I think YOU missed the point there spanky. Railroads have emasculated themselves with the belief that certain lines were “excess capacity”, yet they have no crystal ball in determining that those lines actually were excess in the railroad’s long term planning (which goes out on a limb in assuming they do engage in long term planning!). Why would you lop off body parts if you did not know for sure that you absolutely would not need them anymore? The cost of keeping an asset is much less than the cost of having to rebuild such an asset from scratch.
Again, I ask you, do you know of any other industry that engages
Let me offer this. When a line becomes unprofitable, (in the case of class 1’s that can mean breaking even) , they usually offer to sell or more often lease the line to a Short Line Operator or even a muniicipality. This is usually at first a short term lease with an option to extend. If the SLO is unable to make a go it will probably be abandoned due to a lack of traffic. The railroads still own many miles of track ( that they no longer operate) thou some of them are just existing hand to mouth. There is no good business model that states you should roll the dice and pay taxes on unproductive assets. Look at the brilliant investment the state of WA made in the former PCE. They are desperate for more capacity but no one has suggested they re-lay track on it.[2c]
HOUSE BILL REPORT
SSB 6527
As Passed House - Amended:
March 2, 2006
Title: An act relating to the Milwaukee Road cross-state trail.
In 1980, the Milwaukee Road railroad declared bankruptcy, sold some of its properties, and salvaged its track. In 1981, the Legislature appropriated $3.5 million to purchase 213 miles of the railroad’s right of way in eastern Washington.
The right of way owned by the state was eventually put under the management and control of three state agencies: the State Parks and Recreation Commission, the Department of Natural Resources (DNR), and the Department of Transportation (DOT).
House Bill Report - 1 - SSB 6527 During the 1995 legislative interim, the Legislative Transportation Committee convened a Freight Rail and Freight Mobility Task Force to examine the Milwaukee Road corridor’s potential for relieving freight congestion. The task force recommended resuming freight rail service over the portion of the former Milwaukee Road railroad running from Ellensburg to Lind.
Legislation in 1996 consolidated state-owned portions of the former Milwaukee Road railroad from Ellensburg to Lind into a single owner, the DOT. The DOT was charged with management and control of this corridor, and was authorized to negotiate a franchise agreement with a qualified rail carrier to operate service over the line.
The legislation creating the consolidated transportation corridor was to sunset if the DOT did not enter into a franchise agreement by July 1, 1999. Management of the trail between Ellensburg and Lind would revert back to the three state agencies. In 1999 the Legislature extended the deadline for the DOT to enter into a franchise agreement to July 1, 2006.
I think YOU missed the point there spanky. Railroads have emasculated themselves with the belief that certain lines were “excess capacity”, yet they have no crystal ball in determining that those lines actually were excess in the railroad’s long term planning (which goes out on a limb in assuming they do engage in long term planning!). Why would you lop off body parts if you did not know for sure that you absolutely would not need them anymore? The cost of keeping an asset is much less than the cost of having to rebuild such an asset from scratch.
Let me rephrase that. The state of WA would LOVE to have the additional capacity of there former PCE extension they purchased. Thats why they bought it. Who is willing to risk putting track on it. No one in over 20 years.They have been looking for a long time and they do not have to pay taxes on it. To sugjest that capital companies could afford to railbank all there dead lines is beyond ludicris. Remember this is MS’s preferred route to the NW.
Nope, you’re thinking of a few specific companies like GM or Ford, but not the aggregate industry as a whole, which continues to add assets.
GM and Ford aren’t shutting those plants to extract more pricing power, they’re rather on the losing end of the intra-industry competitive battle, e.g. losing market share to other auto makers, subsequently closing their plants while others open new ones. Toyota, Nissan, Lexus,
Nope, you’re thinking of a few specific companies like GM or Ford, but not the aggregate industry as a whole, which continues to add assets.
GM and Ford aren’t shutting those plants to extract more pricing power, they’re rather on the losing end of the intra-industry competitive battle, e.g. losing market share to other auto makers, subsequently closing their plants while others open new ones. Toyota, Nissan, Lexus,
Look through the past posts over the last few years and you would see that the insults originate with those who disagree with me. Do I respond in kind? Yes.
Well Dave, from what I have seen, YOU are the one that starts it the moment anyone disagrees with your off the wall thinking. If you want to justify yourself with that logic, go head. But the people on this board seem do think differently from your statement.
Dave,
You need to stop putting down the rest of the world as ignoramuses or you will find that the rest of the world will begin to ignore you. Since you seem to believe that you have a monopoly on the truth, a dialogue with you quickly becomes an exercise in futility. Listen to the rest of the world, you may actually learn something.