(Reuters) - CSX Corp , the No. 3 U.S. railroad operator, will slash the number of locomotives served by a long-term maintenance agreement, a move that cuts service bills under the agreement by some $3.3 billion, company filings showed on Wednesday.
https://www.yahoo.com/finance/news/rail-operator-csx-reduces-locomotives-maintenance-program-220632662--finance.html
And the investors will reap the benefits while the crews struggle along with locomotives that need work...
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...
zardoz (Reuters) - CSX Corp , the No. 3 U.S. railroad operator, will slash the number of locomotives served by a long-term maintenance agreement, a move that cuts service bills under the agreement by some $3.3 billion, company filings showed on Wednesday. https://www.yahoo.com/finance/news/rail-operator-csx-reduces-locomotives-maintenance-program-220632662--finance.html
Well it doesn't say *who* the long-term contract is with, so it is hard to draw any direct conclusions.
However, I'd bet it is CSX's agreement with GE for that extensive fleet.
Just because CSX has chosen to reduce the amount it relies on the contract doesn't mean the work won't get done. It may be reduced, but that is a different point. It could just mean that instead of relying on GE for much of the maintenance program, a lot of it is moved back in-house, where it is possibly cheaper.
Another possibility which may coincide with the first is that CSX may be removing many of the Dash8s from this agreement with the expectation of retirement disposition of the fleet within the next few years.
It sure would be nice to know more details. But a blanket "EHH is trying to kill the motive power" this is not...at least not without more details. Otherwise this looks like "OMG Russia" in the political arena these days.
If I may pan the media, don't believe everything you read. They all have their own biases.
That said, If CSX is divesting themselves of locomotives that have outlived their lifespans and are costing them more to maintain than they are worth more power to them. They can be rehabilitated.
It only makes good business sense to do so. Shortlines will willingly buy those that have a reasonable service life left so they can replace their power that is about to expire based on age and condition.
"One man's trash....."
Many of those locomotives still have a lot of life left in them and the short lines would welcome them to their fleet.
Norm
There's a class one that actually maintains it's locomotives? Who would've thunk it.
So if CSX is no longer going to use an outside vendor, who's going to do the work? I'm under the impression that EHH made some large cuts in the mechanical department already.
Jeff
I have no idea how the contract in question is structured.
I do know, that at Cumberland there was a CSX Shop and a GE shop, side by side. Numbers that got presented to Division Management on the moring conference call seemed to indicate the CSX Shop seriously out performed the GE Shop when it came to through-put and having locomotives available for service.
I am not aware of what the relative manpower situation was between the CSX and GE shops.
Never too old to have a happy childhood!
Jeff,
LTEX will surely profit from Harrison's follies. Short lines are awaitin new used power.
jeffhergertSo if CSX is no longer going to use an outside vendor, who's going to do the work?
Seems like I read somewhere recently that GE is furloughing much of it's Erie staff? Could CSX be thinking of hiring some of them?
I found the original article almost totally non-informative. How long does it take to realize the $3.3 billion savings? No clue from the article.
CSX has pulled 400-500 units out of service. It makes no sense to maintain them. The fact that they are cutting back on contract maintenance says that they do not need the capacity and implies that they would rather do it themselves.
It is reasonable to assume that CSX determined the cost of contract maintenance vs. in house. In addition, CSX may be constrained in cutting its own forces. This last is speculation on my part.
I see nothing to get excited about in this news.
Mac
PNWRMNM I found the original article almost totally non-informative. How long does it take to realize the $3.3 billion savings? No clue from the article. CSX has pulled 400-500 units out of service. It makes no sense to maintain them. The fact that they are cutting back on contract maintenance says that they do not need the capacity and implies that they would rather do it themselves. It is reasonable to assume that CSX determined the cost of contract maintenance vs. in house. In addition, CSX may be constrained in cutting its own forces. This last is speculation on my part. I see nothing to get excited about in this news. Mac
Exactly. Those facts won't stop the anti EHH trolls from posting though.
An "expensive model collector"
PNWRMNMCSX has pulled 400-500 units out of service. It makes no sense to maintain them. The fact that they are cutting back on contract maintenance says that they do not need the capacity and implies that they would rather do it themselves.
Had the article somehow linked the units pulled out of service to the reduction of the service contract, it would all have made more sense. Instead, the fact that CSX is pulling locomotives was included almost as a footnote.
tree68 PNWRMNM CSX has pulled 400-500 units out of service. It makes no sense to maintain them. The fact that they are cutting back on contract maintenance says that they do not need the capacity and implies that they would rather do it themselves. Had the article somehow linked the units pulled out of service to the reduction of the service contract, it would all have made more sense. Instead, the fact that CSX is pulling locomotives was included almost as a footnote.
PNWRMNM CSX has pulled 400-500 units out of service. It makes no sense to maintain them. The fact that they are cutting back on contract maintenance says that they do not need the capacity and implies that they would rather do it themselves.
That would have required Reuters to know something about railroading. Don't expect the media aside from Trains and Railway Age to know enough to point that out in the way you seem to be expecting?
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