Prior to 1970, the Great Northern and Northern Pacific railroad shared a headquarters building in St. Paul. With the completion of their 1970 merger (which also absorbed the CB&Q and the SP&S), the newly formed Burlington Northern maintained their HQ in St. Paul, but moved to Seattle in 1981, and finally to Fort Worth, TX, in 1988.
Why did the BN move to Seattle?
Even more puzzling, why in 1981 did the BN move again to Fort Worth (just after acquiring the Frisco, which had its HQ in St. Louis)? At the time, I’m not certain any of the BN lines reached Fort Worth.
Book references documenting the reasons for the moves would be appreciated. Thanks.
I don’t know the reasons for the various Hq moves but Ft Worth was on the Burlington’s Ft Worth & Denver line, the route of the Texas Zephyr. It was also on the Burlington - Rock Island line to Houston which was the route of the Sam Houston Zephyr and the Twin Star Rocket.
Good questions - esp. since the move to Fort Worth was long before anyone ever thought BN+SF would occur, which now afterwards makes it seem a little more sensible. Forth Worth is associated with Dallas - certainly a major city - but of no operational significance to the then-BN, and not a financial center like New York, Chicago, or LA or SF or even Denver.
A quick perusal this morning of Burlington Northern Santa Fe Railway by Brian Solomon, 2005 (MBI Publishing, St. Paul, Minn., ISBN-13: 978-0-7603-2108-9, ISBN-10: 0-7603-2108-6) didn’t find any mention of that move - but that’s mostly a photo and railfan type of book.
More common than most people think, the HQ of large corporations is often located or moved close to the CEO’s home or similar, rather than where a rational, objective assessment would place it. A few years later, UP did exactly that - moved its business HQ from New York City to Bethlehem, PA to be much closer to the northern suburban Philadelphia home of its then-CEO Drew Lewis; after Lewis retired, I believe UP then moved to Omaha. So there’s a possible avenue of exploration, to see if that holds out.
I wasn’t aware the UP’s corporate headquarters had ever moved out of Omaha, let alone to Bethlehem, PA. Thanks for the heads up on that one.
I wouldn’t consider the distance between Bethlehem and Philadelphia to be an easy commute, it being a minimum 1.25 hours by car one way. Lewis was, however, most definitely a Pensylvanian through and through, even have unsuccessfully stood for governor in 1974. I suspect, as you point out, that Bethlehem was where Lewis resided, and so that became the corporate HQ for UP for most of the eleven years Lewis was CEO.
The HQ for the railroad (operations) apparently never strayed from Omaha, however.
On UP - Right, it was just the corporate/ financial people, about 200 of them altogether - the holding company, really - that were in NYC [I have no idea of when or how that first occurred], then Bethlehem, then to Omaha. By then - late 1990s, if memory serves - Omaha probably had gained a lot more respectability, being the base for uber-investor Warren Buffett and his Berkshire-Hathaway holding company. The RR Ops have always been in Omaha, though, as far as I know.
Lewis resided - then and now - in the rural part of upper Montgomery County, PA, just about exactly midway between Harleysville and Schwenksville [to name 2 towns which would be recognizable and locatable to those from outside the area]. It is about 26 or 27 miles NW of Center City, Philadelphia. But even with that ‘head start’, it still wasn’t and isn’t an easy commute - Google Maps says its still about 35 miles over a convoluted, indirect route and 1 hr. 5 mins. for the shortest route to Bethlehem. There, UP was located on several floors of then-Bethlehem Steel Co.'s ‘Martin Tower’ office building, in the northern part of the City [actually in Lehigh County, as the City of Bethlehem is split between it and Northampton County] at the southeastern corner of the intersection of 8th Avenue with Eaton Ave., north of Route 378. [Martin Tower has been vacant for several years now, post-Beth. Steel, awaiting redevelopment.] I would not be surprised to learn that Lewis used a helicopter - I believe he had a pilot’s license, too - to shuttle between his home and that office, to avoid that commute.
On BN - I think I got rid of all my reports and mailings from BN back then. So as best as I can recall - which is certainly subject to correction - in the early 1980s BN thought that in the immediate post-1970’s energy crises’ [recall that there were 2 - late 1973/early 1974 in conjunction with the
I have no insight into why BN moved to Ft. Worth, but being a life long Minnesotan, I do recall the talk at the time was that they left Minnesota to escape the high corporate tax’s the state charged.
I don’t have anything specific on BN’s move, but I suspect that government economic incentives may have come into play. Texas probably has a lower corporate tax rate than Minnesota, and as something of direct benefit to BN employees that relocated, Texas has no state personal income tax.
Other factors might have included incentives from a commercial realestate developer with a too large inventory of vacant space. Locating near an airport with more direct flights to more destinations can be considered a plus.
And-Do you know what winters are like in Minneapolis?
I don’t recall the move to Seattle, seems to me BN was in St.Paul and then went to Ft.Worth in the eighties.
