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Jim McClellan, in his own words

Posted by Fred Frailey
on Monday, October 17, 2016

“Frailey? McClellan here!” Those words, spoken over a telephone every couple of weeks, were my signal to put aside whatever I was doing and indulge myself for 20 or 30 minutes in the wit and wisdom of Jim McClellan. Of this man, Rush Loving wrote in The Men Who Loved Trains: “Ambling from job to job, often by misadventure and sometimes even by getting fired, McClellan had happened into the center of every major event in the railroad industry. ‘I call myself the Forrest Gump of railroading,’ he said later ‘I happened to be there as opposed to showing up. I was part of it out of accident.’ ” He knew Brosnan (Southern Railway) and Perlman (New York Central), the twin pillars of mid-Twentieth Century railroading. He was there when Penn Central imploded, when Amtrak was created, when Conrail was formed, when Conrail was carved up, and when railroads were deregulated. So you might say Jim McClellan had the basis for a point of view.

To my mind, Jim was not a brilliant man. Maybe he was, but that’s not what made him my mentor these many years. Rather, he was concise. He could view today’s events in railroading through the prism of his many years in the business and reach conclusions that had not been obvious to me. I was forever in awe of the man. Now he is gone, in his 78th year, taken away by a fall at home from which he could not recover.

I want to offer you this memorial of the man, in his own words, culled from hundreds upon hundreds of emails. Maybe you will read what follows and understand why I will miss him so much.

September 12, 2009: My career was made up as much by luck as anything else.

March 19, 2010: I simply cannot believe that the Norfolk Southern crowd, so wedded to coal and totally hostile to intermodal as well as public funding a little over a decade ago, has come around. Credit McKinnon and Goode and now Wick for having the vision and credit some loyal, faithful visionaries in the ranks, including Tom Finkbiner and my son Michael. You know, how many folks get to hand off a strategic vision to their son? Lucky me.

March 23, 2010: Coal is the new cigarettes, something for the government to feel good about when they stamp it out.

April 8, 2010: Fred, it was a great day. Old farts telling old railroad stories and watching trains. What is better?

July 2, 2010: Technology is accelerating and wiping out lots and lots of jobs. . . I just rode an intermodal train to Chicago and mostly I saw very few people. And our train was carrying about 300 domestic boxes. So 300 over the road drivers get replaced with eight folks (four crew districts times two). . . Broader issue to be pondered: I picked an iPad last week and am blown away. Significance: I will not be buying hard copy books anymore and I suspect I will get the Wall Street Journal online, etc. Nibble, nibble, nibble, but the internet does deliver a lot of things with a minimum of physical assets and people . . . Is the new economic model based on college grads serving retirees at upscale bars or providing end of life care at the hospital? From my observation, that seems to be the model. None of this is based on any analysis but hey, Greenspan and Bernanke did analysis and missed everything. Maybe a forecast based on looking out the window and seeing if it is raining merits some consideration.

July 21, 2010: I think transportation is going to get squeezed big time. On the right, no new taxes. But on the left, do we do health care or education or the environment or transportation?

August 6, 2010: We will never have a national transportation policy and maybe all the better. I have spent some intense time with some of the best and the brightest of SNCF, and Europe and France have policies and policies. Mostly they get in the way of decision making and mean little in terms of funding. Rails are going to win in the U.S. as the highway funds are diverted to meds for Grandma, so who the hell wants a meaningless policy statement, anyway? Besides, we really do not have a national transportation system. What is needed in New York looks nothing like what is needed in Iowa.

May 9, 2013: My view of NS. Great franchise and will be valuable if they can cut costs on the coal franchise. The problem historically--been there and did that--was that the coal folks resisted any change arguing that they still made more money than any other part of the business. Classic business case; hold onto the your high margin business even as it is going away and avoid fixing your low margin business 'cause doing so is really too hard. Give Ford Motor credit for finally building small cars that are both popular and profitable. Took an outsider to make the change. Does NS need an outsider?

