I'd be interested in the thoughts of the forum regarding the possible future of these track segments in a "CSH" world:
B&O between Seymour IN and St. Louis, MO
B&O west of Cumberland MD through WV
Clinchfield
All coal branches in KY, VA or WV
Mobile AL to Tallahassee FL
Atlanta GA to Augusta GA
C & O from Cincinnati OH to Newport News VA
Are these on the list for spin off or abandonment?
Are there other track segments that you think may become "CS-ex" or lowered to Class II speeds?
Thank you for any thoughts!
HH will take the reigns of CSX, no doubts. Will he pursue a merger with CP in due time? Of course. I liked RME's suggestion of Super C's so it's Super C's here we come. We will be down to 2 coast to coast international railroad systems in ten years and lots of little guys feeding in to them. Thats it, can't be stopped now.
This article is in the Wall Street Journal for January 30:
http://www.wsj.com/articles/csx-rail-veteran-in-settlement-talks-1485735855
I am a subscriber so I don't know if it is behind the pay wall or not and apologize if it is and you can't read it.
MidlandMike kgbw49 ... Then, in regards to CSX, I know they operate double track from Chicago through Greenwich, OH to Cleveland and thence Selkirk, NY, and I believe the former B&O from Greenwhich, OH through Akron, Pittsburgh and over Sand Patch to Baltimore is also double track. Does the forum feel like any of those segments would be reduced to single track? ... I railfanned some of the ex-P&LE line that CSX now uses on that line, and it is single track (down from 4 track in the P&LE classic era). Since the CSX west of Greenwich was single tracked prior to the Conrail split, I presume most of that ex-B&O line east of Greenwich was single track also.
kgbw49 ... Then, in regards to CSX, I know they operate double track from Chicago through Greenwich, OH to Cleveland and thence Selkirk, NY, and I believe the former B&O from Greenwhich, OH through Akron, Pittsburgh and over Sand Patch to Baltimore is also double track. Does the forum feel like any of those segments would be reduced to single track? ...
...
Then, in regards to CSX, I know they operate double track from Chicago through Greenwich, OH to Cleveland and thence Selkirk, NY, and I believe the former B&O from Greenwhich, OH through Akron, Pittsburgh and over Sand Patch to Baltimore is also double track. Does the forum feel like any of those segments would be reduced to single track?
I railfanned some of the ex-P&LE line that CSX now uses on that line, and it is single track (down from 4 track in the P&LE classic era). Since the CSX west of Greenwich was single tracked prior to the Conrail split, I presume most of that ex-B&O line east of Greenwich was single track also.
Greenwich to New Castle is double track (with a lot of D251-252 current of traffic signalling) except for a 10 to 12 mile segment between Warwick and Lambert.
Never too old to have a happy childhood!
samfp1943The line ran from basicly the Leawood Yard area lasted into the current century; it stub-ended at a location known as LENOW, where there had been a some industrial activities.
Perhaps a better way to express this is that this part of the ex-NC&StL ran from the 'connection' with the IC freight line (roughly where Walnut Grove Road ends) east to the Lenow ROAD area in Cordova, where TVA has a considerable substation (the last item transported on the line before it was abandoned was a large transformer; I suspect the ability to move large electrical components was a major part of the reason this line was maintained as long as it was).
The line west of the 'IC connection' was largely abandoned; it notably crossed a major intersection (Central and East Parkway) from corner to corner on an overhead bridge (!) - it is now almost impossible to imagine that structure was ever there. One bridge has rather famously been preserved as a Cooper-Young neighborhood 'art project' a couple of blocks west, and parts of the ROW can still be traced.
Thanks so much!
The current Nashville-Memphis line is NC to McKenzie and thence L&N to Memphis, running on its own track (as far as I can tell from the SPV Atlas) to Aulon.
Johnny
samfp1943 kgbw49: I'll try to help with the NC&StL East out of Memphis {From memory, so bear with me!] The NC&Stl was abandoned East from Memphis to Jackson,Tn. [IIRC in,about 1965]. It was done by the L&N (CSX?) on it's aquisition. I believe it was done to resolve issues with parallel lines (?). The line ran from basicly the Leawood Yard area lasted into the current century; it stub-ended at a location known as LENOW, where there had been a some industrial activities. For some time there had been speculation that that section of line might become a tracked route for the Memphis Transit Authorities to operate its' street cars on(?). The line was never used for that and was lifted after 2000. ( It had originally tied into the ICRR's Riverfront line North of Central Station and Downtown area, and was a route to get trains to Leawood Yard and out of town; St.Jude Hospital was built directly on that ROW.) The Line East from Lenow to Somervile, Whiteville and on to Jackson,Tn was lifted in the 1970s. Currently, there is an NC&Stl Museum in the Jackson,Tn, area. I have not been there, but I think Mac (PWRMN) once mentioned he had been there for a visit. .
kgbw49: I'll try to help with the NC&StL East out of Memphis {From memory, so bear with me!]