AFAIK the Empire Building in St.Paul is still in use so I don’t think the building was crumbling or anything, and it’s across the river from the downtown St.Paul airport (and only a 20-30 min. drive from Twin City International Airport, a major hub for NorthWest Airlines). I don’t know how crowded BN was there in St.Paul, could be they have more space in Texas.
I wouldn’t be surprised if taxes weren’t a factor, although I think taxes may have more to do with where a company was incorporated, not where it’s HQ is?? Seems to me there are plenty of companies whose main office is in New York who are incorporated in Delaware for tax and other legal purposes.
My Dad was a Letter Carrier out of Lake Street station in south Minneapolis for over 30 years. He said the worst winter he ever went thru was the winter of 1944-45 when he was in basic training for the US Army in Mineral Wells, Texas, not far from Dallas-Ft.Worth. [:)]
When the Frisco and the Burlington Northern merged; the surviving corporation was called Frisco Northern by some people even though the name Burlington Northern remained. The Frisco had in effect taken over and the focus of the company was no longer on the Hill Lines. The move to Ft Worth was logical if nothing else.
Those of us who are fans of the GN,NP, and CB&Q will remember them in the Twin Cities. Thank goodness that relatively few Frisco units showed up here after the merger and Frisco seemed quick to paint their locomotives in BN cascade green.
Being raised in the far north, and relocating down here ,180 miles east of DFW area, I can testify to the damp cold that the winter can be, with the high humidity , compared to my 18 years of winters in Montana, it is bone chilling, and it seems no matter how much clothing you put on, it’s still cold. But , with that said, the winters down here are in reality, 30 to 45 days? It beats 8 months up north shoveling snow any time. Basic training can also contribute to the feeling of despair. (been there done that, San Antonio 1981) [:(]
The thousand of snow birds that travel and relocate here seem to think the winters aren’t all that bad, taxes and real estate are pretty attractive too. [:D]
As far as BNSF? No idea but I think the tax rates would rank high on the list, as well as incentives by the state and city to draw large corporations down. The southern states have been lobbying hard for years to attract business away from other areas.
I wasn’t living up here (MN) at the time, but I’ve gotta believe those Minnesota-Nice tax rates were a big part of the rationale. With the state legislature’s and the Minneapolis city council’s avowed policies toward “social engineering” (i.e. more and more welfare, subsidized housing, etc.), BN wouldn’t have been the only industry to pack-up and move because their profits were being taxed way too much.
As for Frisco colors, I can’t say as I’m a big fan of the Frisco (never saw them in action), but I still like their red & white compared to the orange, yellow and green of the BNSF tod
Low corp taxes, 0 personal income tax, the Forth Worth & Denver line direct into Houston, and Forth Worth is a major railroad hub, plus the fact that during the late 1980 and early 1990s, the FWD area had an explosion of growth, homes that in most areas would sell in the $300,000.00 plus price with all the goodies were on the market for $250,000.00 or less.
Add in easy access by air, DFW and Love Field almost dead center between the two, and a city that actively persued companies to relocate there…whats not to like?
Paul, untill the BN SF merger, the only line the BN had into Houston was the joint Rock Island, CB&Q Fort Worth and Denver…which ended at Settagast yard…one way in, one way out…and they had to deal with the SP when they got here…
If I recall correctly, Trains Magazine, Railway Age, and/or The WallStreet Journal wrote that TAXES had everything to do with the Burlington Northern, Inc. move from St. Paul to Seattle. And it wasn’t just taxes on company owned real estate, inventories, and corporate income taxes, it was the high personal income tax rates being assessed on employees. The Minnesota state government thought B.N.I. was bluffing when they sought tax relief, and so the elected clowns in St. Paul called their bluff. Well B.N.I. wasn’t bluffing, and subsequently jumped telling the Minnesota state government to bow-up and kiss-off. B.N.I and the railroad subsequently moved headquarters to Seattle.
When Union Pacific Corporation Chairman Drew Lewis retired, his successor moved the Corporation’s headquarters to Dallas, Texas around 1997. Dallas, you see, is like Seattle - two cities situated in jurisdictions that share the same state income t
If I recall correctly, Trains Magazine, Railway Age, and/or The WallStreet Journal wrote that TAXES had everything to do with the Burlington Northern, Inc. move from St. Paul to Seattle. And it wasn’t just taxes on company owned real estate, inventories, and corporate income taxes, it was the high personal income tax rates being assessed on employees. The Minnesota state government thought B.N.I. was bluffing when they sought tax relief, and so the elected clowns in St. Paul called their bluff. Well B.N.I. wasn’t bluffing, and subsequently jumped telling the Minnesota state government to bow-up and kiss-off. B.N.I and the railroad subsequently moved headquarters to Seattle.
When Union Pacific Corporation Chairman Drew Lewis retired, his successor moved the Corporation’s headquarters to Dallas, Texas around 1997. Dallas, you see, is like Seattle - two cities situated in jurisdictions that share the same state income tax rate: ZERO percent. The 1997-1998 collapse in railroad service required the full time attention of Chairman R.K. Davidson at the Railroad’s headquarters in Omaha. Eventually the Corporation’s headquarters were moved to Omaha.
