An alarming indication for rails...

[Modelcar]

...Mark Hemphill's column in January's TRAINS, page 4...has alarming projections for the future and well being of our rail network and upcoming success. Among other facts indicated in the article the railroad industry is not generating enough capital to sustain itself for the long term.

Physical plant is in excellent shape now, but moving forward the revenue incoming will not be able to maintain such. Auto assembly plants moving closer to customer population, trackage capacity shrinking and tonnage growing, Manufacturing evaporating in this country, and those loads being replaced by lower margin containers and so on....[:(]

What are our thoughts on this potential development...

[jchnhtfd]

Goes back to the dismal way in which our governments -- at all levels -- treat the railroads. So long as there is an overwhelming disparity between the immense public subsidy for highways and air transport and the immense public tax bite on railroad property, we're in trouble.

Good luck...

[Anonymous]

This isn't anything particularly new. Railroads have not earned their cost of capital (a "capitol" is a seat of government, not a type of financing) for a long time. Just check out the STB's monitoring of the railroads ability to earn the cost of capital year to year and you'll find that even most Class 1s don't make it.

There is a crying need for both government assistance and increased rates. I think both are coming as trucking costs increase due to new hours of service regulations and a continuing driver shortage plus a continuing shakeout of the weaker trucking firms. On the government funding side, bills like H.R. 876 and the new ARRIVE-21 legislation promise new sources of grants for railroads. Also, still on the scene is the limping RRIF loan program undergoing a facelift at FRA. States are still doing what they can in many cases although the costs of new security and other post 9/11 costs are drying up some of this funding.

Please support the rail friendly legislation as grass roots can get things done.

LC

[Anonymous]

QUOTE: Originally posted by Modelcar

...Mark Hemphill's column in January's TRAINS, page 4...has alarming projections for the future and well being of our rail network and upcoming success. Among other facts indicated in the article the railroad industry is not generating enough capitol to sustain itself for the long term.

Physical plant is in excellent shape now, but moving forward the revenue incoming will not be able to maintain such. Auto assembly plants moving closer to customer population, trackage capacity shrinking and tonnage growing, Manufacturing evaporating in this country, and those loads being replaced by lower margin containers and so on....[:(]

What are our thoughts on this potential development...

My thoughts? Mr Hemphill is an excellant "caldron stirrer". Very knowledgable, well informed, and personally insightful (inciteful?[:)] ) but in the same spirit as the much famed "Doomesday economists" a numberof items outside the "cauldron" would have to fall into place like magic for the worst case scenario to eventualize.

The buying public is too fickel for much of a threat to solidify. As soon as someone like SAAB decided to build a plant in Arizona, their brand would enjoy a surge of popularity in Florida, or the Northeast,..etc etc.

[Modelcar]

....For the "picky"...I stand corrected at "capital"...
As for none of this being a threat....I grew up in an area where the steel mills employed over 25,000 and now it may be 2000....That sure is one example of there being less product to haul and favorable rates.

[Anonymous]

QUOTE: Originally posted by Modelcar

....For the "picky"...I stand corrected at "capital"...
As for none of this being a threat....I grew up in an area where the steel mills employed over 25,000 and now it may be 2000....That sure is one example of there being less product to haul and favorable rates.

Well, did you see today where our ever loving prez today cancelled a whole rack of import tariffs on steel? Seems ome of our euro pals were threatening a trade war if he didn't, the outcome of which would have impacted California and other info tech exporter states the worst, so clearly "W" is happy to trade favor to gain the approval of Intel and the like, even if it costs him Pennsylvania in return,

Bush is wizzing up a rope if he thinks he's gonna carry California after letting them hang during the energy crunch, he's a walking political liability in that state.

My earlier observation was geared more towards the railroads will get a haulno matter what, even if all the manufacturing jobs end up going to Mexico

[Modelcar]

.....I wholeheartedly agree on all the Bushism's you list. On the part of the railroads losing business I have been mentioning...In the Pennsylvania area...so much steel and coal business loss just to mention 2 industries, have been massive. And so much more seems to be occuring now with more and more of our Companies going over seas to do their manufacturing.

[Anonymous]

QUOTE: Originally posted by Modelcar

.....I wholeheartedly agree on all the Bushism's you list. On the part of the railroads losing business I have been mentioning...In the Pennsylvania area...so much steel and coal business loss just to mention 2 industries, have been massive. And so much more seems to be occuring now with more and more of our Companies going over seas to do their manufacturing.

I cannot argue with you on the loss of jobs It's a sham (and a shame too) the way Government has been allowing jobs to be "exported" to developing nations, for low wage rates, simply to allow big business (and their sit on their *** all day and contribute nothing to the productive work flow stockholders) to further deprive the working stiff the promise of the American Dream....Used to be the government accepted responsibility to create jobs for the citizens, not "doink" them out of them,..sad really. I think Ross Perot said it best: "That big hissing noise you will hear will be jobs leaving the country"....(*sigh*)

[millerdc]

When the government has the ultimate responsiblity for creating jobs that is called socialism.

[Modelcar]

...Perhaps creating the conditions that allows jobs to florish is a better way of saying it...

[Anonymous]

QUOTE: Originally posted by millerdc

When the government has the ultimate responsiblity for creating jobs that is called socialism.

You are correct. However there is a lotta grey in there, as far as rewarding companies that create jobs with incentive packages, versus clearing the deck for industry to stiff the domestic worker in ways few other nations even come close to permitting.

http://www.amazon.com/exec/obidos/tg/detail/-/0380720450/002-1494377-2573650?v=glance

[Modelcar]

...AntiGates: Don't forget Ross's giant sucking sound too...

[Anonymous]

QUOTE: Originally posted by Modelcar

...AntiGates: Don't forget Ross's giant sucking sound too...

I stand corrected[:I] "suck" it was[;)]

[Modelcar]

....If we're ever going to hear it...now should be the time because it sure is happening.

[brilondon]

The railroads have always found a way to improve. My thoughts go back to the seventies when the same questions about the survival of the railway and its physical plants were crumbling and the railways were losing money. I believe that they have already started to get the trains in shape when you consider the building of the Global III facility in Chicago; the large investment in locomotives during past ten years shows that the railroads have made an attempt to improve their bottom line by reducing their maintenance costs and ruducing the number of employees needed to run the railroads. The biggest detrement to cost savings though is the STB in that they still have final say on the competition and where the railways run their trains.