This came strait from a UP Human REsources Manager and may nly be rumor but thought I would sure. Apparently there is a "strong" rumor <-his words, going around that there may be a UP / CSX merger within the next five years.
Keyword= may be These rumors been goin round the last 5 years. "They" say it'll be UP+CSX and BNSF+NS. Yeah I've heard it so many times that I'll just wait till I see it.
I personally would not like to see that. I believe too many companies are already monoplozing things... Microsoft <got busted too Wal-Mart you get the picture....
Definitely would be bad news. When you have captive shippers, you have rate troubles. Such as in my state. Over 100 years ago, JJ Hill and his GN, had troubles over this stuff. We're approaching full circle.... Except, this time, there is an alternative. More trucks on our highways.... :sad: Boxcab E50
A local Section Foreman swore to me that the UP/CSX merger was absolute fact, and was to be announced within six (6) monhts.....! Uh, that was about 12 years ago....? Personally, I think power sharing has everyone confused....whatever?
The CSX/UP rumor has been around longer than the CP/UP rumor. Personally IMHO, both companies can barely run themselves let alone handle a merger. UP is proclaiming all their track work but it really is a drop in the bucket for what they really need. Also both companies will want to be dominant in the merger so sharing won't be an option. Bad news all the way around, egos and bean counters from both companies should put on a real show. Greg
I recall doing a thread on this 3 or 4 years ago where everyone surmised what the merger would be called. For instance: UPSuX CSuX Pacific SiX-PaC CSX P.U. Pac.UP-CSX or simply.... Borg Happy railroading! Russ
I heard BNSF stands for Buy Norfolk Southern Fast, so that match up could be a sure thing.....NOT!:no6qp:
Why cant there be rumors of divisions....hhehehe Make things more competitive. You know, compitetion drives advancement.
Yes. Exactly my earlier point. Mergers are usually, by their very nature, anti-competitive. Great for a few investors and officers. Otherwise, not. There is an old adage "variety is the spice of life." By that, is inferred, all aspects of living. Including business. I fear that Russ is correct. Borg. However, it's pronounced Disaster. :sad: Boxcab E50
Agree with Boxcab totally. With "seamless" service, I wonder how much quicker/cheaper the "Juice Train" gets from Florida to New Jersey? Came to the conclusion some time ago that our "masters" (and I use that word very advisedly) have decided that the U.S. of A. is to become the world's largest banana republic - a few of them, the rest of us avidly consuming. 'Cept with no jobs or poor jobs, consuming becomes somewhat difficult.
Yup. And what's the first step that happens, despite loud promises, post-merger? Jobs in hundreds and thousands go away. Of course, those people keep on consuming goods. No, they don't. They stop buying tv's, cars, etc, as shipped on the RR..... Eventually, even though too few can see it coming now, there is a point of no return. Constant contraction of business, pretending it's profitable, is short term smoke and mirrors. Long term, it's economic disaster in the making. Where are the creators? The entrepeneurs? Certainly not in leadership of railroads today. :sad: Boxcab E50
Well, even though only tangential to the merger question, just like the Birmingham Freight Rate case was to southern railroading in general - doesn't seem like most people question what happens to the value of their money. If you put a lot of these account line items under a constant dollar standard, it doesn't look good - except those in line to get the new money first, as you mentioned - investors and corporate officers. But, if the economics don't offend - certainly the aesthetics should. A "Super Seven" as opposed to a hundred or so corporate entities, most of which, most of the time, paid wages, dividends, and taxes. And each and everyone of them did their own (corporate) way. Which different ways laid to about a hundred different color schemes on their diesels, dozens of different methods of freight car construction and a couple hundred plus ways to deal with the competition. Won't even get into the passenger competition which I know little about anyway. Do just wonder though, what sort of economic or other travail will once again convince people that bigger is not necessarily better and that free, untrammeld competition is good.
The "light" will come on, yet again, only after repetition of the same mistakes. It's the American way. Never learn by errors.... Whether your own, or those of others. Unfortunately, sadly, the current popular business model, especially as espoused by our institutes of (alleged) "higher learning," will only help perpetuate the problem. For some significant time to come. :sad: Boxcab E50
Funny, I thought BNSF stood for Big New Super Frisco.........:biggrin2: I've heard rumors of mergers ever since the Super 7 shrank to the Big 4 and Little 1 (the Little 1 being KCS, which is doing fine, thank you very much). And the aborted mergers (IC+KCS, BNSF+CN)........ Methinks there is a limit in size beyond which, without some astute management, railroads become too hard to run- case in point, UP, who had 3 traffic meltdowns in 10 years, and who has legions of lawyers defending trademarks from fallen flags and not enough RAILROAD FOLKS to actually run things. I wonder if there should not be a de-evolution of sorts, with the large companies breaking up into smaller ones. And for the record, even the shortline moguls are having problems- I was told by a seasoned shortline exec that RailAmerica is having some $$ issues lately.......not sure if that's truth or rumor. As it is, to paraphrase the Apostle Thomas, "Only when I see the wounds will I believe". In other words, never mind the labor pains, I wanna see the baby.