The NC&Stl was abandoned East from Memphis to Jackson,Tn. [IIRC in,about 1965]. It was done by the L&N (CSX?) on it's aquisition. I believe it was done to resolve issues with parallel lines (?). The line ran from basicly the Leawood Yard area lasted into the current century; it stub-ended at a location known as LENOW, where there had been a some industrial activities. For some time there had been speculation that that section of line might become a tracked route for the Memphis Transit Authorities to operate its' street cars on(?). The line was never used for that and was lifted after 2000. ( It had originally tied into the ICRR's Riverfront line North of Central Station and Downtown area, and was a route to get trains to Leawood Yard and out of town; St.Jude Hospital was built directly on that ROW.)
The Line East from Lenow to Somervile, Whiteville and on to Jackson,Tn was lifted in the 1970s. Currently, there is an NC&Stl Museum in the Jackson,Tn, area. I have not been there, but I think Mac (PWRMN) once mentioned he had been there for a visit. .
I was not astounded when the NC's Jackson-Memphis line was abandoned.
kgbw49 One general question for the forum - was EHH at IC during the time period when they took the Mainline of Mid-America down from double track to one main track with passing sidings?
One general question for the forum - was EHH at IC during the time period when they took the Mainline of Mid-America down from double track to one main track with passing sidings?
Nope, it was Ed Moyer. Hunter was Moyer's replacement.
https://en.wikipedia.org/wiki/Edward_L._Moyers
"One of the more controversial projects Moyers took on as president of Illinois Central was to reduce the railroad's trackage from a completely double tracked line with ABS to a single track mainline with CTC signals.[11][13] This project began in May 1989 and was completed on August 28, 1991.[14] The scrap materials removed from the single-tracking project were sold for approximately $50 million and further reduced the railroad's supply budget by $70 million; installing CTC was estimated to save the railroad about $100 million."
As an aside, as a dispatcher give me single track CTC with properly placed sidings of sufficient length any day of the week over 2MT ABS.
An "expensive model collector"
Thanks, all! CSX must have another line or combination of lines connecting Memphis and Nashville, and who knows if they still will, though, if EHH gets on board.
I did some research he was the CEO at IC when that happened. He pulled the Newer tracks up that the Federal Government had paid for and saved it for relay rail. It was a Trains magazine article in the 90's I looked at my husbands back issues.
RME, I was referring to the line between Nashville and Memphis that is still shown as part of the CSX system on their system map below. I thought that was ex-NC&StL but maybe it is another road?
Thanks for any help on that!
kgbw49Are there any segments such as ... the Nashville, Chattanooga & St. Louis between Nashville and Memphis that the forum thinks he'd consider spinning off to Genesee & Wyoming or Watco?
Wouldn't you have to rebuild all the parts of it that were removed after 1957, including the part that's now the Green Line trail?
Very interesting discussion so far. Following on Shadow the Cats owner's comments, it would be interesting to hear some thoughts about what some experts who are familiar with the EHH pattern would think about what he might take the axe to at CSX if he gets installed as CEO.
Is the RF&P/ACL from Washington to Jacksonville, FL mostly double track yet, or has that been reduced to single track already?
How much of the former C&O is still double track from Richmond, VA to Cincinnati, OH?
Are there any segments such as the Montreal line or the Nashville, Chattanooga & St. Louis between Nashville and Memphis that the forum thinks he'd consider spinning off to Genessee & Wyoming or Watco?
EHH can be summed up like this. I come in declare all branch lines excess underused 2nd mains excess sell everything that is not used daily lower my costs and then when the mains plug up start blaming the operations people for not doing their jobs right. Sorry we just hired a old EJ&E locomotive shop foreman to run our maintance department. When I told him what he had at his disposal to keep the fleet running he looked at me and said I was trying to keep Locomotives running with 1/4 of the supplies you have in Stock. If I failed to replair them in time I got a personal email from EHH saying I was a bad manager.
