Would be nice if someone could explain exactly how mergers would create capacity/improve efficiencies. Even economies of scale are subject to the law of diminishing returns beyond a certain size. All of the major systems now interchange equipment easily enough... most even have run through agreements that eliminate the need for swapping power.. As it is now many if not most shippers really have only one option when it comes to rail... further consolidation would create an "its our way or the highway" type of scenario for most shippers..
Is the key statement that nobody wants them in their backyard?
Brian Schmidt 'If I did and said some of the things Hunter said and did, I’d be in jail.'
'If I did and said some of the things Hunter said and did, I’d be in jail.'
Yep.
During the 2007 CN strike there came about a very strange situation, the international UTU leadership declared the strike illegal, and went into court WITH CN against the Canadian union leaders.
Harrison had somehow managed to "win over" certain important people in the UTU.
You can imagine how well this went over with the Canadian membership. The UTU ended up being decertified here, and we are now Teamsters.
This article gives a pretty good summary. Also of note, Frank Wilner now writes for Railway Age, never mentioning his own role in the 2007 charade.
https://thetyee.ca/News/2007/02/22/RailStrike/
And while they are not illegal, Harrison's obscene nicknames for Canadian crews are still well known among the workforce here.
Greetings from Alberta
-an Articulate Malcontent
Kgbw49--- Your analysis is right on.. no cracked and cloudy crystal ball, it's seems very clear to me. I think it unfolds and ends up just as you say.
Well, a merger would certainly take some pressure off of the need to be competitive, not that there's much competition out there now in the rail industry. 10 or 20 carriers would be much better... more competition..more choice for the consumer.. smaller more nimble companies that are easier to manage, with fewer layers of management. Competition is the cornerstone of capitalism.. take that away and you're left with an unwieldy utility with no get up and go and no incentive to get better.
What will happen once the first domino falls - say CP as the smallest of the Big 6 tries to buy NS because it is the next lowest capitalized of the Big 6 - the others will all join in and you will have a carving up of the two eastern US railroads amongst the other 4 of the Big 6 plus KCS.
Why?
Because Canada will never let either one of their railroads be acquired by a US railroad, so there will always be a CN and a CP.
But the two western railroads are the biggest sharks in the ocean in terms of resources, so they will swim in to get their fill and will always be there as UP and BNSF.
NS and CSX will be carved up by the STB amongst those four, in the same manner that Conrail was split between NS and CSX a generation ago.
KCS will get some small portion or itself be split up or turned in to a shared assets line of some sort between CP and CN.
One cloudy and cracked crystal ball.
Ulrich I certainly agree with him on the need for building "bridges" to Ottawa and Washington. About more mergers.. i don't know.. it seems to me the railroads work very well together now without the need for mergers.. and another round of mergers would almost certainly come at the cost of complex interchange agreements and cumbersome restrictions to preserve some vestige of competition. Why not work closer together without merging? That would also permit some flexibility that would not be possible with only a couple or three large carriers and would be less likely to invite more regulatory oversight.
I certainly agree with him on the need for building "bridges" to Ottawa and Washington. About more mergers.. i don't know.. it seems to me the railroads work very well together now without the need for mergers.. and another round of mergers would almost certainly come at the cost of complex interchange agreements and cumbersome restrictions to preserve some vestige of competition. Why not work closer together without merging? That would also permit some flexibility that would not be possible with only a couple or three large carriers and would be less likely to invite more regulatory oversight.
While I'll never buy into the PSR thing, I do think Mr. Creel has a point when it comes to the almost-inevitablity of mergers. It's just bound to happen sooner or later. But, more importantly, I hope it's the "right" combinations that take place.
Lithonia Operator Creel sure worships at the altar of EHH.
Creel sure worships at the altar of EHH.
Hunter Harrison, "Saint or Sinner?"
Like every other controversial man, it probably depends on who you talk to.
I did find Mr. Creel's remark "Hunter might be in jail..." interesting. I wonder over what? Depending on who checks in on this topic, I'm sure we'll find out.
Call me a cynic, but instead of mergers I could see flat-out offers of sale by "whoever" owns "whatever" once the short-sighted-next-quarter fanatics think they've milked as much money out of their "whatevers" that they can, and aren't likely to get any more, or any more than they're getting right now.
Happened to the company I used to work for. One day a new red-hot gee-whiz CEO took over; laid-off, cut-back, and streamlined the company to maximize profits, not to make the company stronger, but to make it an attractive take-over target for others. It worked. The company was sold, the owners made a bundle, he took his "golden parachute," and was on his merry way.
Which is why even though I never took my job and paycheck for granted, and gave it 100% every day and didn't mind doing so, I've never been a "rah-rah" company guy. It's a company, not a family.
"Hey mister, wanna buy Norfolk-Southern?"
http://trn.trains.com/news/news-wire/2020/01/06-cps-creel-sees-mergers-as-inevitable-but-delayed-by-precision-scheduled-railroading
Brian Schmidt, Editor, Classic Trains magazine
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