After the Merger...

It didn’t pop in my head till yesterday but…what happens to CEO’s, President’s, “the upper people” of a railroad after a merger? For example, The Western Pacific merger into the Union Pacific.

Or…what happens when a merger fails? For example, the Southern Pacific and Santa Fe?

Usually you take your Golden Parachute ($$$$) and go do something else. If, like most of us lower down the food chain, they may or may not have a job for you and you leave with perhaps two weeks pay. Its good to be CEO.

John

You open up a Harley Davidson shop in Gettysburg, PA.

http://www.battlefieldharley-davidson.com/aboutus.asp

Heads roll, trains don’t.

You do understand I can be sarcastic and cynical, don’t you?

[(-D] [tup]

Actually, it depends. The Harley shop referenced above - also [(-D] [tup] to that one, by the way - is owned by David Levan (& his wife), who was big ConRail’s last CEO up until the merger with and split-up between CSX and NS, whose CEO’s both stayed (John Snow, & David Goode ?). Levan’s job was to get as much $ from them for his shareholders. I suppose he was successful enough at it in the bidding war that ensued - I don’t recall any complaints that it wasn’t enough - and I’m sure he had enough shares or compensation tied to the share price that he wasn’t hurt financially by that, either. And keep in mind that every $ he got for CR came from either CSX or NS, and that would not have endeared him to either of those managements or boards. (Kind of like being the defeated general in a hard-fought military battle - you done well, but at a cost to your enemies of so much that how much mercy can you expect them to show to you ?). And even though the much-smaller (10 % of the former size ?) CSAO (ConRail Shared Assets Operation) survived and still needed a CEO of some kind, he was made redundant. I’m sure he cried all the way to the Harley shop in Gettysburg.

Others ? Take what follows with a grain of salt, 'cause I’m posting strictly from memory, not any recent research or confirmation of these facts, so I’m definitely subject to correction here:

I thought Al Perlman was the WP’s “caretaker” CEO until it was merged into UP in the 1980s. He’d already come back from retirement to do that, so I suppose he was just as happy to go back to that status.

SP-SF - Wasn’t SF’s John Schmidt the architect of that aborted merger ? I don’t think he lasted past the next shareholders meeting. But SP’s Rob Krebs stayed on - he’d already s

Maybe these names of CEO’s may help:

Downing B. Jenks (CEO of Missouri Pacific)

Gerald Grinstein (Not Norman Grinstein)

John Kenefick (CEO of Union Pacific during the MP/UP/WP merger)

R. G. “Mike” Flannery (Later took over the Western Pacific)

At the time of SP, it was Phil Anschultz

Thanks for all your replies

Go east and look at what happened to the DL people in the EL merger. And then what happened to everyone in the Penn Central merger. Then what happened to everyone in the CR (mis)creation (remember I am sarcastic and cynical). There have been some successfull mergers where everyone ends up in happy land, but most of the time one of the partners emerges with more power or thrust than the others and everything changes. And not just in railroading, either.

I understand that the DL&W people lost out in the Erie-Lackawanna merger, and it’s well-known that the NYC people lost out to the PRR’s troops in the PC merger. But ConRail was a mixed bag, as I saw it. Remember that Amtrak got the NEC at the same time which created a real need for qualified people, and there seemed to be a shortage of capable managers at all levels for several years - no doubt because each of the formerly struggling railroads still had a bankruptcy “estate” of land and other properties that had to be managed, claims for the CR conveyance property to be filed, litigated, and collected, liquidated and distributed, etc. It seemed to me that the ex-PC, RDG, and E-L personnel pretty much found homes in CR; not so much for the CNJ, L&HR, and LV folks. CR top spots seemed to be the next step for ex-Southern Rwy. guys for the late 1970s and early 1980s - one fellow was tragically killed when he stepped off an inspection train into the path of a passing freight. Did L. Stanley Crane come after the Southern-NS merger made his former position there redundant ?

Another series of mergers that I’m not familiar with the personnel - but which might illustrate all this as well - are the C&O + B&O + (ACL & SAL = SCL & L&N “Family Lines”) = CSX mergers (did I leave anyone out ?)

