by the end of August. Gordon said the condition of the track limits train speeds to 10 mph through that section until repairs are made. The goal is to make the repairs by summer's end so the speed can be increased through the section to 25 mph. Grand Elk also needs to replace a bridge in Portage where the track runs through Celery Flats. The bridge's condition currently limits train weight to 273,000 pounds. The industry standard is 286,000 pounds. Gordon wants to have the bridge work completed by October. Numerous road crossings also need attention, work that is being coordinated through the Michigan Department of Transportation and local municipalities. Gordon says Grand Elk's business model is realistic, with the expectation that the economy will pick up in 2010. For now, the railroad has lowered its forecast for this year from 22,000 rail cars of freight to between 18,000 and 20,000 cars. "We wouldn't have come to West Michigan if we thought it was going to be a long-haul recession," Gordon said. "With alternative energy coming, if you want to haul windmills, the best way to haul them is on a train. If you want to find different ways to haul anything ... we know the train's the way to go."
