This sounds like another reporter covering the same story. From the Trains Newswire 27 March 2006, Story title, BNSF shows off the Transcon for press representatives:
http://www.trains.com/Content/Dynamic/Articles/000/000/006/555uiowx.asp
Yes the RR are running at capacity. I fwe do not want a service meltdown like the UP in 97 and the whole country in WW1 we need to give the RR their tax break to increase capcitay so we do not have this issue. When we think about it still faster to ship a container across the country for a shipping line then reaload it onto another ship for europe then go around the horn or around africa since the mega ships are to big for both the canal or Suez so we will need the capicity for the long term not short term.
But the rail industry has not thought that way in 25 years.
A friend of mine, retired BN, offered the following remark on the rail industry, as it lurches from major policy change to policy change, each one allegedly motivated by regard for the “bottom line” by allegedly “capable” executives.
"If there are any of them left still working for Mr Rose, whose pronouncements sound to me like (finally) an exercise in common sense, I am sure all the Ex-Frisco lackeys who nodded their heads up and down like good little lapdogs when his distant predecessors Richard Grayson and Bill Thompson and a third manager, (well-known for converting double or two main track territory into single track, and who incidentally now is head of another transcontinental railroad as we speak) all said Stampede Pass had to be shut down and the “redundant” Milwaukee Option over Snoqualmie pass sold to State Parks (remember “to better serve our railroad customers,” and “our whole railroad is for sale…”), not to mention the MRL Sale, those same lackeys now are innocently nodding their little heads up and down, when all of this past foolishness is now brought to light.
"Too bad P.Bill Thompson and Gang couldn’t have gotten their hands on all that
Santa Fe double track. They’d have had it all sold for scrap in a jiffy, making
Matt Rose’s job even more difficult now…
"Remember the famous line from the movie “Judgement in Nuremberg,” where the Nazi judge is attempting to convince american judge Burt Lancaster that he didn’t think his support of the regime was wrong or would cause any problems? The answer he got was, “You knew it was wrong when you made your very first
conscious choice to support those people.”
"Lest somebody jump all over me for the Nazi comparison, I don’t mean that at
all. What I do mean is th
The two things that seem to be contrary to each other: in the last paragraph of your quote, third sentence, “You don’t liquidate profitable businesses, or portions of them, just to squeeze out a profit. That’s wrong, and it is wrong whether you do it with just a little short piece of “redundant” track or with the whole dam thing”.
Then compare it to the first paragraph of the quote, the unnamed third manager states that “our whole railroad is for sale…”
If it was profitable and for sale, why didn’t anyone buy it?
The quote “the whole railroad is for sale” is from a manager, judged an incompetent strategist by many. The second quote is from a long time BN dispatcher-- the author of the comment – offering his views on the quality of such managers, including his opinion on the manager who made the observation, “the whole railroad is for sale.”
Yes, the comments are contrary to each other.
His point is that the rail industry paid high salaries to men who are responsible for the current “crisis” which is in many ways a self-inflicted crisis, as most rail industry “crises” have been.
Unfortunately, not a crisis limited to the railroad industry. In recent news reports, recall the major flap over a big bonus paid the the big-wheel of Delta Airlines, right on the heels of the workers being asked for big give-backs in salary and benefits.
Sounds like it will be a repeat of the UP crisis of the late '90s. Only time will tell.
Well, we have quite a few unused rooms at the farmhouse. I guess we could tear out the “excess capacity” so that we’re not paying mothball fees (higher property taxes, more energy to heat/cool, etc). Then, when family growth spurs the need for more rooms, we’ll just pay a contractor to rebuild those rooms at a much higher price than if we’d just kept the rooms minimally maintained…
[oops]
[:-,]
…well, I guess that’s what we’d do if I was a “rail professional”![D)]
I suppose those of you who argue that the railroads should have never eliminated under used lines would also argue that General Motors, Ford and Chrysler are making a big mistake by shutting down plants. After all, what will they do if the American public suddenly decides to “Buy USA”.
