Here we go again! I just get my train magazine today did anyelse get their magazine yet? I love the topic on CONRAIL split even though i hated the conrail’s split. CSX & NS should of left conrail ALONE!
My copy arrived today.
Dave
Ours came in today,have not had a chance to get into it yet,
looking forward to doing so 'tho.[:)]
Yeah, got mine too. It’s a pretty good issue.
The money CSX and NS paid for Conrail (against the expenses) was profit the U.S. government made for us taxpayers after taking it over and bailing it out of bankruptcy.
Was there a profit? Or, did uncle Sam just recoup part of the investment?
Are we talking about the “Wreck Of The PennCentral”,or the actual Conrail ??
YES!!! We are talking about JULY trains magazine & CONRAIL’S SPLIT!!!
The magazine article pertains to Conrail. I’m asking weather the price paid for Conrail covered the investment by the government. Now, I’m from the center of the country, and don’t know too much about Conrail. Was there a seperation, of sorts, between the money invested in PennCentral, and the money invested in Conrail?
Today…
Oops, I got my wires crossed in sale details. The G sold Conrail in 1987 to private investors, who in turn later sold it to NS and CSX. But the original premise that is was profitable for US taxpayers is accurate.
In 1987, the Department of Transportation sold Conrail through a public offering, which resulted in NET proceeds to the government of $1.575 billion. The government’s goals for privatizing Conrail included providing for the long-term viability and continuation of rail service in the Northeast and Midwest, protecting the public interest in a sound rail transportation system, and, to the extent not inconsistent with these purposes, securing the maximum proceeds possible from the sale. The government met its primary goals for the sale of Conrail, in that it ensured the continuation of viable rail service, but only after spending about $8 billion creating, subsidizing, and preparing Conrail for sale.
Conrail was created in 1976 as a for-profit government corporation resulting from the consolidation of seven bankrupt railroads. The government was given an 85-percent common stock interest in the company. The other 15 percent of Conrail’s common stock was held through an employee stock ownership plan. The Congress, however, spent over $7 billion on Conrail-related activities through 1988. This included funds to purchase the properties of the bankrupt railroads, operating subsidies and capital improvements, and employee buyouts.
By the end of 1980, however, Conrail had accumulated substantial operating losses. In 1980,
cr6479 If you don’t know;I was trying to be semi-factious,read my first post,
It just came in today and I haven’t had a chance to get totally through it.
Murph; was trying to make some sort of a comparision;if you haven’t
read “The Wreck Of The Penn Central”,and the government involvement,
please do so. (We may not agree;so be it.)
Murphy Siding sorry for that i did misunderstood you. That was my falut on my part.
Boy, I don’t know why everybody feels they need to apologize. Nobody hurt my feelings. It’s not like we’re discussing wheat rates on the Milwaukee Road Pacific Coast Extention.[;)]
Conrail is an interesting subject, espescially if one is not from Conrail territory. I would like to clarify my thoughts on a few things, though:
locomutt: Until you mentioned PC, I’d about forgotten that CR came out of that mess. I have read Wreck of the PennCentral. I’ve owned the book for probably 5-6 years, and recently re-read it. It’s a good read, and border-line spooky, if you think of it with regards to Enron, and other current fiascos.
Poppa: I’m not arguing or judging, but…Is that some sort of play on words? Net proceeds to the government were $1.575 billion. Does that mean $1.575 billion went into the government coffers from the sale, after Uncle Sam put $8 billion to get it to that point? Or, did it sell for $ 9.575 billion before the $7 billion was paid back? I’m guessing it was the former. Not to say that it wasn’t neccessary. It’s just that the wording of that phrase makes it sound fairly rosy.
cr6479: I guess I’m sort of misunderstanding what you misunderstood. As a CR fan, can tell me what is it about CR that makes CR fans like Conrail as much as us westerners like about The Milwaukee Road? [:)]
Muphy Siding . CONRAIL was very friendy with rail fans than any other class 1 railroads. That’s why alot of people like or love CONRAIL. Alot of railfans in different states that conrail runs in. Will go to any CR line just to see conrail go by and wave to the engineers or conductors. That’s why CONRAIL is very very liked so much.
Yes it was a very good issue, I really enjoyed the issue.
The $1.575 billion was the net proceeds from the sale of the stock (total less selling fees), so the net cost to get CR back on its feet was about $6.5. Actually the stock proceeds were not that bad of a deal considering the jury was still out on the whether the Staggers Act would produce the expected returns.
OK, so the Conrail stockholders got an $8billion railroad for $1.5billion,and sold it to NS/CSX for $10 billion?
So as usual, the railroads make out and the taxpayer is the only one to take it in the shorts?
Jolly jolly!!
I haven’t gotten mine yet.
I got my issue on Friday and have gone through it pretty thoroughly. The article on the maneuvering that led up to the Conrail split was fascinating. I’m sure that this sort of maneuvering and negotiating is involved with any major takeover, merger or acquisition in any business.
I also enjoyed the article on working on a GTW m/w gang for the summer. It will remind anybody of summer jobs during their college days.
The write-up on Metrolink’s missteps with the second-hand F40PH’s and SD60’s is a good reminder that good intentions aren’t always enough. The whole concept sounds like a good idea except that it was too small and may have worked if they were going for an entire fleet of 20-30 locomotives instead of four. Fixed costs such as the design engineering are difficult to factor into a small order without driving the price to the customer too high.