Many years ago the greedy New York state government was going after executives who earned retirement credits while working in New York, but who subsequently retired in state-income-tax-free Florida. As I recall, the business press reported that the legislature was having a certain amount of success in collecting state income taxes from those retirees so situated. Today, I don’t know if that practice continues or if the United States Congrees corrected the situation.
Union Pacific’s offices in New York go back to the days of Edward H. Harriman, the lad who reconstructed Union Pacific from two streaks of rust across the prairies into a railroad colossus. Harriman was a Long Islander who moved to the city, and eventually built a nice little place across, up and off the Hudson River at Arden, NY, where he raised trotting horses, his other avocation.
After he gained control of UP, Harriman remained in the city, no doubt because his bankers (James Stillman of National City Bank and Jacob Schiff of Kuhn, Loeb & Co.) were a couple of blocks away. Also, the private bank of Brown Brothers Harriman (Guess who the Harriman in BBH was?) was, and remains, in the city, and it was through BBH that Harriman’s interests in other railroads were pursued (Brown Brothers Harriman retained a seat on the board of directors of Illinois Central, Central of Georgia [later Southern, later NS], and Southern Pacific, among others) for dozens of years after EH Harriman’s death.
The company’s top management remained quite inbred for many years. It also remained in new York. After Harriman’s death, the Chairman of the Board reins were passed to his friend and la
A long time friend of mine flew UP’s helicopter (S-76) when the headquarters was in Bethlehem. 95% of the flights were to NYC and Washington DC. Its a two pilot helicopter and at this level only professional pilots man the controls. The chairman (Lewis) was always in the back at the bar.
As I recall, the BN move was about the same time that a prominent St.Paul company that made hoists and derricks got a big state subsidy to refurbish their plant…and then used the money to move the company to a different state!! Unfortunately, having been burned once, I think Minnesota was a little shy about putting too much money out in similar deals for a while.
The Minnesota = high tax state is a little bit of a myth. Our individual income tax rates are a little higher than some states (although they were cut by 20-25% in the nineties from what they had been)but when you factor in all the subtractions and refundable credits on the return (for daycare expenses, school expenses, etc., elderly/disabled etc.) and the property tax refund for homeowners and renters, and our sales tax rate being relatively low (plus we don’t tax clothes and food) it works out that the Minnesota comes out around the middle - something like 22nd highest taxes paid overall.
Many states that don’t have income taxes have fairly high sales tax rates, and have other fees and “personal property taxes”, “luxury taxes” etc. that often ends up amounting to the same amt of tax as states that have income tax.
BTW in Minnesota part of the taxes collected in income tax and sales tax is sent to the counties, targeted to reducing the property taxes they charge.
OK - I thought there was a helicopter involved in there someplace. The bar proclivity is no surprise, either, if you saw my previous post which in part covered that topic several months ago [though I have no desire to drag the man’s reputation further through the mud now].
Even more puzzling, why in 1981 did the BN move again to Fort Worth (just after acquiring the Frisco, which had its HQ in St. Louis)? At the time, I’m not certain any of the BN lines reached Fort Worth
Ft Worth was the end of the line for the FRISCO and CB&Q was the parent company of FW&D,SP&S which came with CB&Q along with a lot of other locally owned RR on the CB&Q system…
A bit of clarification on BN moves: Burlington Northern, Inc. was the umbrella corporation for the various railroads, resource companies, Burlington Air Express, etc. Richard Bressler was brought in by the BNI board in 1980 to realize the shareholder value locked up in those properties. Simply by looking at that ancient red brick railroad headquarters edifice in St. Paul one sensed ossification. Step inside, and the feeling was confirmed. Mr. Bressler was a change agent.
Ossification was no longer an option. Promptly, in 1981, he hied his office and a very modest corporate staff to Seattle to become “BNI”, distinct from the railroad, a portent. (And perhaps to avert his eyes from the coming de-ossification as “Pisser Bill” Thompson and his Frisco cohorts had their way with Menk’s minions.) The railroad was to remain in St. Paul for a season. For therapy.
A properly chastened, down-sized and reconfigured BNRR operating department moved to Overland Park, Kansas (Kansas City suburb) in 1983. Spying out the promised land on to the south, so to speak. And, yes, back to the Frisco! Meanwhile, back in St. Paul “Mr. Frisco”, Richard Grayson, had yielded the throttle to one of Mr. Bressler’s trusted lieutenants, Mr. Walter Drexel. Mr Drexel was from Texas. Perhaps more refined than “Pisser Bill”, his plan was even more radical … “corporate culture” shock.
That ossified red brick edifice, and the management history it reflected, was figuratively blown into history with the announcement that BN railroad headquarters would relocate to Fort Worth, Texas in mid-1984. From Frisco merger day in November, 1980 to relocation in 1984, BNRR employment had dropped from 60,000 to 36,000. Some explosion. And, yes, Fort Worth was a Frisco town too.