There's some food for thought...De-evolution. :lightbulb: One has to question whether or not any sort of "de-evolution" would actually be a solution or whether it would wind up as being an easy method for "the large players" to cast off, maybe at tax payer expense, pieces of the operation that are less than profitable (like some of the lines run by Amtrak or other services). As an example, take a look at the current "communications" (i.e., telephone, cellular, cable/satilite TV, etc.) market. Also consider that the same basic "Sherman Anti-Trust" legislation that broke up the original UP/SP merger (under Harriman) was used to break up Ma Bell...One has to wonder whether or not a "de-evolution" would just undo itself within 20 (or so) years and what we'd wind up with. Remember that the breakup of Ma Bell was supposed to bring with it the possibility of cheaper rates (specifically "local" telephone rates and services) by "opening up" the market for compitition...Maybe it has worked in some places in the US but not in my neck of the woods... Has anyone ever read the books "Merging Lines : American Railroads, 1900-1970" or "Main Lines: Rebirth of the North American Railroads, 1970-2002" by Richard Saunders Jr.? One of the interesting points that is brought out in those books is exactly the point that FriscoBob makes...At what point does a "system" become too large to be manageable? Personally, I don't have a clue what that limitation would be but I'd bet that at least part of the answer would lie in what the various traffic patterns are. If the large (Class 1) railroads cast off everything except the through traffic (which seems to be the way that they're looking to go), would it work and if it doesn't work, what will need to be done to "fix" it? One of the railroads that comes to mind in this regard is the old Penn Central. Theoritically (on paper, at least), it was a "Super" railroad with the possibility of stream lineing rail transportation in the Northeast. The reality was that the old Penn Central was blotted with "excess" (duplicate) rail lines and that the railroad management couldn't figure out how to make everything "work" together to include the "management" itself. Net result, the company went bankrupt and was bailed out, along with a few other Eastern railroads, by the Federal government with the formation of Conrail. As far as RailAmerica having some sort of financial trouble, I've heard those rumors as well but haven't heard any specific facts as to what the problem(s) are. Purely from a speculative point (on my part), one has to wonder if some of the deferred maintenance or upgrade issues (track, signals, etc.) and/or the raising cost of fuel or locomotive maintenance are contributing factors...
There have always been some spinoffs. But in the far past, they weren't a side effect of mega-merging. De-evolution as we know it today, has been ongoing a long time now. Leases, and outright line sales. Which have brought us MRL, and RA, etc. Some have worked. Some have failed. Due either to economic changes, or plain poor business decisions. Deferred maintenance will catch up to several in the new few years..... Boxcab E50
If the SP merger meltdown and the latest service 'interruptions' on UP haven't taught these corp. execs anything, I think a megamerger would be, unthinkably, possible. I hope the STB, ICC, and who all else that has power over these proceedings, disapproves it. They (Borg) can hardly run their RR as it is now, what makes them think they can run it better or even as good (poorly) with the massive CSX added into the equation?
Good points Boxcab!! Spinoffs being a side effect of a mega-merger is a relatively new phenomenon. I can see a (core) business "spinning off" a subsidiary (non-core) business much like the SP spinning off SPRINT or the Santa Fe Pacific Pipeline Co. (from the aborted SP/SF merger). But, I wonder if a railroad company like UP (or BNSF) would consider "spinning off" a new Class 1 railroad in consideration of a mega-merger with another mega carrier (i.e., CSX or NS)...Maybe something like the old SP (or WP or NP or GN) that would potentially be in direct competition? It also seems to me that some of these "spinoffs" might not necessarily be sound (business or otherwise) in their own right (i.e., if UP "spins off" something like the old WP but keeps all of the feeder traffic and locks it into interchange with itself at both ends, is that really competition? Seems more like a "captive" situation where the new carrier would be at the mercy of the UP). I'm sure that the ICC will have the last say if all of this comes to pass... Sometime ago (a couple of months?) there was an article in Trains magazine that discussed the retaliative merits (or not) of the various combinations (mega-mergers) that were potentially being considered to include combinations involving the KCS. What I found interesting about the various combinations is that none of them were really new ideas...New players and/or faces like CSX and BNSF (and who would have dreamed of CP and/or CN in the US), "Yes", but new ideas, "No". Some of these ideas have been floating around the rail industry ("thinktanks") since the late 1800s, early 1900s, and included an almost exact description of the current day UP (although part of the "original" plan called for the SP to take control of the UP instead of the other way around due to "mis-management" of the UP but probably more due to the Credit Mobilier scandal of 1872 and subsequent bankruptcies in the late 1800s). However, the Trains article had no mention of the "other" (small?) players like MRL, RA, G&W, etc...One has to wonder if they (Trains) felt that since the Class 1s had "cast off" (some of) these lines originally that they weren't to be considered in the equation. As has been pointed out, this type of speculation has been discussed before and for a lot of years without any real changes/effect. Maybe it'll never come to be and maybe it will...Time will tell. One thing is for sure, though, and that is that if there is to be only a couple of "Super Railroads" (i.e., UP/CSX and/or BNSF/NS), management is going to have to rethink it's operations on a much larger scale than is currently being done...A "Meltdown" of such a "super" system would severely cost the US economy and probably more than most US businesses (and/or the government) would stand for. And lets not forget that every dollar lost by a railroad is almost certainly a dollar that is found by the trucking industry...
