In the early 1900’s the Ottoman Empire (Turkey and the southeast corner of Europe near it) was refered to as ‘The sick man of Europe’. The Ottomans had a lot of on-going problems. Eventually those problems caused a spark that precipitated WWI which in turn pretty much caused WWII.
CSX has had to deal with John Snow, Conrail merger issues, possible merger with CP, buying an $84 million CEO, Mantle Ridge and the current issues about the future of CSX.
Is CSX the sick man of North American railroads?
Mantle Ridge has made CSX sick by putting a invalid in charge for $84M.
Mike Ward had the company on a steady course until Mantle Ridge fed financial salmonela to the institutional investors - they are dead, they just don’t know it yet.
CSX is certainly not sick as were PRR, NYC, New Haven and several other lines swept into Conrail, nor MILW, nor RI.
CSX is in much better shape than was virtually every carrier through the 1960s and 1970s, a result caused by the virtually total economic regulation of the industry.
As to CSX position within the industry now, that calls for more research than I am willing to do tonight.
You forgot to mention their neglected bridges. [st]
CSX will likely be fine after the current group pillages the treasury and the American Taxpayer gets socked with a hefty “too big to fail” repair bill for putting Humpty back together again.
CSX is a mess. Harrison gutted the company to cut costs. Service is tanking and customers are looking for alternatives. Anyone can cut costs by firing people but it is a short sighted fix that doesn`t work. CSX is being flushed down the toilet.
Someone once (like 10 years ago?) described CSX as “The smartest bunch of guys who couldn’t run a railroad.”
To be clear: I don’t agree at all with that conclusion - because CSX then and now has a lot of challenges that defy simple solutions (big surprise there, right? [heavy sarcasm] ), but I thought it was a funny turn of phrase.
I like that. It reminds me of one of our former customers who was a very competent neurosurgeon. OTOH, he couldn’t fly his plane without damaging it. I did three major repairs to his Seneca and when he upgraded to a Beech Baron I did two more.
I am not a vampire investor - I don’t want to suck the life blood from a company and leave a moldering hulk. Maybe Mantle Ridge ought to adjust it’s sights - suck the life blood out of AllState or Nationwide some of the other ‘institutional investors’ after all they have more blood to be sucked!
Trade and business media seemed to refer to EHH has a turn around artist. They made it sound like the railroads he went to were almost at the court house door, just days (if not hours) away from bankruptcy. IMO, the only real problems wasn’t that they weren’t profitable, but that they weren’t profitable enough and/or returning money fast enough to the short term investor.
Like sharks that can smell blood in the water, these activists can smell money that can be squeezed out of a company. Even if it’s only for the short term.
Well, here in Ohio along the old B&O, there are far fewer trains lately; then yesterday I read that it’s possible, if not likely, that the entire main line from Greenwich, O. to Baltimore may be up for sale, this only a few years after the tracks were lowered under bridges along the route at no small cost. There’s probably chaos or at least confusion and low morale at headquarters; how many of these same people will be at their jobs in 5 years? On top of that, revenue’s down. Profits are up? Yes, but for how long under these conditions?
If these aren’t the symptoms of the sick man of railroading, they sure as heck are not those of a railroad that’s thriving and has a zest for life.
CSX needs a skilled team of Doctors of Railroading to turn it around, but instead this Board of Directors, the hedge funds and their management ilk are either indifferent to or not up to the task that’s before them.
Nobody thought GE could go out of business, either.
The way things are being run at CSX right now sounds like the head doesn’t know what the body needs and the needed doctors to fix it are on vacation or won’t take the insurance plan. What CSX needs is a true railroader to come in and take the reigns instead of a freaking hedge fund. Hey maybe Mike Haverty from KCS could merge CSX with KCS and save them.
CSX still has a market cap of $51 billion - that is more than NS, CP or KCS.
All US railroads are going to benefit from the Tax Cuts and Jobs Act of 2017, so the ghost of EHH is lucking out in that regard.
It would not be surprising to see CSX partitioned between a ”tag team“ of CN and BNSF, with CN getting more of the north-south portions of the Iron Triangle as stems off its main trunk from western Canada and BNSF getting the east-west routes of the Iron Triangle such as the ex-B&O and NYC, and some secondary east-west mains such as the ex-B&O to Louisville, ex-NC&StL to Memphis and full Access Birmingham to Atlanta.
Regarding a possible break-up of CSX, note that CP already has and uses trackage rights south over the D&H to Schenectity and then south over the Hall Gate Bridge to Fresh Pond Jc. to interchange with the New York and Atlantic (LIRR freight service) and with their transfer to Cross Harbor. So if CN gets something CP would also be involved. They might want direct access to Hunts Point Market for Canadian food produce. (Or do they have that already?)