IC Industries - Whitman.
Northwest Industries.
That assumption of an ongoing enterprise seems to have gone the way of the commonweal.
charlie hebdoIf a group of vulture capitalists succeeded in buying voting g control of a railroad and decided it was in their financial interest to d/c services on most of their routes, tearing up the track on many for scrap, selling the real estate and extracting the cash, would you suggest that's fine?
Well, if they own it, it's 'their railroad and their rules' ... and if any nasty little questions regarding union agreements, common-carrier obligations, and so forth become significant, it only increases the likelihood of reductionist scrapping.
You may recall that IC very nearly spun off the railroad when the investment division became so profitable, and the name American Premier Underwriters should also ring a bell. ISTR that in the go-go days of conglomerate formation in the 1960s there was some discussion of railroad companies diversifying into profitable fields and then, eventually, shucking the high-aggravation relatively-low-return rail business.
I'd argue that it would have made far better sense for SP to have spun off SPRINT early, rather than having it stripped in the abortive machinations around SPSF in the mid-Eighties.
Another comparison is the L&NE, part of which was 'outsourced' (to CNJ, as I recall) and the rest substantially shut down and removed in the early '60s by direct board order, when anthracite demand dropped below appropriate levels. This is different from something like the NYO&W that just couldn't eke out investors; it was a well-run and profitable concern to the end.
If a group of vulture capitalists succeeded in buying voting g control of a railroad and decided it was in their financial interest to d/c services on most of their routes, tearing up the track on many for scrap, selling the real estate and extracting the cash, would you suggest that's fine?
BaltACD charlie hebdo Murphy Siding charlie hebdo I think that view is not entirely historical. We are in a recurring period of emphasis on very short term profit extraction, often to the detriment of longer term business success. It's driven by Wall Street seeking unparalled ROIs. Here today, gone tomorrow. A different business philosophy than in other times, but much akin to the Robber Baron era ~130 years ago. I'll agree that it's akin to the Robber Baron era. Your phrase "recurring period of emphasis on very short term profit extraction" says a lot. Haven't we had that happen a lot in the last 130 years, and in a lot of periods before then? Unfortunately true. I think less so from TR through 1981, and increasingly so since then. The investor/speculation-driven demand for making a quick buck and ignoring the long term. Short term profit extraction to the near sole benefit of 'enhanced shareholder value' has the strange habit of wrecking companies where it is implemented over time.
charlie hebdo Murphy Siding charlie hebdo I think that view is not entirely historical. We are in a recurring period of emphasis on very short term profit extraction, often to the detriment of longer term business success. It's driven by Wall Street seeking unparalled ROIs. Here today, gone tomorrow. A different business philosophy than in other times, but much akin to the Robber Baron era ~130 years ago. I'll agree that it's akin to the Robber Baron era. Your phrase "recurring period of emphasis on very short term profit extraction" says a lot. Haven't we had that happen a lot in the last 130 years, and in a lot of periods before then? Unfortunately true. I think less so from TR through 1981, and increasingly so since then. The investor/speculation-driven demand for making a quick buck and ignoring the long term.
Murphy Siding charlie hebdo I think that view is not entirely historical. We are in a recurring period of emphasis on very short term profit extraction, often to the detriment of longer term business success. It's driven by Wall Street seeking unparalled ROIs. Here today, gone tomorrow. A different business philosophy than in other times, but much akin to the Robber Baron era ~130 years ago. I'll agree that it's akin to the Robber Baron era. Your phrase "recurring period of emphasis on very short term profit extraction" says a lot. Haven't we had that happen a lot in the last 130 years, and in a lot of periods before then?
charlie hebdo I think that view is not entirely historical. We are in a recurring period of emphasis on very short term profit extraction, often to the detriment of longer term business success. It's driven by Wall Street seeking unparalled ROIs. Here today, gone tomorrow. A different business philosophy than in other times, but much akin to the Robber Baron era ~130 years ago.
I think that view is not entirely historical. We are in a recurring period of emphasis on very short term profit extraction, often to the detriment of longer term business success. It's driven by Wall Street seeking unparalled ROIs. Here today, gone tomorrow. A different business philosophy than in other times, but much akin to the Robber Baron era ~130 years ago.
I'll agree that it's akin to the Robber Baron era. Your phrase "recurring period of emphasis on very short term profit extraction" says a lot. Haven't we had that happen a lot in the last 130 years, and in a lot of periods before then?
Unfortunately true. I think less so from TR through 1981, and increasingly so since then. The investor/speculation-driven demand for making a quick buck and ignoring the long term.
