I found a 10 year old “Trains” magazine that mentioned “whispers of a proposed NS-BN merger”. We see all the time on this forum, talk of future mergers. I’ve read about the failed mergers(PennCentral), and the no-go mergers (SP-SF, UP-CRIP, BN-CN). So what are some of the 100’s (1000’s?) of mergers that were successfull? What made them work?
I can’t believe that no one has picked up the ball and run with this one…
I guess that the ability to cut out duplicity has worked for some (N&W and Southern, C&O and B&O) while the ability to extend ones reach has worked for others (Chessie and Seaboard, N&W and Nickle Plate and Wabash, Burlington and Frisco, CN and ICG) etc.
BN (CB&Q/GN/NP/SP&S) on 03/02/1970 was considered a successful merger, especially coming after the Penn Central fiasco. While it was basically a combination of the Hill Lines and their subsidiaries, improved routings and facility consolidations were also a factor.
I’m definitely not an expert, but would say that the Atlantic Coast Line - Seaboard Air Line merger in 1967 was a success. (Guessing here) Part of the reason was probably that ACL so dominated the resulting SCL it was more like a takeover. SCL ditched some significant stretches of the SAL (most of the main from Jacksonville to Savannah, and from Norlina NC to Petersburg, VA) that traversed virtual traffic deserts. There must have been a lot of yard consolidations, too, all of which saved money.
Suppose for a moment that one of the big overseas shipping outfits got into cahoots with the folks rebuilding New Orleans, in such a way they they could build a highly optimized and completely proprietary port system, and aquired control of both CN as well as KCS.
And suppose they used that unique structure to leverage business at the other major eastern ports, against the big two eastern railroads.
Thet might inspire an entertaining round of negotiations between the major roads…
The Hill lines were successfull before the merger. I know they had tried to merge several times before-for tax reasons. Would they have been allright without merging? This was a merger of convenience, not neccesity wasn’t it?
I’m curious. What’s your basis for this belief? Or perhaps more usefully, what is your criteria for the word “successful”?
Best regards, Michael Sol
Scary
I think that something like this is more likely to happen than a direct merger between any of the remaining class ones, at least for the time being.
I wonder with the way RailAmerica has accumulated trackage rights all over the place in conjunction with the shortline operations it has taken off the class 1’s hands, exactly how someone with deep pockets and the ability to originate gobs of traffic could put those rights to effective use?
A P&O Nedlloyd + CN+ RailAmerica combination with a “tremendous gesture towards the rebuilding of the city of New Orleans” to lubricate the deal might be a powerhouse that CSX and NS could find difficult to cope with.
I would say the Norfolk Western merger with Virginian was successful. Ditto the NW merger with NKP with lease of Wabash. Ditto the NW/Southern.
In both mergers, NW was able to piece together important segments of their system by purchasing lines from others…the Columbus Bellevue line in 1964 and the New Castle line in 1982.
In both instances they “jumped the Ohio River” which at those times was a pretty big jump.
More importantly, NW’s ability to walk away from potentially nasty mergers should be analyzed as well. Lets not forget, NW did not enter the Northeast until all the dust had settled…having passed on EL, D&H (DERECO).
Looking at how NS has evolved vs the CSX family leads one to think they knew what they were doing in Roanoke.
ed
That is a facet of the transportation jewell I had not thought about. It is similar to the dreams of J.P. Morgan early in the previous century of a scheduled shipping and rail combination of companies operating in a co-ordinated and efficient way on water and by rail. Anti trust motion however might be in the offing should this get serious or NS would probably move quickly in either a hostile or friendly fashion on the KCS, let New Orleans do its own thing and NS makes a gob of money on line haul from Larado and beyond to New York or Chicago and Dallas to Atlanta and beyond. Even Morgan or Harriman would enjoy that hookup
I think in these modern times its safe to say that none of these railroads would still be around even if not for the original mergers. The days of multiple railroads is over and inevitably they all would be part of a bigger system anyway. Even if they were successful,which seems to mean that you will be taken over, as proven by Wisconsin Central and more so by Conrail.
. . . and in Atlanta/Washington (Central of Georgia, S&A, Florida Northern, etc) not bad either.
What makes this “safe to say”?
Best regards, Michael Sol
Mike, sounds like you know the same beast that I know. I almost always take matters with a grain of salt when I hear those 3 words “these modern times.” or especially the three “safe to say.” Be good - PL
I"M just going by what I’ve read in books about railroads. The Hill lines didn’t seem to be having obvious financial problems, like RI, NH, or NYC. Perhaps, that isn’t a clear picture of the situation?
There is clearly a “public relations” view out there. However, if you look at the Hill Lines, actual numbers, operating ratios, maintenance figures, trend lines, and speak with members of the BN “survey team” about the condition of some of the big mainlines, particularly on the Q, post-merger, it is much, much more obvious as to why GN’s John Budd characterized the merger as “crucial”.
Then look at the BN operating ratios just before the Frisco merger.
Were they any good? Evidence that the BN merger was successful? Was the Frisco merger essential to saving the BN merger from the ashcan of history?
“Books on railroads” are an interestng species from the standpoint of a professional historian no doubt.
Best regards, Michael Sol
PL:
I agree with you regarding Southern, but I dont think of them as being active in the merger field. I look at their map in 1941 and compare it to 1980 and the maps are very similar.
I dont know much on the history of Southern, but it appears most of the system was in place early on.
One must stop and wonder what would have been with a Southern - Missouri Pacific merger would have occured. With gateways crossed at New Orleans, Memphis and St. Louis and entry into Chicago via the old C&EI, it would have changed the complexion of railroading.
ed
MichaelSol: I’m just asking, based on what I read. Don’t a lot of railroad historians write books? Please interpret the graphs for me. I’m not 100% sure what you’re trying to say.
Thanks
Not many. The graphs show progressively poorer operating results. In those days, 85% was about where a railroad had to consider that it was going to fail, unless there was a definitive strategy to change the trend.
Best regards, Michael Sol