December 27, 2013: BC Rail was an incredible operation and way more scenic than the CN or the CP.  The climb up into the Thomson River Valley is one of the most spectacular rail routes I have ever ridden.  Better still, armed with my NS ID, I could always get a seat up front. But enough of old railroads stories. What killed all of that service was a change in the government in BC. Conservatives came into power and cut the budget. And the BC was ripe picking--every station was manned to issue train orders, etc.  A union job for everyone. 

December 27, 2013: Worst decision of my Amtrak career was to run a non-stop train from New Carrolton to NYC Penn. 2 and a half hours. Figured it would certainly be air competitive for all folks living in the northern suburbs of DC.  But it was largely empty. So much for my marketing skills. If you lose a lot of money and there are crowds of folks using the service (think BART or the DC Metro) the pols will not mess with you. 

January 6, 2014: Fred, here are my favorites from my career: Brosnan--did not get caught up in the " it can't be done" that the lawyers were pushing everywhere else. Clayton: for saving the SR from the excesses of Brosnan. Perlman: he did all he could with a weak hand. Menk: he made the decision to invest in the PRB over the reluctance of his board. Kenefick: took a pretty much moribund UP and turned it into the dominant railroad in North America. Hagen: without his skills, the industry might well be nationalized. Goode: against all odds, got NS to spend its bucks and with that, brought competition to the Northeast. Ward: gotta give the man credit for making CSX the powerhouse that it always had the potential to be. Rose:  Smartest guy in the room and look at the BNSF numbers over time. Tellier: Turned the stogy CN into a lean, mean machine and then hired Hunter. HHH: took the Tellier railroad and made it even more efficient.

January 26, 2014: I learned to game the system. Feed the NY crowd [Wall Street] my strategic vision and lo and behold, I would hear my words repeated back to NS senior management when Morgan Stanley would come down for their strategic review. Goode had heard the words before and would look at me. I did not say a thing.

May 1, 2014: I think the oil by rail stuff is in jeopardy and that may be a good thing. I’m not sure the rewards are worth the risk. After all, Chatsworth has proven to be the most expensive accident in the history of transportation (all modes) because of the cost of Positive Train Control. You cannot assume that the response [to an accident] will be related in any fashion to the actual risks.

May 3, 2014: Up early today and off to Paris. That is a place where no one deals with reality—another glass of wine does the trick. Bless the French for understanding how to cope.

June 3, 2014: I had a clear vision of the future of a railroad when, in 1960 in Easton, Wash., I came upon a Milwaukee Road roadmaster pulling weeds by hand. Asked him how much territory he had, and the answer was 110 miles. My gut told me that something profound had reached a tipping point, and of course it had. The point here is that highways are about at the same point. Younger folks would rather live downtown and older folks simply need to get to their doctor, their pharmacy or the airport. No one is really willing to pay more for roads. I do think we are at some sort of tipping point again, and that the smart transportation guys will shift more and more stuff to railroads. All of this will take a couple of decades to play out, just as it took, the Milwaukee two decades to die.

June 6, 2014: I am having a rough time dealing with the Texas Eagle [brass HO gauge trainset] I bought. The Eagle was my mom’s last trip—I was 9 and she was 29—and then we brought her body back on the same train. Lots of stuff buried inside my head, I fear. Who would think that a model train could cause so much pain, but it has.

August 22, 2014: Gave a lecture last week at Michigan State. Regarding the greens as allies: “The greens have taken far more coal off the tracks than trucks off the road.” Be careful who you think are your friends.

September 16, 2014: My profiles in courage are Menk going into the Powder River Basin over objections of his board at BN, Krebs upgrading the BNSF Transcon (again, Wall Street opposed) and Goode betting the company at NS on getting a big chunk of Conrail. There were all decisions where “find me the (short term) money” was the wrong answer.

January 19, 2015: My bias is that for all their faults, the industry could use a few more Brosnans and Harrisons today. We need to ratchet up the pace of change and the intensity if we are going to get trains running right again.

September 21, 2016: Bottom line: Be the best that you can be in your core business. Rails are not there yet.

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