Short term profit extraction to the near sole benefit of 'enhanced shareholder value' has the strange habit of wrecking companies where it is implemented over time.
If the investors are prevented from deciding if a company investment is viable, who should decide?
It's definitely a shippers' market now.. but at least with the smaller ones there's a bit of a relationship at play, and the left hand has some idea about what the right hand is doing. With the bigger shippers.. well.. it does get comical at times. And every five to ten years the faces around the table change and its back to "who are you and what are you good for".. back to square one.
True. I vaguely remember the term "an ongoing business concern" as being an assumption made in accounting practice. Perhaps that term is no longer universally applicable?
Nobody wants to 'work' for their compensation. Everybody is looking for the short cut. Just the BIG accounts. Just the TRAIN LOAD shippers.
In the last round of 'plant rationalization' it was featured that the 10 car a week customer was of value to the railroads. Now it is the trainload a week customer that is viewed as the bottom end.
Never too old to have a happy childhood!
Probably too much emphasis on cost reduction and not enough on growing sales. Just my opinion.. but they'd be better off long term if they'd welcome smaller shippers (which comprise about 90% of manufacturers). Wouldn't we all though .. Most sales people focus on the big accounts and drive right past the ones who supply only one or two car/truckloads a week.
Ulrich Economy is slowing down .. if it were PSR you'd see a slowdown among the PSR railroads only.. but we're seeing a slowdown across the board among all carriers and modes.
Economy is slowing down .. if it were PSR you'd see a slowdown among the PSR railroads only.. but we're seeing a slowdown across the board among all carriers and modes.
Thus just one of many variables within the bigger picture.
One might opine that PSR is perhaps exascerbating the effects of the slowdown specific to the railroads.
Or not.
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...
Murphy Siding Euclid Murphy Siding Euclid Are carloadings down because of an economic downturn, or is it because the railroads are intentionaly refusing customer demand that the railroads feel does not pay enough? Doesn't every business do this? Demand to pay McDonald's 30 cents for a Big Mac and see if they refuse your business. I ask the question only to seek clarity on the reason for the layoffs. If they are due to reduced demand from customers, the resulting layoffs are perceived as fair play. However, if the layoffs are due to refusing less profitable business, the layoffs will not be seen as fair. This is an extremely polarized and divisive theme that is energized by the eternal conflict between railroad management and labor, and I expect the forum will tend to take the side against management. In my opinion, the layoffs are due to our economy having slowed to the threshold of entering a new recession. Yet the issue is being hijacked to support the position that management is refusing business, and thus causing the layoffs, all for the purpose of lining the pockets of Wall Street investors. Wow! Smoking guns and grassy knolls. I'll suggest that-right or wrong-the railroads are cutting employee numbers in order to do the most business with the least amount of labor cost, in order to make as much profit as they can for the owners (stockholders). This is nothing new. It's probably been going on since the beginning of the industrial revolution.
Euclid Murphy Siding Euclid Are carloadings down because of an economic downturn, or is it because the railroads are intentionaly refusing customer demand that the railroads feel does not pay enough? Doesn't every business do this? Demand to pay McDonald's 30 cents for a Big Mac and see if they refuse your business. I ask the question only to seek clarity on the reason for the layoffs. If they are due to reduced demand from customers, the resulting layoffs are perceived as fair play. However, if the layoffs are due to refusing less profitable business, the layoffs will not be seen as fair. This is an extremely polarized and divisive theme that is energized by the eternal conflict between railroad management and labor, and I expect the forum will tend to take the side against management. In my opinion, the layoffs are due to our economy having slowed to the threshold of entering a new recession. Yet the issue is being hijacked to support the position that management is refusing business, and thus causing the layoffs, all for the purpose of lining the pockets of Wall Street investors.
Murphy Siding Euclid Are carloadings down because of an economic downturn, or is it because the railroads are intentionaly refusing customer demand that the railroads feel does not pay enough? Doesn't every business do this? Demand to pay McDonald's 30 cents for a Big Mac and see if they refuse your business.
Euclid Are carloadings down because of an economic downturn, or is it because the railroads are intentionaly refusing customer demand that the railroads feel does not pay enough?
Are carloadings down because of an economic downturn, or is it because the railroads are intentionaly refusing customer demand that the railroads feel does not pay enough?
Doesn't every business do this? Demand to pay McDonald's 30 cents for a Big Mac and see if they refuse your business.
