true doggy. but i still think SF sould of looked east for a merger with csx or ns. it would cut time from interchanges so that it is one line east to west and get the demands faster from coast to coast then look for a weaker BN 10 years later and the absorb a nothern route
Alas, it is common today in all industries to hire people from outside the core competency of the company. As has been mentioned already, it’s not necessary for a manager to be an expert in the area he or she manages.
That said, it is important for that manager to understand the work being performed so they can make intelligent decisions. That’s what lower levels of managment have to provide - the necessary knowledge. The new guy needs to listen, too.
Any new manager/executive, from within or without an industry, can screw things up by making uninformed changes and/or decisions. What an outside manager can often do is bring new insight to the business, allowing new approaches to the old problems.
There have been successes and failures with both approaches.
Yes I will agree their have been success and failers with non rail Excutives lets look at Ron Bruns of UP he was a failer because all the Merger issiues
DOGGY
BN was never mismanaged. Other roads, such as the Milwaukee Road and the Rock Island are now GONE because they WERE mismanaged. I would suggest that “Doggy” is ignorant of railroad history.
OUCH!
I think BN would have survived. From what I’ve heard they were very customer friendly. Listening to the requests of their cusromers and working with them.
Here in Southern California, I heard a lot of stories where Santa Fe didn’t give their crews enough rest between assignments on the road. The lack of rest was fatal.
The BN always seemed to be looking for new top management from outside the company. There was promotion from within in the early years, Bob Downing comes to mind, but after the Frisco take over the process was to look outside the company or the industry to find the majic management super stars from afar.
It could have something to do with BN’s compartmentalized management style that has left a lot of mistrust and jealousy amongst the factions to the point where managers would rather see someone from outside reach the top rather than some from across the hall move up. Probably merging a management team from another company into the mix just serves to still the pot up even more to remaining managers who do not posess the proper pedigree.
BNSF still has a long way to go to make the operations work right. They are running out of railroads and management teams to merge with…
I don’t think that mismanagement has as much to with it as whether the route is worthwhile. As the onetime Editor of TRAINS has correctly posted in this forum more than once, strong routes survive. I have my own thoughts on whether the BN or ATSF was better managed, but in the end, both would have survived because they have many strong routes.
That the Milwaukee Road and Rock Island are GONE is also up for debate. Parts of these railroads have been abandoned, as is the case with all other railroads, but their strong routes survive. In the case of the Milwaukee, its “transcontinental” route did not survive simply it was not the strongest contender on that route. In the case of the Rock Island, however, the Golden State route is a major UP route, as is the line from Kansas City to Minneapolis/St. Paul. Even Chicago-to-Omaha and Herington-to-Fort Worth survive because they are viable routes. In other words, if a route is viable, more often than not, some entity will take over the operation because it’s worthwhile. Most of the Rock Island is not gone, just a part of another railroad, which is the case with most track in the US today.
It’s not as simplistic as that. The Milwaukee PCE was the shortest route between the PNW and the Midwest, the ex-GN was the best in terms of profile. Both routes are/were better than either the ex-NP/ MRL line or the UP’s Blue Mountain lines. If the axiom of “the strongest lines survive (and the weakest lines fail)” held true, the latter two would have been for the chop, not the Milwaukee PCE. Read “The MIlwaukee Road” thread and you’ll see that CP2816 is correct. It was mismanagement, along with the failure to grow (and by default survive) via straight up merger that doomed the MIlwaukee, not it’s PCE line.
UP is constained now because its historic lines in the West are plagued with more grades and curvature than the BNSF lines. The UP failed when it had a chance to take over the Milwaukee PCE and let it go. The Sunset route now may be its only saving grace, but it is questionable if UP can upgrade the route soon enough before the advantage to B
The question should have been could the Santa Fe have survived without merging with the BN? The BN was an excellent performer and the stock market will show that. SF needed the merger with BN to survive as it was being totally surrounded by UP and it is doubtful if it could have survived without BN. The one thing Santa Fe brought to BN was the ability to run tofc at highway speeds which the Santa Fe excelled at. They do the same with doublestacks today and the merger strengthened the combined railroads place in this market.
I’m confused and I hope that someone will set me straight in my logic. I thought that Ag and Coal are the real kings when it comes to money makers for a RR? Intermodal gets the publicity but it is only finally started to earn its cost of capital back? I also thought I read (on this site) that coal was really the one paying the bills for the double tracking the SF and all the other expansion projects on the BNSF system to make intermodal more profitable? If this logic holds true then BN had nothing to worry about because it was heavy in coal and AG. But, SF without a money maker like coal couldn’t expand there franchise to make intermodal more profitable. Of course bad management can screw up any good, profitable company up.
I’m no expert, but it seems to me that the merger was beneficial to both roads.
It combined Santa Fe’s intermodal strength with BN’s comodities.
The route structure is interesting too.
When the two roads merged, I thought, man, there goes another route to Chicago gone.
But what really has happened is now there really is a super railroad between Chicago and Galesburg.