CSX core value has been
'It starts with the customer!'
EHH's attitude toward the customers seems to be like that of John Cleese's character in "Fawlty Towers", "This would be a great hotel if it wasn't for the guests."
The Hunter Harrison effect is still causing CN some headaches. A GM plant near me is going to build new models. Wishful thinking on a local forum says CN would like to get the business of hauling the new models. CN, under Harrison, left such a bad taste in GM's mouth they may have to really kiss some backside to regain the lost business.
Norm
I also find interesting the comparison between CN and CP. CN is doing very well indeed, quite a few years after EHH left, by changing their culture to become more customer friendly. That is not necessarily a simple task after enduring the EHH reign, since the attitudes of his brainwashed managers left behind have to be adjusted. Railroads need volume to thrive over the long term, and CN has been successful in luring it away from the EHH-style CP.
A few years ago a friend who worked for CN remarked that EHH makes a great COO but needs to work under a CEO to keep him in check. I saw in one of the recent posts (not sure what forum) somebody else had the same opinion.
John
Oltmannd, I understand and hear you. My point in posting those numbers, which I probably should have expounded on a bit more, was that institutional investors and Board of Directors who are likely numbers driven and not necessarily experts in railroad operations will look at the numbers and hear EHH and Mantle Ridge saying "We CAN turn CSX into CN or CP" and think to themselves "Sounds good to me."
kgbw49 NS reported their full year 2016 financials today, so we have full year financial information from 6 of the 7 Class I railroads. BNSF has not released when their 2016 financial performance summary will be available. But here is some select financial performance information for 2016 results: CSX Operating Ratio-69.4 Net Income-$1.714 Billion Net Income % of Revenues-15.48% NS Operating Ratio-68.9 Net Income-$1.668 Billion Net Income % of Revenues-16.87% KCS Operating Ratio-64.9 Net Income-$0.480 Billion Net Income % of Revenues-20.57% UP Operating Ratio-63.5 Net Income-$4.223 Billion Net Income % of Revenues-21.22% CP Operating Ratio-58.6 Net Income-$1.599 Billion Net Income % of Revenues-25.66% CN Operating Ratio-55.9 Net Income-$3.640 Billion Net Income % of Revenues-30.24% If I am a CSX Board Member and I see EHH's two prior railroads bringing 66% (CP) and 100% (CN) more of their revenue to the bottom line, it is going to be awfully hard to say "no" to a proposal to do the same thing for the company whose shareholders I represent. Also one note - the Net Income % of Revenues is also affected by tax rates, so if there is a drop in the future corporate tax rate in the US, the Net Income % of Revenues will also increase because of US carriers paying less in taxes in future years. But of course, the big factor in increasing the percent of revenue that falls to the bottom line is the lower operating ratio. That is irrespective of the top line revenue amount - it is possible to have more revenue with a higher operating ratio and end up with the same net income as having less revenue with a lower operating ratio. And stating the obvious, what is really wanted is more revenue and a lower operating ratio, and that is the case in any private enterprise, not just railroads.
NS reported their full year 2016 financials today, so we have full year financial information from 6 of the 7 Class I railroads. BNSF has not released when their 2016 financial performance summary will be available.
But here is some select financial performance information for 2016 results:
CSX
Operating Ratio-69.4
Net Income-$1.714 Billion
Net Income % of Revenues-15.48%
NS
Operating Ratio-68.9
Net Income-$1.668 Billion
Net Income % of Revenues-16.87%
KCS
Operating Ratio-64.9
Net Income-$0.480 Billion
Net Income % of Revenues-20.57%
UP
Operating Ratio-63.5
Net Income-$4.223 Billion
Net Income % of Revenues-21.22%
CP
Operating Ratio-58.6
Net Income-$1.599 Billion
Net Income % of Revenues-25.66%
CN
Operating Ratio-55.9
Net Income-$3.640 Billion
Net Income % of Revenues-30.24%
If I am a CSX Board Member and I see EHH's two prior railroads bringing 66% (CP) and 100% (CN) more of their revenue to the bottom line, it is going to be awfully hard to say "no" to a proposal to do the same thing for the company whose shareholders I represent.
Also one note - the Net Income % of Revenues is also affected by tax rates, so if there is a drop in the future corporate tax rate in the US, the Net Income % of Revenues will also increase because of US carriers paying less in taxes in future years. But of course, the big factor in increasing the percent of revenue that falls to the bottom line is the lower operating ratio.
