Back to CP-NS, EHH's statement at the JP Morgan Conference Last week:
"People need to get their heads around the idea that fossil fuels are “probably dead,” the CEO of Canadian Pacific Railway said Wednesday.
It is another very effective strategy to try to influence shareholders to vote for CP-EHH to save the company from impending doom. The underlying unspoken connotation seems to be "NS - you guys are toast because you have depended on coal and that is a dead horse. You need me to come in and run this place because you only know how to do coal and that's not going to be there anymore and you can't save the sinking ship, but I can."
The fact of the matter is the US Government is working hard to make coal extinct. Impossible-to-achieve emissions regulations shutting down hundreds and hundreds of power plants, and also making it economically unfeasible to build a new coal plant, plus a recent "moratorium" announced on any future coal leases on Federal Lands in Western States are examples of the policy of the US Government to regulate coal mining out of existence over the next several decades.
Of course, one can make the economic argument regarding natural gas fracking impacting coal, but while that would and has resulted in less coal use, by itself it would not put the coal industry out of business.
And natural gas fracking is not a "safe" technology from existential regulations, either - it, too, is in the gunsights of the EPA but most of the regulatory fire right now is being trained on the coal industry at this time, with devastating results to many states and tens of thousands of families
So EHH is very astute in trying to use that policy to his advantage in the CP-NS skirmish for control.
Maybe, as mentioned by others, he will bleed the assets as coal mining in the US is regulated to extinction, or maybe he will sell the branchline assets and coal export terminal to a shortline, single track the NW and redeploy the rail elsewhere, grab his gain on the coal assets, and focus on other areas to bring that Operating Ratio down.
But it is quite the play for approval of his resolution by NS sharesholders, and it just might succeed.
zugmann Euclid That is entirely at odds with the current “play nice” post which says that certain railroad discussion must be banned if it happens to naturally include something political. So which way is it? I would say that the most recent bulletin takes precedence.
Euclid That is entirely at odds with the current “play nice” post which says that certain railroad discussion must be banned if it happens to naturally include something political. So which way is it?
I would say that the most recent bulletin takes precedence.
I would say that it is a lap order.
Thanks to Chris / CopCarSS for my avatar.
EuclidThat is entirely at odds with the current “play nice” post which says that certain railroad discussion must be banned if it happens to naturally include something political. So which way is it?
The opinions expressed here represent my own and not those of my employer, any other railroad, company, or person.
BaltACD schlimm Frailey has his own blog as an employee of Kalmbach. This is a Kalmbach forum with clear rules for posters. Not a double-standard at all. You may not like the rules but they are there for a good reason, IMO. Double standard indeed - let the employees rouse up the rabble and then prevent the rabble from responding under the shield of TOS. Analogus to presidential stump tactics.
schlimm Frailey has his own blog as an employee of Kalmbach. This is a Kalmbach forum with clear rules for posters. Not a double-standard at all. You may not like the rules but they are there for a good reason, IMO.
Double standard indeed - let the employees rouse up the rabble and then prevent the rabble from responding under the shield of TOS. Analogus to presidential stump tactics.
Apples and oranges. The "rabble" as you so condesendingly refer to Frailey's readers, are perfectly free to respond as they wish on Frailey's blog, as many do, including some folks on the forums. Did you not know that? And how is your contention analogous to anything?
C&NW, CA&E, MILW, CGW and IC fan
Never too old to have a happy childhood!
Norm48327 schlimm I will simply post the "Play nice" rule set down by moderator Brian, which seems to apply: "We also will no longer tolerate discussions of socialism vs. capitalism, political parties, or elections. They seem to be the root of most of these problems. If this means that some rail topics are off-limits, so be it." Schlimm, Have you read Fred Frailey's most recent blog? Appears to be a double standard here. Fred get political? Hmmmmmmmmm.
schlimm I will simply post the "Play nice" rule set down by moderator Brian, which seems to apply: "We also will no longer tolerate discussions of socialism vs. capitalism, political parties, or elections. They seem to be the root of most of these problems. If this means that some rail topics are off-limits, so be it."
Schlimm,
Have you read Fred Frailey's most recent blog? Appears to be a double standard here. Fred get political? Hmmmmmmmmm.
schlimm "Play nice"
BaltACD...shrinking companies do not increase shareholder value.
But they might increase my dividend, and maybe make my stock go up a bit so I can sell it at a profit...