Evergreen, thanks for the correction & supplements - some of those I should have known, others I don’t think I ever did.

  • Paul North.

Wasn’t there some sort of scandal on the Penn Central?

Even though railroads are monopolies that the personnel operating the company have to have responsibility to handle it right, sometimes a decision can make things change.

For example, Federal Judge Frank J. McGarr’s decision to liquidate The Rock was considered horrible especially when Rock was actually coming back.

For the Atlantic Merger Section, it would be

C&O purchased the B&O in 1963, the WM was jointly operated by the two starting in 1964. In 1973 the WM was purchased by the C&O and operated by the B&O (CSX Corp began in 1980 after the holding company mergers). The WM officially disappeared in 1983. The B&O merged itself in the C&O in 1987 and CSX Transportation offically began.

Now to the Seaboard Merger Section (which is more complicated),

The Atlantic Coast Line merged with the Seaboard Air Line in 1967 and became the Seaboard Coast Line. From there, the SCL absorbed the Louisville & Nashville, Georgia Railroad, and Clinchfield in 1982. On the start of 1983, the SCL renamed itself Seaboard System (The colours of the SBD are the exact same ones of the Family Lines System).

During the SBD years, it took down several other railroads:

South Carolina Pacific Railway (1984)

Louisville, Henderson, & St. Louis Railway (1984)

Atlanta & West Point (1986)

Columbia, Newberry, & Laurens (1986)

Intrestingly…the Western of Alabama was officially merged away in 2002 but as a operating subsidiary.

And yet, you have to admit that SBD’s paint scheme was simple…but to the point.

Weren’t PRR and NYC complete Rivals to each other?

I do believe that would qualify as an understatement.

Yes, PRR and NYC were rivals, but they were thinking of merger as early as 1953.

When merger happened, Perlman was inneffective and ignored. He eventually left to head another railroad as stated earlier. New Haven was forced to merge with the Penn Central but none of their brass was represented on the PC board. The PC’s org chart shows a rather even scattering of NYC and PRR management, with PRR people reporting to NYC and vice-versa.

Penn Central was, effectively, the PRR’s acquisition of NYC and NH. There was no real “merger” there. PRR ran the show and there are a handful of out-of-print books describing the financial scandals that transpired, all at the hands of officials from the PRR. The minority of NYC brass on the PC board isn’t talked about much in these books for some reason or other aside from Perlman.

As for what ‘officially’ happens, it is a unique arrangement in every case who goes where. Even so, after the merger, they can be forced out, like Perlman was. Most of the operating NYC brass were forced out of PC.

(Can you tell I’m on my third Conrail/Penn Central book?)

Jerry Davis was the CEO and president of SP at the time of merger with UP.

http://findarticles.com/p/articles/mi_m1215/is_n12_v197/ai_19007720/

http://articles.latimes.com/1995-05-07/business/fi-63491_1_southern-pacific

http://www.nytimes.com/1996/11/07/business/president-resigns-at-union-pacific.html

http://www.uprr.com/aboutup/history/uprr-chr.shtml

Even though ‘Mr. Pearly’ landed as CEO of the WP, he did managed to modernize the railroad system but competition from the SP, ATSF, UP, and BN made if difficult.

I’m guessing that on the PC, the service was poor due to too many unreliable locomotives. However, it’s interesting to know that the PC practially had ALMOST ANY kind of power running on it’s system. Of course maintenance was poor and railroads such as Cleveland Electric Illuminating Co. and Detroit Edison Electric Co. were founded to transport their own coal.

What even happened to Pearlman after the WP?

When it came to the MP there was merger talks with the Southern Railway. The UP was offended and convinced the MP to merge away into it. Kinda like saying ‘a small fish swallows a bigger fish’.

Supposedly after his work on the UP, there was a railroad park named after John Kenefick?

And it turns out you’re right, Davis was the CEO of the SP, Anschutz was an oilman based in Denver.

Paul, Lou Menk went to the Q from the Frisco. There was an article in Trains a few years back wherein the author told of how Mr. Menk brought about the end of much of the Q’s regular passenger service and also, as I recall, steam excursions.

Johnny