That is irrespective of the top line revenue amount - it is possible to have more revenue with a higher operating ratio and end up with the same net income as having less revenue with a lower operating ratio.
And stating the obvious, what is really wanted is more revenue and a lower operating ratio, and that is the case in any private enterprise, not just railroads.
Part of the reason the EHH managed properties have better ORs is that they are what they are. NS and CSX aren't CP or CN and can't be turned into those properties.
EHH has an operating philosophy that's pretty much been adopted by other roads. Kudos to him for being an industry leader, but he has no new "magic dust" to spread around.
NS has already delivered nearly all CP was promising (stock price) a year earlier than CP was promising.
-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/)
Excerpt from “Activist Investors and Their Implications for Corporate Managers” (2015)
https://www.mantleridge.com/press/
Jeff Greene: Welcome, everybody, to this discussion of the recent transformation of activist investing, both from an investor and a company perspective. I’m Jeff Greene, the Global Transactions Leader for the Life Sciences Sector here at Ernst & Young LLP…
Greene: Okay, let’s turn now to one of our investors. Paul, how do you and your partners at Pershing Square think about this gap [between intrinsic value and market value] that Rick talked about? How large does the gap have to be between your perception of what the company is really worth and where it’s trading for you to make a move?
Paul Hilal: That’s a good question, and it’s something we think about all the time—but there is no simple answer. What I can say is that our strategy—which I describe as “capturing value for our investors by catalyzing value-creating change”—requires a higher expected risk-adjusted return than passive strategies.
There are a number of reasons for this. First, when we embark on a project, we are committed to following through. This can be easy and quick if the incumbent leadership of the company engages with us, takes the time to understand the value of our proposals, and acts decisively in the shareholders’ best interests. If a company chooses not to, activists have three choices: (a) sell the position and move on; (b) repeat the proposal every quarter in the hopes that the leadership eventually does the right thing; or (c) create an opportunity for the shareholders to elect an alternate slate of directors who embrace the activist’s proposals. We always choose path (c), which is often called a “proxy contest.”
Proxy contests can take multiple annual election cycles, consume many years of our team’s time, and they cost tens of millions of dollars. Once the shareholders have installed directors open to an alternate strategy, helping the reconstituted board execute can take years, and it requires many “staff-person-years” of our team’s time.
Longer-term projects have become increasingly the norm for us. In our early years we often pursued value-creating transactions, such as the breakup of non-synergistic businesses. Today a majority of our capital is truly permanent so we increasingly focus on longer-term projects, such as operational transformations. Because of all of the time and costs involved to effect operations-intensive proposals versus transactional proposals, we act only if we see an unusually high expected return from a project—again, much higher than a passive investor would require. We also require a high rate of “return on invested brain damage.”
Greene: Return on invested brain damage—that’s a new metric.
Hilal: That’s a term Bill Ackman coined and that we use internally. It is a measure of cash return on the expected staff-person-years of internal resource investment needed to earn that return. Our team’s time is our scarcest resource.
I also would like to comment on a couple of related topics. First is the misframing of activist engagements as “power struggles” between an activist and the company. Both sides of this framing are off.
First, I don’t think it is quite right to say that the “antagonist” is the activist. Because activists rarely own more than 10% of a company, and because effecting change requires a majority vote, activists have no coercive power at all. All activists can do is highlight opportunities for improvement, and give shareholders an opportunity to vote shareholder-selected directors onto the board. Only broadbased shareholder action can actually effect change. So, on one side of the so called “struggle” is the full shareholder base, not just the activist.
Second, I don’t think it is quite right to say that the “defense” here is “the company.” Often the only parties opposing us are the minority of directors that comprise a board’s leadership, the CEO, and some of the management team. A majority of the other stakeholders—directors not in leadership, many executives, employees, customers, suppliers, unions, etc.—often side with us, and sometimes even reach out through back channels looking to help us effect our proposals. In my opinion, the more correct framing is usually one in which the company’s shareholders (or stakeholders broadly) are opposing an entrenched board leadership and the CEO. The activist is just a catalyst and coordinator of an otherwise unorganized shareholder base expressing its will.
As Jackie Gleason was wont to say, "How sweet it is!"
kgbw49 At latest exchange rates of $1.00 US being worth $1.33 Canadian, Mr. Harrison forefeited about $89 million leaving CP.