Larry Resident Microferroequinologist (at least at my house) Everyone goes home; Safety begins with you My Opinion. Standard Disclaimers Apply. No Expiration Date Come ride the rails with me! There's one thing about humility - the moment you think you've got it, you've lost it...
schlimmI will simply post the "Play nice" rule set down by moderator Brian, which seems to apply: "We also will no longer tolerate discussions of socialism vs. capitalism, political parties, or elections. They seem to be the root of most of these problems. If this means that some rail topics are off-limits, so be it."
Norm
I too would not assume that coal is dead. The policy to kill it was a radical one, and it could just as radically be undone. Miningman makes a good point. Unfolding events could well lead to an instant reversal of the war on coal.
Has always amazed me how CEO's that cut thousands of jobs within their companies are called heros by the shareholders and rewarded with outsized bonuses - instead of being characterized as the abject failures that they actually are.
CEO's that can't develop business to keep their entire workforce busy and economically productive are FAILURES and should be recognized as such. They are failures to both the work force and the shareholders, shrinking companies do not increase shareholder value.
kgbw49With fossil fuels dead per EHH all the coal branch lines are gone when CP takes over. That will be his first $500 million in excess assets sales.
I think rumors of coal's death are a bit exagerated. It's not really dead, just "dead man walking". The RRs can play out coal's demise by using up the assets they own supporting it.
That means keeping just enought hoppers patched up and in service.
It means trimming the route structure as volumes decline and mines and power plants close.
It means eliminating capital work on branches and lines that are soley in the coal network. No tie gangs. No rail gangs. Just enough time and material to keep it running at all.
You most certainly can make money from an obsolete product on the way out.
-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/)
MiningmanYour Presidential election will be crucial to the future of coal. If the Democrats win then coal will continue on its path to extinction. If the Republicans win, especially Mr. Trump,
I will simply post the "Play nice" rule set down by moderator Brian, which seems to apply:
"We also will no longer tolerate discussions of socialism vs. capitalism, political parties, or elections. They seem to be the root of most of these problems. If this means that some rail topics are off-limits, so be it."
Your Presidential election will be crucial to the future of coal. If the Democrats win then coal will continue on its path to extinction. If the Republicans win, especially Mr. Trump, then there will be a resurgence, even serious support for coal domestically. Regardless EHH would likely spin off all those branch lines and be done with it. This merger won't happen anyway but a merger movement could be awakened and the landscape changed substantially soon. Inland ports, intermodal, big super container ships, enlargened Panama Canal, perhaps a distribution centre for these ships set up away from the US ( i.e. Kingston,Jamaica) all factors. Buckle your seat belts.
With fossil fuels dead per EHH all the coal branch lines are gone when CP takes over. That will be his first $500 million in excess assets sales.
Ironically, there are still hundreds and hundreds of coal plants being planned across Asia from India to China as they try to lift their people out of poverty. So export coal will eventually come back. But with the US Government's war on coal being waged in the US and regulating coal mining and usage out of existence in the US, it may be a moot point.
“I’m not maybe as green as I should be, but I happen to think the climate is changing (and) they’re not going to fool me anymore,” Hunter Harrison told a J.P. Morgan transportation conference in New York."
http://calgaryherald.com/business/local-business/fossil-fuels-are-probably-dead-says-canadian-pacific-railway-ceo-hunter-harrison
Will a merger with Candian Pacific save the coal carrying Norfolk Southern from going the way of the dinosaurs? The clock is ticking.
"The motion calls for shareholders to request Norfolk’s board to engage in discussions with Canadian Pacific that wouldn’t preclude discussions with other parties.
“This is kind of our last effort, the last thing we know to do and we hope it will work,” Harrison said. “And if not, we are going to go back in and run our railroad.”
Electroliner 1935, CSX still shows the ex B&O as a full route on the route map on their Web site. Then again, maybe that web page has not been updated. I could understand them downgrading it because of the somewhat parallel Big Four. If it is severed, or even downgraded, I suppose Louisville traffic from the west through St. Louis could head to Indy on the Big Four and then down the CSX-L&I shared trackage to Louisville.
I could see them having to spin the B&O off to CN for competitive access to Louisville and Cincinnati as well as giving CN trackage rights from Chicago and Detroit to Atlanta and also from Buffalo to the NY/NJ area to meet the improved competition criteria.
kgbw493. Former B&O heading due east as the crow flies out of St. Louis (connection with the former Frisco) to Louisville and Cincinnati.
