In an old issue of Trains (I believe that’s where it was), I read about how the CNW was nearly bought-out by a corporate raider who intended to carve-up the line and sell-off the pieces. As I recall, Japonica Partners attempted the hostile takeover. This eventually lead to the UP buying CNW to preserve their shorter route into Chicago.
Are there other recent examples of corporate raiders threatening railroads? I don’t mean the robber barons “of old”, but rather more recent matters.
TCI comes immediately to mind.
tHAT’S THE WHOLE THING WITH csx, RIGHT? i NEVER QUITE GOT THAT, THEY HAVE A LAWSUIT OR SOMETHING?
Nothing new here.
TCI/Anschutz/Signal/Blackstone/Icahn/all of the leverage buyout operators of the 1980’s…
I remember that fairly well as I was working for the Iowa Interstate Railroad at the time (late '88/early-mid '89). If I remember correctly, Japonica Partners was led by former Chicago Central President Jack Haley. Sometime in the spring of '89 the UP acquired an option to purchase the IAIS to protect its interest in the Chicago-Omaha corridor should Japonica succeed in taking over CNW.
Corporate raiders are nothing new to railroads. The New Haven was no stranger to corporate raiders, the last one being Patrick McGinnis in the mid 1950’s. While the New Haven had its own problems with finances due to the loss of traffic caused the downturns in manufacturing in the New England Patrick Mc Ginnis’s running that railroad didn’t help the situation.
Corporate mischief is really nothing new to the rail industry. The new group has nothing on folks like Mr. Jay Gould, and his ilk of the mid 19th century or the Credit Mobilier Scandals (those even had the US Congress involved) when building the Union Pacific in the 1860’s. Railroads were America’s first big business. So it is really no surprise that financial raider types have been around with them as long as they have been.
Big business, love it or hate it, has a way of keeping things interesting.
PL
“Raiders” and “Threatening” are obviously perjoritive words.
As my cornel used to say, “Everybody needs a kick in the seat of the pants from time to time.” He knew how and when to kick.
Sometimes corporate management gets too comfortable, resists needed changes and inovations, waits around for retirement, etc. This causes the company to underperform and cheats its owners out of money.
If some people figure this out and can make their case to the shareholders (they ones being shortchanged) they can oust the too complacent management. This is a good thing.
The media seems to need to make a morality play out of every story. So we get terms like “Corporate Raiders”. But it’s the stick part of the carrot and stick thing. Management needs to keep on its toes or find themselves out on the street. Like everything it has a down side, but all in all I think the benifits of this system outweigh the drawbacks.
It’s not entirely pejorative, look what Carl Icahn did to TWA when the board of directors decided to let him buy the airline.
If you are a (publicly traded) corporation your stock is always going to be vulnerable and once a “raider” has control of that stock they can pretty well do as they wish even if their actions are perceived as being detrimental! The movie was lousy and Richard Gere is always lousy but his character in Pretty Woman was a near perfect portrayal of an iconic “corporate raider!”
After the failed SF SP merger was killed in 1986, billionare oilman T. Boone Pickens tried to stock raid the Santa Fe, but was blocked from doing so. Connected w/ this was a plan to carve much of KS trackage including mainline trks from Ellinor out to probably La Junta and Newton south to Winfield. I had a Aunt who was a stockholder back then and she wasn’t thrilled on the proposed takover. This dude recently gave millions to Oklahoma St Univ to upgrade its football stadium, the stadium renamed Boone Pickens Stadium and everytime OSU football is on tv, they have to do a live on camera interview w/ him. Nedless to say, the mute button is pushed.Not a Pickens fan by any means. Not a fan of OSU either, never have been. Go Sooners!!!