Right out my back door is the Jackson and Lansing (Michigan) railroad track. They transport cars between the namesake cities and points between. On Sunday, their pair of old GP units sit parked up the track a few hundred yards. This railroad is a division or sister to the Adiran and Blissfield railroad. And that is what is painted on the locomotives.
So it occurs to me: this stretch of track is one "railroad" but really just another track of a different railroad. Why do they not just call the whole thing the A&B and be done with it. Or more formally, what business advantage is there in keeping multiple segments of a railroad as independent businesses? Obviously this happens on the large scale operations as well.
This is usually done for financial reasons - taxes, assets, etc. As for large systems, sometimes there were leases involved and stock holders, etc. Again it is mostly financial reasons. When Chessie System was formed in the late 60's, the C&O, B&O and Western Maryland kept their seperate identities until the mid-80's. The Erie absorbed the New Jersey & New York RR about 1900, but there were seperate timetables, tickets and paperwork until the mid 60's. Usually everything gets consolidated once keeping the companies seperate starts to cost more than the tax and other financial benefits of keeping them seperate.
Look at the Genesee and Wyoming system - a lot of disconnected sections, with the locos mostly painted the same (but lettered for the local operation).
I'm assuming the locomotives you mentioned are lettered for the road indicated. If not, is the name just a holdover from past times. A line here is sometimes referred to as the C&A, or Carthage and Adirondack - harking back a good many years.
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...
Perhaps they keep the companies separate for a liability firewall. Also the Lansing line is a recent spin-off of NS, and maybe they kept restrictions on the line that A&B does not want to overlap to their other line.
Sometimes loans and liens (mortgages) on the first railroad have an "after-acquired property" clause that would pull in any later acquired assets (rail lines) as additional collateral. As such, in the event of a default they could be subjected to a bankruptcy claim as well (assuming the normal state laws of seizure and sale by the sheriff, etc. don't apply).
Similarly, union contracts may extend to any other railroad acquired by the same company.
There may also be slight differences in ownership and loans that make the two railroads not quite identical enough for a merger.
- Paul North.
Paul_D_North_Jr Similarly, union contracts may extend to any other railroad acquired by the same company.
Most of the short lines owned by the large short line holding companies are usually non-union to begin with. Because each property in the family is separate, any union organizing is done on each individual railroad instead of the entire family of companies as a whole. If a union is voted in on one, it won't automatically affect the rest of the short line family.
Jeff
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