Fred Frailey - Trains Magazine - Trains News Wire, Railroad News, Railroad Industry News, Web Cams, and Forms

55

60 minutes in the life of EHH

Posted 2 years ago by Fred Frailey

“Hunter Harrison here, Michael. How are things in Jacksonville? And when are you going to come down to Plantation and see my horses? . . . Whatdaya mean, you’re pissed at me? . . . Yeah, I told the Journal about our offer to buy CSX, and yeah, I know the Journal said I offered $20 billion and you heard me offer you a lot less. Michael, this is the real world and I just wanted to apply some public pressure. But if you’ll come to the table we can get the deal to $20 billion. I ca...

25

Requiem for the Tidewater Turn

Posted 2 years ago by Fred Frailey

In the larger picture of coal’s demise as a source of electric power (and railroad tonnage), what happened this week in Northeast Texas carries little meaning. But it means a lot to me and to a circle of my friends, including Nathan Bailey. So let me explain. When I grew up in the little town of Sulphur Springs, what is now called Kansas City Southern Railway’s Greenville Subdivision, between Shreveport, La., and Dallas, was in a world of hurt. Two freight trains a day each way beca...

169

Ever feel you're being stalked?

Posted 2 years ago by Fred Frailey

That uncomfortable feeling must be going through the mind of Norfolk Southern chief executive Jim Squires. Until two weeks ago, the prevailing assumption had been that the stalker, Canadian Pacific, would mount a proxy contest to elect its directors to the NS board and thereby hasten a friendly merger between the two railroads. Then CP abruptly changed direction. In an interview with me on February 3, CP chief executive Hunter Harrison raised two issues that he claimed would keep his company fr...

109

Is Hunter too old to run NS?

Posted 2 years ago by Fred Frailey

Hunter Harrison raised the issue in an interview we did yesterday: He fears winning a proxy battle for control of Norfolk Southern’s board of directors and not being able to go there as its chief executive. You can read the Trains News Wire story here. Now that Harrison has brought the subject out of the realm of email and blog debates and fully into public view, let’s examine it. What Canadian Pacific Railway has proposed is to buy Norfolk Southern. NS directors have rejected three...

83

3 Amtrak trains in jeopardy

Posted 2 years ago by Fred Frailey

Some friends of mine in the railroad business now question the viability of CSX Transportation and Norfolk Southern as going concerns. One such person awoke the other night with brain spasms. Holy moly, he thought, veering in and out of sleep, Virginia and West Virginia in 2016 are beginning to look a lot like Pennsylvania in 1960. Back then, Pennsylvania railroading was defined by the movement of coal. Anthracite was dying, and Erie, Lackawanna, Lehigh Valley, Jersey Central, and Delaware &...

189

What would Hunter do at NS?

Posted 2 years ago by Fred Frailey

There exists on this blog a great deal of anger about and ignorance of Ma Harrison’s boy Hunter. You are entitled to your opinions—and lord knows I let you freely express them—but most of you talking the loudest don’t know jack about the man’s strengths (and are clueless about his weaknesses). The people who really know the man are those who have worked for him. They've see it all up close. I’ve spoken the past two days with three such people. I put this to t...

25

The Canadian Pacific derailment

Posted 2 years ago by Fred Frailey

Hunter Harrison and Keith Creel got a lot of attention this week during Canadian Pacific’s quarterly call with analysts. The upshot is a speculation that Calgary-based CP may be backing away from its proposal to buy Virginia-based Norfolk Southern. That may well be the case. I have never felt confident that the U.S. Surface Transportation Board will approve this merger (or any other one involving the Big Six railroads). It’s fair to say that nobody running a Class I railroad wants a...

147

The party's over

Posted 2 years ago by Fred Frailey

Jack and I left Grand Island at 6:30, fully an hour before the sun appeared behind us over the Platte River valley of Nebraska. West we went on U.S. 30, past Alda, Wood River, and Gibbon. Through Kearney, Odessa, and Elm Creek. Then Overton and Lexington. These are towns along the busiest freight train corridor in North America, maybe the world, triple-tracked for the 100 miles from Gibbon to North Platte. We saw snow-covered farm fields, herds of cattle, occasional cars and trucks. What we did ...

9

Newell Winford Derryberry

Posted 2 years ago by Fred Frailey

When I came of age in the 1960s, his was a name on the cover of Missouri Pacific timetables, that railroad’s superintendent of transportation. In the mid 1950s (preteen for me), I think we met while he was chief dispatcher of Texas & Pacific’s Western Division. Only much later in our lives, when I wrote a feature story in Trains about the revival of the Texas & Pacific route across West Texas (“Union Pacific’s Desert Bloom,” August 2002), did we finally get ...

69

4 who could run Amtrak

Posted 2 years ago by Fred Frailey

When I put out the call for your ideas on who should lead Amtrak after Joe Boardman’s retirement next September, you made me proud. Lots of good responses. But one in particular struck me. John Heffner wishes for someone of the caliber of Herb Kelliher, the legendary president of Southwest Airlines. Heffner continues: “The ideal candidate would be someone with a passion for passenger trains, a railroad operating executive who could go toe-to-toe with the host railroads when necessary...