The carrying cost of unused or underused assets will put a compnay under in the blink of an eye. The world is littered with the bones of businesses that died because the owners and/or managers did not manage the business assets. If the railroads had not downsized as they did, they would probably now have less ca***han I have in my change jar.
By the way, people do live in houses with much more space than they need, but many will sell the house that is to big or to small to get something that more closely meets their needs. I have even heard that some people who down size their housing just want to spend their money on something else.
Was he saying that common business practises are immoral or capitalism is immoral?
Jay Eaton
If you want to see atraffic capacity issue all you have to do is look at a major city come rush hour. I have seen parkinglots devolp in Chicago LA Atlanta and New York City. The hardest issue for increasing capacity is called the lack of money. We would rather spend money on a war overseas than fix up the highways properly. Right now every Americans share of the National Debt is 90K each.
I would say it’s just opposite: Businesses that circle the wagons will last less longer than businesses that expand aggressively.
You either grow or die.
Wal-Mart constantly expands. McDonald’s constantly expands. Swift Trucking constantly expands. Nissan and Toyota constantly expand.
They are all growing.
GM and Ford constantly close down “excess” plants.
They are dying.
As for the housing analogy, you missed the point, entirely.
I’m convinced he has no understanding of ecnomics (socialist, capitalist, or otherwise.)
People make rational economic decisions and he attributes their thinking to some kind of weird conspiracy thingy.
Now people do make rational decisions that are wrong. But he doesn’t understand that.
He actually said the Milwaukee Road was in recievership because it had too much business and he also said that supply and demand had nothing to do with price.
There is none so blind as he who will not see. And these are the writings of a “blind” man who can not fathom his economic environment.
No, I think you missed my point, entirely.
Ford and GM may be dying, but their demise would come much sooner if they did not dispose of under used assets.
And, Wal Mart and McDonalds do not locate stores in locations that will not immediately have a volume of business that will make the store profitable. Swift does not buy trucks that will not be nee
I don"t think this is it. He just likes to have an argument and tosses out comments he hopes will start something (ie steam vs. diesel).
As to the former, I cannot take credit for the remark, it was Milwaukee Road’s Vice President – Operations who made the comment in sworn testimony to the ICC and it was Forbes magazine which declared Milwaukee in the mid-1970’s “the fastest growing railroad in America.”
Regarding the latter, with elastic supply or demand it does, with inelastic supply or demand it doesn’t.
Best regards, Michael Sol
While going over the reasons for the Milwaukee’s demise can be an interesting intellectual discussion, the Milwaukee Road is quite defunct (over 20 years now) and its resurrection is highly unlikely.
And it was already discussed quite thoroughly in the “Milwaukee Road” thread, which I greatly enjoyed and which taught me a lot I didn’t know.
Actually I’m going to jump on you for listing the wrong actor. Burt Lancaster actual played as the Nazi judge, Ernst Janning. The American judge was Spencer Tracy.
Anyhow back on topic. In light of the time period cutting back trackage did seem like a good idea as it made little sense to keep around old unused track and paying maintenance and taxes on it when it could be used to build new routes or keep up current ones. Business wasn’t as good as it is now and few anticipated it becoming that way.
Most stockholders in a lot of businesses are risk-averse and don’t like losing money. They’ll often go for the most conservative route instead of adventurous. They fear they will lose money if a company keeps pouring out their own money on unused equipment or property and goes belly-up like The Rock did as someone mentioned earlier.
“Common business practices” of sacrificing long term prospects to the exigencies of short term gain don’t work too well in capital intensive industries. I think what the author of the comment was saying was that sure, it is possible to generate a marginally higher rate of return in the short term by cannibalizing long term assets.
Kind of like a tree farm … you can show a h*** of a good rate of return if you cut all the trees; then you are a company in trouble for the next fifty years.
Who pays? The employees, the shareholders, the watershed. And I agree, it is immoral to utilize short term business gains that sacrifices the future benefits for the company and for the society as a whole.
People are acting like capacity issues have never existed before, and that they were unforseeable.
Some comments from one of those notorious consultants:
"In World War I the issue was congestion and too little capacity; the twenties saw a relative balance between capacity and traffic levels. During the G