At latest exchange rates of $1.00 US being worth $1.33 Canadian, Mr. Harrison forefeited about $89 million leaving CP.
Of course he didn’t go without carfare and lunch.
Excerpt from The Globe and Mail, Jan. 24
http://www.theglobeandmail.com/report-on-business/hunter-harrison-restricted-by-cp-non-compete-clause/article33713995/
Hunter Harrison, the outspoken railroader credited with rescuing Canadian Pacific Railway Ltd. from the doldrums, is making his early exit from the company with about $52-million, even after giving up $118-million in stock and options to pursue a job at U.S. rival CSX Corp…
The $52-million Mr. Harrison retains includes $36-million in shares owned by him and his wife, based on CP's share price of about $201 on Jan. 24, according to the most recent Canadian regulatory filings. Mr. Harrison is required to sell the shares by May 31.
Additionally, he is allowed to keep and sell a portion of the 650,000 stock options he was given in 2012 when he forfeited his CN pension and holdings to take the CP job. This is worth about $10-million. Finally, he receives $6.3-million for shares granted in 2014.
Not included in that total is his 2016 cash bonus, which is yet to be reported. For 2015, a year in which CP’s share price fell by 21 per cent, his cash bonus was $6-million and his salary was $2.8-million.
carnej1Again I'm O.T but; Many folks I know liked the KK donuts but it really is coffee/coffee based beverages that drive the donut shop business...
Bringing coffee back on topic - arrived at the Utica yard one day to run one of our trains. The gate was locked (with a switch lock), so I unlocked it, but my way was blocked by the CSX locomotives making a pickup. So I sat, as did the locos. And sat, and sat...
After a while, here comes a fellow with a DD tray containing cups and who-knows-what (that crew usually comes on duty at midnight - they were probably hungry).
It was the conductor, who had walked a pretty fair distance to get to DD the "back way" because the gate was locked. DD isn't all that far if you can go direct.
In reality, he had a key, but didn't know it...
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...
Firelock76 Some folks here in the South would kill me for saying this, but Krispy Kreme flopped up North because, well, they're not that good, in my opinion anyway, or their non-availability in certain areas gave them a reputation they didn't deserve. Kind of like Coors beer east of the Mississippi. When it finally got to the East Coast the reaction was, "Well, it's good, but it isn't any better than other brands." Back to Krispy Kreme. The Northeast is the "Land O' Bakeries," so you better bring more than your "A" game if you're going to compete with the locals.
Some folks here in the South would kill me for saying this, but Krispy Kreme flopped up North because, well, they're not that good, in my opinion anyway, or their non-availability in certain areas gave them a reputation they didn't deserve.
Kind of like Coors beer east of the Mississippi. When it finally got to the East Coast the reaction was, "Well, it's good, but it isn't any better than other brands."
Back to Krispy Kreme. The Northeast is the "Land O' Bakeries," so you better bring more than your "A" game if you're going to compete with the locals.
Again I'm O.T but; Many folks I know liked the KK donuts but it really is coffee/coffee based beverages that drive the donut shop business around here and no one seemed to impressed by the chain's cup o' joe..Nowadays Dunkin' Donuts TV advertising in this market is almost exclusively about their beverages and breakfast sandwiches with very little mention of donuts/pastries, etc.. Not at all like back "in the day" when their most memorable commercial was the one featuring a put-upon shop manager getting up before dawn and muttering "time to make the donuts"...
"I Often Dream of Trains"-From the Album of the Same Name by Robyn Hitchcock
Firelock76Some folks here in the South would kill me for saying this, but Krispy Kreme flopped up North because, well, they're not that good, in my opinion anyway, or their non-availability in certain areas gave them a reputation they didn't deserve.
Apparently, one attractive thing about Krispy Kreme was living near one of their stores. The time to be there was just as they were turning out a new batch. My daughter went to college in Lynchburg, VA, and that was always a popular evening activity...
I kinda like 'em, but would prefer a little more "Krispy" and a little less "Kreme." They could be messy, as the glaze often was gooey.
They made other types of donuts, but it was the glazed donut that made its way into our area as a fundraiser - we had people who would take orders and travel great distances to pick up boxes of a dozen...
TH isn't bad, but I got some in Toronto a while back whilst passing through, and felt they had an odd taste.
Could be local taste, though. Many soft drink companies had local bottling plants which used, of course, local water. So a Coke in one place might well taste different than a Coke somewhere else.
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