355

A plan for Mr. Squires

Posted 2 years ago by Fred Frailey

It is becoming apparent that the chief executive of besieged Norfolk Southern wants just to wait out invader Canadian Pacific. If you clam up and do nothing, the thinking goes, CP and its leader, Hunter Harrison, will either become discouraged and go away or be soundly defeated in a shareholder vote for directors next spring. I say this because the plan Squires put forth when CP first made an offer to merge the two railroads is so feeble as to be laughable. Squires’ plan had two parts. Fir...

63

After Joe Boardman, who?

Posted 2 years ago by Fred Frailey

My first reaction upon reading Joe Boardman’s plan to retire as chief executive of Amtrak next September was that my fellow Trains columnist, Don Phillips, will need to find new topics to write about—Joe and Don were not a marriage made in heaven. Then I reread the Boardman’s statement, which ends this way: “The Board has asked me to work closely with them in the selection of the new CEO. I am confident that the time I have given the Board they can achieve the goal of sel...

94

The war of attrition

Posted 2 years ago by Fred Frailey

A lot of smart people who participate in this blog are busy hashing up the North American railroad network in the wake of the Canadian Pacific-Norfolk Southern imbroglio. I’m impressed by the logic you put forth for A+B and D+E and C+F, all as a result of CP+NS. Let me just suggest you are all premature. First there must be CP+NS. It is getting late in the day for a friendly resolution of Canadian Pacific's bid to buy Norfolk Southern. A war of attrition has begun. Both railroads seem int...

47

Demystifying Hunter Harrison

Posted 2 years ago by Fred Frailey

Hunter Harrison calls his management style “precision scheduled railroading.” But what is precision scheduled railroading, anyway? And is it customer friendly or customer unfriendly? I’m here to explain. It helps to put aside both “precision” and “scheduled.” The words are almost misleading. The central element of precision scheduled railroading is so simple almost everyone misses it: intensive use of assets. The assets of a railroad are cars, locomotiv...

40

Matt Rose: If NS goes, we're in

Posted 2 years ago by Fred Frailey

The executive chairman of BNSF Railway is fond of saying that railroad mergers don’t occur in a vacuum. Do one, says Matt Rose, and there will be another. “They always go in pairs,” he said today. With hints like this, who needs to speculate? In case you still don't get it, Rose says that if Canadian Pacific and Norfolk Southern seek regulatory approval to merge, BNSF will participate, “both in the approval process and strategically in terms of buying another railroad.&rd...

111

Jim Squires turns into toast

Posted 2 years ago by Fred Frailey

“I’ve seen this movie before,” investor and Canadian Pacific director Bill Ackman said in the middle of today’s conference call with securities analysts. So have I. The movie was “The Hunter & Bill Show” that he and Hunter Harrison podcast over the internet from Toronto in 2011, when Ackman was campaigning to replace CP management with the recently retired Harrison. Watching their performance then, I thought to myself that Fred Green, then the CEO of Canad...

76

Norfolk Southern's woeful counterattack

Posted 2 years ago by Fred Frailey

Edited 12:14 p.m. Dec. 4 Give Jim Squires a “B” and a pat on the back for trying hard. He is freshly minted as chief executive of Norfolk Southern, and I wouldn’t wish for anyone in such circumstances to be under the pressure he’s had to withstand. Today NS formally rejected Canadian Pacific’s offer to buy the Norfolk-based railroad. Squires had to defend that decision in a public presentation and then under questioning from plainly skeptical securities analysts. H...

32

Then the door opened and . . .

Posted 2 years ago by Fred Frailey

Hunter Harrison must feel frustrated. It has been almost three weeks since his company, Canadian Pacific Railway, made a formal offer to buy Norfolk Southern and forge the first true transcontinental North American railroad. In the interim, Harrison has pledged some form of open access to shippers, offered NS chief executive Jim Squires a top job at the merged company and pledged to pay NS investors immediately by putting the acquired railroad in trusteeship while the merger is adjudicated. Yet ...

33

An hour in the life of Jim Squires

Posted 2 years ago by Fred Frailey

In an office high above the streets of Norfolk, Va., a handsome, middle-aged man picks up his phone on the second ring. “Squires.” “Jim! It’s Hunter!” “Hunter, you’ve got to quit calling me. I’ve told you three times today my board wants us to keep going it alone. It’s our best option to build shareholder . . .” “Ah Jim, I am only calling because your directors don’t know all the facts.” “Like what?” ...

23

Finding Nemo

Posted 2 years ago by Fred Frailey

Today is nasty, windy and rainy. So to pass the time in western Illinois, I’m looking for Nemo. Not Pixar’s fantasy movie Nemo (I’m not that stupid), but the real one. Well, that’s not right, either. My Nemo is fictional, too. There never was a town of Nemo, because the population of the place never made it from 0 to 1. And even the physical presence of Nemo has been gone for, hmmm, about half a century. Now that I’ve confused you, go to Google Maps and type: Ormon...