This route is no longer a through route. CSX has severed it as I understand.
So, even if CP could win, and merge NS, would all these shippers then bolt to CSX?
CP would have already lost most of NS coal, and, if these shippers bolt, they would also lose UPS, FedEx, Ford, GM, and how many others?
That would leave them with..... Coal.
And Oil. (Which has its own issues with protesters and declining movements due to lower prices...)
And CP will make money on this how??? Spend millions on the buyout, spend millions more through the legal aspects/battle, then lose all the good paying shippers, thereby losing millions of dollars.
So, we peace meal the lines off, scrap others, thereby making a few hundred thousand.
Yep.... Makes perfect business sense too me. (Fits right in with all the other "genius" business moguls, who no longer have a business to run.)
Ricky W.
HO scale Proto-freelancer.
My Railroad rules:
1: It's my railroad, my rules.
2: It's for having fun and enjoyment.
3: Any objections, consult above rules.
Actually, if one looks at the CSX map and the way it would "bolt-on" (to borrow a phrase from Mr. Buffett) to the BNSF route structure, it might be the superior route partner for BNSF for the following reasons:
1. Ex-Baltimore and Ohio double track route to Ohio tieing in to the ex-NYC Water level route from Cleveland to Selkirk and down the River line to NYC is tailor-made for ET44C4-ES44C4 motive power.
2. Former Big Four heading northeast as the crow flies out of St. Louis (connection with the former Frisco) to Indianapolis and Cleveland is an excellent bypass of Chicago.
3. Former B&O heading due east as the crow flies out of St. Louis (connection with the former Frisco) to Louisville and Cincinnati.
4. Former Dixie Line from Memphis (connection with former Frisco) to Nashville.
5. CSX mainline from Birmingham to Atlanta, Charlotte and Richmond is an extension of BNSF intermodal haulage rights from Birmingham to Atlanta.
6. CSX mainline from New Orleans to Birmingham would be a "cut off" for BNSF chemical traffic out of Louisiana bound for the northeast.
And all those lines are, again, pretty much tailor-made for ET44C4-ES44C4 motive power.
It will be interesting to see if Michael Ward ends up with an appointment with Mr. Buffett over the next three years.
Well, I see the list of shippers opposing the merger just got longer
Convicted One The real point being, if the other class ones can make it painful enough, perhaps HH will just pick up his toys and go home mad?
The real point being, if the other class ones can make it painful enough, perhaps HH will just pick up his toys and go home mad?
HH is Ackmans puppet!
The other class 1s will no doubt extract concessions (divesture) from a CP/NS conglomeration, so perhaps it's not premature to speculate what those concessions might be?
I doubt they would be allowed to keep both routes between Chicago and Buffalo, so I'd guess that BNSF would want the former Nickel Plate, and I've heard for years that they would like to obtain the former Wabash as well, so why not go for both? I can see where UP might want the former Southern RR east from New Orleans, and likely others. Speculations?
kgbw49He will go for Genessee & Wyoming so he can cobble together the former Pennsy, the former DT&I, and make a hostile take over of Wheeling & Lake Erie so he can reroute all the traffic from Cincinnati, Columbus, Cleveland and Pittsburgh to Canada via Detroit so he can relieve congestion in Chicago. And he will pull all those two-mile long trains with mu'ed SW1500s and GP9s.
Almost put the "Big Four" back together, too . . .
"The Cleveland, Cincinnati, Chicago and St. Louis Railway, also known as the Big Four Railroad . . . " https://en.wikipedia.org/wiki/Cleveland,_Cincinnati,_Chicago_and_St._Louis_Railway
- Paul North.
​Canadian Pacific (TSX:CP) (NYSE:CP) today announced that it has petitioned the U.S. Surface Transportation Board (STB) for a declaratory order confirming the viability of the voting trust structure CP has suggested as part of its proposed merger with Norfolk Southern Corp. (NS).
"Shareholders of both CP and NS have asked that we seek this declaratory order as a means to better understand the STB's views on the proposed voting trust model ahead of any formal application and we have listened to the owners of our respective companies," said E. Hunter Harrison, CP's Chief Executive Officer.
"Since we remain convinced that productive discussions about the potential structure and value of a formal bid must take place face to face we hope this show of good faith is met with an equal demonstration on the part of NS," said Harrison.
http://www.cpr.ca/en/investors/canadian-pacific-petitions-us-surface-transportation-board-for-declaratory-order
Never thought of that, it would be smart.
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