Nearly 40 years ago Santa Fe and Southern Pacific attempted to merge but were shot down by the then ICC regulators. Will UP-NS be another SPSF? Will UP’s CEO Vena end up fired and go howling like the Santa Fe Pacific CEO was? The fierce opposition to UP-NS makes one wonder …
One big difference between then and now is that track was put in place in anticipation of merger approval. Managements seem a lot wiser now.
Or another Penn Central?
PC? Likely not as both lines are in better physical and financial shape.
One of the concerns of PC and why Congress got involved was the pension funds that had money at risk via PC. Also, the fact a lot of the Northeast railroads around it were in serious financial trouble as well (domino theory revisited).
In my view it would have been a lot easier for this country to fix it’s industrial policy back then vs. putting band aids on the various symptoms. I think we are probably paying the hefty price now for being too generous with other countries that were never friendly to us and leaving the industrial policy to the markets entirely…all based on a hope that never materialized.
I don’t know if Santa Fe was really unhappy back then. Southern Pacific emerged from the failed merger as a completely impoverished railroad company, since SF was able to retain all of SP’s assets, such as real estate and land, when SFSP was split up.
SF had become richer and SP even poorer, making it even more of a takeover candidate.
I hope that the two railways have really learned from this and are waiting for the authorities’ decisions.
Regards, Volker
I see more trouble if BNSF and CSX try for merger because CSX management is more headstrong than BNSF’s is. Is hardheaded a better term? 
Since CSX changed the head of its management only a little over a month ago - its Management track record is yet to be defined.
I don’t think that’s an issue at the moment, as BNSF isn’t interested.
While that maybe true…
SP’s route on the map wasn’t all that great and in my view it’s management wasn’t very good at innovation or marketing. SF had far better management and probably the best and fastest Chicago to LA rail route…far superior to SP…better than UP Chicago to LA.
UP had a decent marketing department in the 1990’s. I have no idea about today. It’s been a while since I have seen anything really innovative or market savvy from UP.
This merger looks to me like a two obstinate railroad management cultures trying to make a quick and easy score. I don’t think is the best move for either company though it might be the easiest.
Chuck, accoeding to my read of TRAINS, seems former CEO did great things. Why the change? One word, Ancora. Ancora = short term thinking = PROFITS. I will admit the new CEO has an outstanding resume, but as he surely is close to his last CEO jig. Will he have backbone to buck the Ancora game plan. His former companies did not have the same type operations as RR’s mike endmrw1102250950
In ~1960:
City of LA schedule was 40.5 hours.
Super Chief 39.5 hours.
Golden State 45 hours
Even with opposition growing, there’s heavy political influences at work.
Here’s from firecrown’s own reporting:
I posted a similar post earlier but a member flagged it as political (and possibly as trolling no less. He should check the definition.)!
For Firecrown to delete an article from Firecrown?
That’d be some next level stuff.
PC and SPSF were mergers of parallel lines which hope to eliminate duplication. The UP-NS merger is an end-to-end merger meant to eliminate interchange choke points.
Former CSX CEO Joe Hinrichs, who was ousted from the company in late September, has repudiated a published report claiming that Union Pacific Railroad (UP) reached out to him earlier this year on a possible acquisition before UP hooked up with Norfolk Southern Railway (NS).
Hinrichs’ remarks, which came in response to a LinkedIn post Thursday by a Journal of Commerce editor, follow an Oct. 21 report in online news publication Semafor stating that CSX’s board of directors was displeased that UP CEO Jim Vena allegedly contacted Hinrichs first about a potential UP-CSX combination and only turned to Norfolk Southern.
Outside of CHI-LA and its Central Corridor route… SP had the best SoCal-Texas Route, including connecting to Southeast roads (A CSX SP merger would have been phenomenal), it had better connections to Phoenix, served fast growing Tuscon, it also had access to Mexican gateways at Calexico, Nogales, El Paso, Eagle Pass, Pharr-Mc Allen. Not to mention it had the best route into the LA Basin, versus Cajon Pass. SP was in the heart of the vast Gulf Coast Petrochemical complex. SP had massive carload opportunities and spearheaded double-stack container development..
Santa Fe while a well run road for the most part, lacked much of the above, including a seriously weak carload franchise, so it was a no-brainer ATSF, had no choice but to eventually develop a strong intermodal franchise via the JB Hunt Quantum Agreement.
In reality the fix should have been to deregulate the railroads then and there when the PC went bankrupt. Instead it took Congress another decade of more railroad decline and partial nationalization in Conrail to realize the real culprit all along was the Interstate Commerce Commission.
You need to remember something about the 60s and 70s about the people in charge of government and writing the regulations that had to be followed. Most of them were children of the great depression which followed the roaring 20s. Then throw into it the malaise factor of the mid 70s with super high inflation and interest rates. My own parents celebrated getting a mortgage for 18 percent in 77. My grandparents were getting 20 percent interest rates on long term CDs at their bank. Yeah things were that bad in the USA. My grandmother sold half her bean crop in 79 on contract after delivery bought 100k in 20 year CDs at 21 percent compounding interest.
No.
The average 30-year fixed mortgage rate in 1977 was approximately 8.85%, FHA lower, though rates could vary by month and lender, highest was 9.02%.
Some other members might be able to check on the claim of a 21% CD interest rate. It also seems exaggeratedly high.