I ask the question only to seek clarity on the reason for the layoffs. If they are due to reduced demand from customers, the resulting layoffs are perceived as fair play. However, if the layoffs are due to refusing less profitable business, the layoffs will not be seen as fair.
This is an extremely polarized and divisive theme that is energized by the eternal conflict between railroad management and labor, and I expect the forum will tend to take the side against management.
In my opinion, the layoffs are due to our economy having slowed to the threshold of entering a new recession. Yet the issue is being hijacked to support the position that management is refusing business, and thus causing the layoffs, all for the purpose of lining the pockets of Wall Street investors.
Wow! Smoking guns and grassy knolls. I'll suggest that-right or wrong-the railroads are cutting employee numbers in order to do the most business with the least amount of labor cost, in order to make as much profit as they can for the owners (stockholders). This is nothing new. It's probably been going on since the beginning of the industrial revolution.
I am not sure what you are disagreeing with me about. I agree with your point about business wanting to minimize costs in order to make the higherst profit. That is Econ 101.
But why do railroads seem to suddenly arrive at that conclusion and lay off a thousand empolyees? It cannot be just the day to day expense and income varaitions that suddenly bring about the need for such a massive layoff.
Some people believe the explanation is the sudden introduction of PSR philosophy which they say seeks to loot the company in order to reward investors. I happen to believe the reason is a rapidly worsening economy.
Thanks to Chris / CopCarSS for my avatar.
Volumes appear to be down across all modes.. not just rail. Thus PSR may not be the reason. Likely we're seeing a slowing economy.. One of the largest 3PLs, CH Robinson, has just reported their worst quarter results in a decade.. surely not due to PSR in their case.
Murphy SidingDoesn't every business do this? Demand to pay McDonald's 30 cents for a Big Mac and see if they refuse your business.
They'll give you a nice price if you order 100 Big Macs, but onsies and twosies aren't worth their trouble...
Oh - and you can forget about that sixty second guarantee...
ROBIN LUETHE It is a dangerous game to increase profits by shrinking sales. Best done very carefully. Railroads are underestimating the need to preserve political power while playing this game. They are more vulnerable than they appear to be thinking.
It is a dangerous game to increase profits by shrinking sales. Best done very carefully. Railroads are underestimating the need to preserve political power while playing this game. They are more vulnerable than they appear to be thinking.
Alas, increasing profits (at least on paper, and in 'my' pocketbook) seems to be the word of the day, especially when the "activist investors" are involved in the game.
That's front and center in "PSR." Few, if any, of the operational concepts invoked in PSR are new. What seems to characterize hardcore PSR is getting rid of low margin traffic and getting rid of anyone not directly involved with moving the high margin traffic, with the savings being moved to the bottom line where they can be harvested.
Those railroads which had PSR inflicted on them have generally rolled back some of the tenets of PSR once the activist investors left the building.
EuclidAre carloadings down because of an economic downturn, or is it because the railroads are intentionaly refusing customer demand that the railroads feel does not pay enough?
One would need access to each company's marketing and financial plans, as well as executive and board committee meeting minutes, to answer the question.
Rio Grande Valley, CFI,CFII
PJS1 According to the Association of American Railroads, total freight traffic – carloads and intermodal units – YTD January 18th was down 7.48 percent compared to the same period in 2019. Carloads were down 7.4 percent; intermodal units were down 8.1 percent. Seven of the ten reporting categories show decreases ranging from 1.9 to 16 percent. Grain decreased 16 percent while coal dropped 14.2 percent. Motor Vehicles and Parts fell 11.3 percent. Intermodal units decreased 8.1 percent. Other gained 7.4 percent and Chemicals 2.7 percent. Grain shed 9,167 carloads while coal declined by 29,958 cars. Motor Vehicles and Parks dropped by 4,131 carloads. Intermodal units were down 58,586. Other increased by 2,106 carloads while Chemicals increased 2,626. The figures exclude U.S. operations by CN, CPR, and GMXT. The decline in coal shipments, which has been ongoing for several years, is due largely to electric power generators switching from coal to natural gas for boiler fuel. The other changes are due to a variety of economic factors that many if not most economists seemingly cannot agree on.
Euclid Is the tonnage down because rail transportation demand is down?
Is the tonnage down because rail transportation demand is down?
As I understand it, part of the PSR plan is to discourage low-profit traffic.
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"A stranger's just a friend you ain't met yet." --- Dave Gardner
Euclid Why is the tonnage down?
Why is the tonnage down?
Because PSR says return on investment is more important than total tonnage.
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