Okay you conspiracy theorists, I may have one for you. I heard that the reason that Burlington Northern & Santa Fe merged is that both companies were afraid of a takeover by Canadian National. [:-,]
Apologies if this thread has been done before but what was the reason(s) the merger happened[?]
BN and CN tried to merge, in I think, the mid 1990’s to become North American Rail. Regulatory agencies on both sides of the border weren’t too excited, and the deal went away.
BNSF and CN. 1999
At the time that BN and ATSF merged the CN was in no position to acquire anybody.
It was owned by the Canadian Government. BN felt it need to expand in order to compete with the enlarged UP. SP would not have been a strong move as the SP served good markets but was struggling financially. BN certainly did not want the UP to merge with Santa Fe.
But UP did in fact put in a bid for the Santa Fe. BN won out, which forced UP to get the rest of CNW (and later, SP)
I read an old issue of Pacific Rail News (~1994) in which a UP chairperson stated something along the lines of “If we had wanted C&NW, we would have gotten it already when the price was lower.” 0_0
If I remember right (sketchy concept) The UP launched a hostile takeover bid on the SF to drive the price the BN had to pay for SF. They had no intentions to aquire SF, they just wanted to drive up the debt aquired in the purchase. That would give them a better competitive edge when they merged with the SP.
Union Pacifics bid for the Santa Fe may indeed have been to force up the price the BN had to pay knowing that BNSF would not be able to do the same when the UP moved to acquire the SP. For Gluefinger the UP’s acquisition of the C&NW closed in April 1995, while the BN’s acquisition of the Santa Fe didn’t close until December 1996. The UP really had no choice about the C&NW, yes they had a hold on the WRPI, but can you imagine the cost to upgrade the IAIS or slightly more likely acquire the CC&P? In the case of the IAIS its all single track with no useable yard at the Chicago end, lousy access to the BRC, etc. The only thing that could be better is easier to run through to the eastern carriers.
That’s exactly the point. UP really wasn’t interested in the Santa Fe. OH I wish I was a fly on the wall in Krebs’ office back then when he was “discussing” the matter with UP.
Take care,
Russell
Oddly enough, I was thinking (stifle the laughter, please) about BN + SP just today. My question came from re-reading the “Mountain Railroads” issue of TRAINS. Comparing the profiles of the various routes, I’m curious as to people’s opinions if a BN+D&RGW+SP route would have been viable in competition to UP+WP. All I can think of is mountains, mountains, mountains.
If the BN had not bought out the ATSF and the UP did. Then who would’ve the BN took over?
I have heard the same thing many times.
Something funny about the BN taking over the SF is that someone made a thread a while back at stated it was the SF who bought the BN. [:D] [:o)] [:D] [:o)] [:D] I have also heard that Santa Fe was always a poor railroad. That is one reason they rebuilt the covered wagons into CF -7s. They were too poor to actually buy new power and the tax breaks for rebuilding them were to the railroads advantage.
I don’t know if SF was a poor railroad. If they were they did a good job of hideing it. From a railfan standpoint they always came across to me as a class act. I am and always will be a SP fan first and foremost, but If I was to pick a second favorite I think it would easily be the Santa Fe. Now I didn’t really get to know the SF till around 90’ or so but I was impressed. Doubletrack mainlines, Warbonnets and all those hotshot intermodals impressed me. That and all the various loco models running around at the time. I really miss that especially now that just about every BNSF train around here has more GE Pumpkins. It seems we get more variety of NS power then BNSF !! I hope we at least get some of those new SD70M-2s around here to break the monotony.
I don’t think that the SF was a poor railroad, just a savvy one. At the time that the CF7’s were built, rebuilding was all the “rage”.
Bert
I read an article somewhere years ago that stated that SF wanted new power but just could not afford it. That is why they started the rebuilding program.
Rebuilding was nothing new. During the depression railroads could not afford to spend money on new power and found that rebuilding old power into “new” power would really stretch their dollars. Railroads not only built some of the “new” power that way, but some railroads also built their own cabooses too.
During WWII, many of the railroads wanted and needed new diesels but the War Production Board was very stingy with new diesels. So many railroad either build their own new power almost from scratch or rebuilt medium sized older steam into larger steam power (Frisco and SSW both come to mind here).
N & W even built new steam power in the late 40s to early 50s.
At the time that the CF7 program was started, ATSF still had an inordinate number of F3’s and F7’s in its fleet which did not work well in local service involving switching en route. ATSF did not feel that their was an economic justification in buying new power (GP38’s or U23B’s) strictly for local service. Consequently, the CF7 program was started to rebuild aging F units into road-switchers for local service. ATSF got about 15 additional years of service out of the CF7’s and many of them wound up being resold for service on Amtrak and shortlines.
That program also kept the mechanical shop forces employeed during some hard economic and political times. The CF7 program ran from 1969 to 1978. During that time the interest rates became sky high (not good for railroads wanting or needing new power), Pres. Nixon resigned, VP Ford became president, then Jimm Carter.
For those interesting in reading more about the CF-7 rebuilding program here are a few links.
http://www.qstation.org/CF7/CF7_Background.html