The only places I see where Up has the edge are in the Gulf Coast (chemicals), and maybe between Denver and the west coast.
Just my 2 cents.
Jimmt
Well if you look at the demographics LAX & the Bay area will generate far, far more traffic then the PNW. BNRR only had the PNW & the PRC + the grain mostly & now by merging with ATSF they immediately increased there base & between the 2 of them have a solid bease which to use for future growth. [:p][:)][:D]
[quote]
Originally posted by Doggy
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Interesting that this thread came up when it did. I was just yesterday looking at a Union Pacific annual report (a friend of mine likes to pass these on, along with a few others, borin
Oh, and one more thing, just to be picky, FYI…
It’s “could have”, not “could of”… common mistake, probably comes from people contracting to “could’ve”…
A couple more [2c],
Oh, boy. Another thread better left alone, resurrected.
Brew:
I will give a shot at your question…I am not an expert on railroads, the traffic they carry, nor the revenue, but I have a fuzzy idea of how it all fits in.
I believe that when the Powder River coal became a factor (in the 70’s) it literally transformed railroading. I recall reading that the revenues it generated allowed BN, UP, CNW and others to drastically improve not only their rail lines, but also their bottom lines. In other words, right place, right time.
I believe, although I cannot substantiate it, that the coal rates have come down. A comment in the UP article this year sort of alluded to that.
As far as grain goes, I would think it is rather irregular. At certain times it runs,other times it seems to slow down. It is also very capital intensive with the equipment.
Intermodal would seem to equate to growth. Without growth, corporations become very stagnant.
While I dont fully understand railroading and their economics, I do understand business (being in sales). It is critical, no make that CRITICAL to have a diverse mix of business unless you have one type of business with HUGE margins and volumes.
A diverse mix of business allows a company to not only grow but to become a better company. So, while the intermodal does not have the high margins and does require a high level of service and commitment, it not only provides double digit growth, but it forces the rails to become better operators and marketers of their products.
Looking at it another way. Had the rails not embraced the intermodal business, where would they be today? Most lines only have a few manifest (boxcar) trains these days. More and more, our economy…for better or worse …is driven by imports coming off of containerships on either coast.
I really enjoy playing “what if” with the old Official Guides and the maps. I think the Santa Fe would have been ok, simply because they would have rode the s
Frankly, considering all of the many, MANY ways in which BN (and it’s component predecessors) had been cooperating and through-routing with ATSF (including the many Voluntary Coordination Agreements) throughout many decades, I think that the creation of BNSF was only a matter of time. The only thing that would have made the mix even better would have been if ATSF hadn’t blown so many opportunities over the years to have bought the MoPac prior to UP + MoPac, when given so very many chances to do so. In fact, ATSF’s John S. Reed echoed similar thoughts when he did some press interviews about 9 or 10 years ago (from his comfortable retirement, and with 20/20 hindsight), when he said that his biggest regret was that neither he nor his two previous predecessors had been willing to come up with what they had then considered to have been a high “premium” offer for buying MoPac, since they had all severely underestimated just how extremely valuable MoPac’s chemical traffic and gateways of Laredo, Brownsville, New Orleans, Memphis, and St. Louis would eventually become with skyrocketing traffic volumes! Imagine the synergies of a BN + ATSF + MoPac!
I think one of the major failings of Burlington Northern was not aggressive acquiring other railroads. The Frisco was one thing, but just think what would have happened had they gone after WP and D&RGW. With the connection at Bieber, CA, the WP would have been a good fit, and though the D&RGW route across Colorado is highly inferior to the UP across Wyoming, today’s BNSF would be better off if they had their own route across the “Central Corridor” than mile upon endless mile of route at the mercy of the UP. BN also let the UP get the MKT, which had the best route between Kansas City and Texas. I think BNSF would be better off serving Austin and San Antonio directly than again being at the mercy of UP trackage rights, and their operating problems. Probably the only thing worse than being the UP and having their congestion is being another railroad operating over the UP and really having no say in what happens to your train as a result of their congestion.
The point about the management of the Chicago Great Western is a good one. The CGW was a fascinating railroad, and like the Milwaukee Road, did surprisingly well capturing business from other railroads. But the point about strong railroads surviving remains: When the CGW merged with C&NW, its Chicago-Omaha route was no longer used for through traffic and began being abandoned in segments in favor of the C&NW route. CGW’s line to Kansas City under C&NW lasted only until C&NW acquired the better ex-Rock Island Spine Line.
As for the “should’ve” scenario about the how there is a big gap across the Northern Tier that the UP doesn’t serve, and that they’d have done well to have acquired the Milwaukee. Why it wasn’t done in 1980 or earlier was easy to see…the traffic didn’t warrant it at the time and the Milwaukee was in sad shape, due to deferred maintenance. In addition, the route west of the Twin Cities had little CTC or double track, and a major rebuilding would have been necessary. Meanwhile the UP was well into constructing
Speaking of management what was the deal with Rob Krebs being real explosive in leading his company?