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Railroads Struggle to Deliver Coal to Utilities

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Bert, as a native of Western PA, I have seen the impact of the decline of the domestic steel industry. I agree that the steel industry had a "canabalistic attitude toward its hard assets." However, life is a little more complicated than FM realizes. Although the major, vertically-integrated steel producers began closing mills in the late 1970s and early 80s, and several major manufacturers have since disappeared, the American steel industry today, thanks to technology, is much more productive and efficient than it was in steel's heydey. There is also more competition from non-union mini-mills and foreign producers as well as from alternative materials, e.g., aluminum. These factors would have compelled the closure of obsolete open hearths and blast furnaces that were no longer required. Obviously, the wage, health care and pension liabilities Detroit is now confronting were experienced by Big Steel. Some steel companies survived and prospered, some didn't, and, meanwhile, significant consolidation of the steel industry, domestically and globally, has occured and is ocurring. Could US Steel have cold banked the blast furnaces at Duquesne, the open hearths at Homestead, in anticipation of a future demand? Of course, but it would not have made fiscal or strategic sense at the time to do so, a point Dave, aka Future Modal, doesn't seem to grasp about the RR industry. But had US Steel done so, in 2006 it would have had assets it could not afford and capacity it doesn't need. Dave [quote]QUOTE: Originally posted by n012944 [quote]QUOTE: Originally posted by futuremodal [ Many other industries will maintain "unused" assets for long periods of time, because they understand the cyclical nature of business. Apparently, railroads do not understand this basic business tenet. You see, if you scrap an asset, you don't have that asset later on when you need it. Now that the nation's energy and other transportation needs are such that abandoned lines would be put into play right now, it shows a lack of foresight (or a complete lack of concern) by the shortsighted railroad industry. Don't these guys follow economic trends? Or did they think that the US was destined for a Soviet-style command economy, so why save assets if the railroads are going to be taken over by the federales? [/quote] [/quote] Again, I will ask you this: Can you name any other industry besides the rail industry that has engaged in such a canabalistic attitude toward it's hard assets? [/quote] 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, et al are not lopping off assets, are they? [/quote] . Since you wanted examples how about the steel industry? They have gotten rid of a lot of capacity since the 1950's, was that a monopoly conspiracy too? I look foward to the spin that you put on this. Bert [/quote] I am still waiting for your spin on the steel industry. Bert [/quote] Bert, are you a glutton for punishment? Do I really have to point out the illogic in your auto industry analogy? Yes or no, let me know and we'll go from there. And I don't want anyone else piping in and claiming I'm being rude or insulting if Bert avers to carry this one further, okay? (That means you, Murph![:0]) [/quote] So what your saying is that if I dare ask you for your spin on the steel industry, that gives you the right to insult me? Dave, YOU asked for any other industry that has gotten rid of its assets like the railroad. I have given you two, the auto industry, as there are less auto plants in the US than there were 50 years ago, and the steel industry. Now if the only reason that you have not responded is because you are incapable without insulting me, good, keep your mouth shut then, however if you have a response, and can make a point without name calling, I look foward to it. Bert [/quote]
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