Look at the report this way. Imagine CSX as say Swift trucking since they are one of the larger carriers in the trucking field and does not have one of the best saftey records anyway. Now imagine the 22K miles of track were a Tractor of the Tractor Trailer OTR truck going down the road. NOw all of a sudden 3500 units were cited and placed out of service til repaired and another 199 had to be towed to a repair shop before they could be moved. Imagine what your investors would be doing to you on the Street this may be the wake up call CSX needed finally. By the way trucking is taxed even heavier than railroads by the time you figure in fuel taxes, highway useage tax plus all the state fees that they get hit for in EVERY single state even if they do not run in there. New Jersey has a tax of 2K if you even deliver one load a year to that state.
Good point. Not to mention all the mommies boiling in outrage, because those trucks share the same highways they use to cart around their chil’n, it would be a mess.
Here is the way I see it, for better or for worse: The practice of using deferred maintenance as a way to doctor the bottom line, is nothing new. Historically, some RR’s were forced into that position as a means to postpone or avoid bankruptcy (mostly postpone, because eventually that neglect becomes a monster, that eats them alive)
CSX appears to be doing this, during periods of record good business.
So, after the whiny politicians, outraged mommies, and sensationalist media ho’s have all found satisfaction beating their drums, the REAL issue will be what has CSX done with the money it could have spent on plant?
If it’s been put to a constructive use, say perhaps retiring debt, or diversification…then the stockholders really have no gripe. And if it’s been distributed to stockholders as a dividend, well then, mgt has obviously done nothing that the stockholders can gripe about.
Unless, that is, there is privileged stock. Stockholders that may have enjoyed the distributions, while others did not.
Now THAT would be something to think about. Robbing Peter to pay Paul.
I wonder if there are any precedents as to remedy that Peter might seek, if such does prove to be the case?
Bad blood in New York State…?
CSX Corporation, the railroad company, is suing cities, counties, towns, villages and school districts around New York State in an attempt to hold down its $21 million annual tax bill. A federal lawsuit, filed Tuesday in White Plains, said railroads were being discriminated against because their property was taxed at a higher percentage of market value than other commercial and industrial property.
Crisis Management? One wonders if you add up these costs on a case by case basis, what is the cost versus the ounce of prevention equating to a pound of cure?
CSX Railroad
Bullitt County residents have filed a lawsuit against the railroad alleging negligence and failure to warn citizens regarding a fiery train derailment on Tuesday, January 16, 2007. A dozen tanker cars derailed and spilled various chemicals; residents within a mile of the derailment were urged to evacuate and part of Interstate 65 was shut down for most of the day. The suit was filed in federal court at Louisville and is seeking class action status. The complaint maintains several hours lapsed before plaintiffs learned of health and property risks posed by the incident. Hazardous chemicals were released by the derailment and fire and the suit claims earlier warning would have prevented some human exposure to the hazardous chemicals.
http://www.louisvillelaw.com/lawwire/Other/CSX.Train.Derailment.Class.Action.Complaint.pdf
Another…
Lawsuit seeks care for 500 exposed to toxic chemicals
HULL – A lawsuit filed last week against railroad giant CSX Transportation aims to provide medical care for up to 500 people exposed to cancer-causing chemicals that the compan
The return of Chessie in some form would be awesome! Probably won’t happen, but I hear ya wallyworld. As for the 199 violations, I guess everyone needs a goal to strive for.[%-)]
CSX Shares have increased over a $1 in the past two days since the FRA report.
The reason CSX shares could be up could also be that unwanted buyout offer also. I for one would want a closer look at the books in the maintance budget to see were the money is going we know one place it is NOT GOING that being paint for bridges could it be going to the design team to keep coming up with those new paint schemes every 2-3 years.