46

Is this merger doable (or worth it)?

Posted 2 years ago by Fred Frailey

Will they or won’t they? More to the point, should they? They of course are Canadian Pacific and Norfolk Southern railways, reported this week to be considering a merger in which CP would buy the Virginia-based NS. CP’s traffic growth has sort of flatlined, meaning that the best way to grow may be to buy the carloads, in this instance, a whole railroad. Norfolk Southern is not in an enviable position. It’s top executives are all new to their roles, and I sense there is some dri...

39

Mr. Squires, you have a visitor

Posted 2 years ago by Fred Frailey

Well, here we go again. Just when I am trying to decide which root vegetables should adorn our Thanksgiving table, Hunter Harrison sneaks past all of us and steals Norfolk Southern! Okay, he hasn’t stolen Norfolk Southern. Or even bought it or merged with it. Yet. But this is the real thing, folks. We’ve been asleep at the switch, and Mrs. Harrison’s boy Hunter, the chief executive of Canadian Pacific, showed up with roses to give young Jim Squires, the chief exec of NS. Squir...

22

Where in the world is Fred?

Posted 2 years ago by Fred Frailey

Thank you for missing me, for the emails asking if I were sick or angry or just tired. I did not realize the abundance of your affection. When I agreed to blog several years ago, I told Trains Magazine editor Jim Wrinn I’d post something online twice a week—that is, if I had anything to say. And that explains my absence; I haven’t had anything to say. Something else got in the way. After 30 years in one place, Cathie and I decided this spring to uproot ourselves from our rambl...

116

A PTC "fix" won't be easy

Posted 2 years ago by Fred Frailey

I’ll begin with this observation: If our political system can shut down the U.S. government repeatedly, it’s altogether possible it can allow the U.S. railroad network to close up shop, too, however briefly. That said, I think rational minds will ultimately prevail and extend the deadline to install positive train control for another three years past this December 31. Just don’t bet your last buck on it, and I’m here to tell you why. As background, Congress in 2008 enact...

147

BNSF: We will shut down

Posted 2 years ago by Fred Frailey

In a candid letter to a U.S. senator, BNSF Railway’s chief executive, Carl Ice, said September 9 that BNSF would in effect shut down most of its network rather than violate a federal law mandating that positive train control be operational by December 31. CSX Transportation has said it, too, questions whether it should violate federal laws, and other Class I carriers are likely to follow suit. This set up the real possibility of a national transportation crisis at the beginning of 2016. Th...

52

Thinking the unthinkable

Posted 2 years ago by Fred Frailey

Cathie and I rode the Cape May/Lewes Ferry across Delaware Bay this weekend to attend a wedding. It’s a relaxing, 90-minute trip between Delaware and the southern tip of New Jersey. On the way back, my mind got to wandering: What a perfect setup for a terrorist! You drive your car onto the boat. Once well away from shore you take your weapons out of the trunk and there’s nothing anyone can do to stop you doing what happens next. Kind of like what could happen on a long-distance trai...

62

Who carries the coal in 2015

Posted 2 years ago by Fred Frailey

The slump in coal traffic on railroads is abating a bit, and about time. Loadings through Week 33 of 2015 (last week) showed year-to-date coal declines (versus last year) of 12 percent at CSX Transportation, 23 percent at Kansas City Southern, 17 percent at Norfolk Southern, and 16 percent at Union Pacific. Only two Class I lines showed year-to-date coal increases, BNSF Railway (up 3% ) and Canadian Pacific (up 7 percent). Still, the skid has knocked a hole in railroad revenues so big that...

55

My Hypocrite of the Year Award

Posted 2 years ago by Fred Frailey

I’ve never had a high opinion of Connecticut politicians, of either party. I have developed a particular urge to kick in the ass that state’s senior U.S. senator, Richard Blumenthal, for being a publicity hound and hypocrite. That urge began after the overturning in December 2013 of a Metro North Railroad train on a sharp curve at Spuyten Duyvil, N.Y., resulting in the death of four passengers. Blumenthal and fellow Democratic Senator Chuck Schumer (they’re known to some repor...

16

The wreck of old 54 (Part II)

Posted 2 years ago by Fred Frailey

As the two derricks picked up the wrecked locomotives and cars from the October 12, 1955, head-on collision three miles from my home in northeast Texas (go here to read the first installment of “The Wreck of Old 54”), they were loaded onto flat cars and stowed on the short siding in Sulphur Springs. That weekend, I stood beside the depot and watched as Kansas City Southern Lines GP7 locomotive 151 towed a lengthy hospital train toward Shreveport. The shoofly at the accident site was ...

16

The wreck of Old 54 (Part I)

Posted 2 years ago by Fred Frailey

(The following account is dedicated to the memory of my friend Harold K. Vollrath, a railroader's railroader who died this month at age 92. Harold, or HKV to those who saw his initials on train orders, was dispatching the L&A Division the early morning that this collision occurred but was not involved in the mystery leading up to it. To Harold fell the job of collecting information, notifying everyone and ordering out the derricks and cleanup crews.) For me, the tale begins at the breakfast...

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