Trains Article -- KCS: Mike's Big Railroad

[Anonymous]

Yellowcakeflats, please call me.

Michele

[Anonymous]

Yellowcakeflats, please call me.

Michele

[Anonymous]

[sigh] It is the railroaders curse to deal with those who believe they are more knowledgable than he who mans the trenches. I have said all that I am going to say in this forum on this subject.

LC

[Anonymous]

[sigh] It is the railroaders curse to deal with those who believe they are more knowledgable than he who mans the trenches. I have said all that I am going to say in this forum on this subject.

LC

[Anonymous]

I think there's been interest in buying KCS since the 1970s -- the CEO's talk to each other constantly, and they're all aware of the possibilities. Just as clearly, KCS has never been seen as a bargain: no one has bought it. The question is whether Haverty has added value to the property or merely increased the purchase price of the property.

On a large scale, and that's the only scale left in this business, KCS is a strange fit with everyone else. The north-south spine is really a terminal road that originates traffic delivered to connections and terminates traffic received from connections: it's a very long short line. The alignment over the Ozarks is very poor and thus expensive to operate; when I rode it I looked in vain for any sign of realignments and improvements; as far as I can tell it's the same railroad today (with heavier rail) it was in 1920.

The result is that KCS runs right through the heart of petrochemical country between New Orleans and Baton Rouge, and in Beaumont, and gets practically none of the business. KCS just doesn't have the network reach to compete for this traffic. It would help if it went to Chicago, but I don't think purchasing the former Milwaukee Road main line (now IC&E) would have helped much because of its poor condition and expensive entrance to Chicago on other people's railroads. From the chemical and paper business standpoint, the logical merger partner is CN.

The east-west line is an entirely different railroad. Very little traffic naturally turns the corner at Shreveport (the Welsh coal move is unnatural). It fits with BNSF or NS or both.

So what you really have is an expensive property that no matter who you are you only want half of! It's quite the jigsaw puzzle.

Charlie Steen

[Anonymous]

I think there's been interest in buying KCS since the 1970s -- the CEO's talk to each other constantly, and they're all aware of the possibilities. Just as clearly, KCS has never been seen as a bargain: no one has bought it. The question is whether Haverty has added value to the property or merely increased the purchase price of the property.

On a large scale, and that's the only scale left in this business, KCS is a strange fit with everyone else. The north-south spine is really a terminal road that originates traffic delivered to connections and terminates traffic received from connections: it's a very long short line. The alignment over the Ozarks is very poor and thus expensive to operate; when I rode it I looked in vain for any sign of realignments and improvements; as far as I can tell it's the same railroad today (with heavier rail) it was in 1920.

The result is that KCS runs right through the heart of petrochemical country between New Orleans and Baton Rouge, and in Beaumont, and gets practically none of the business. KCS just doesn't have the network reach to compete for this traffic. It would help if it went to Chicago, but I don't think purchasing the former Milwaukee Road main line (now IC&E) would have helped much because of its poor condition and expensive entrance to Chicago on other people's railroads. From the chemical and paper business standpoint, the logical merger partner is CN.

The east-west line is an entirely different railroad. Very little traffic naturally turns the corner at Shreveport (the Welsh coal move is unnatural). It fits with BNSF or NS or both.

So what you really have is an expensive property that no matter who you are you only want half of! It's quite the jigsaw puzzle.

Charlie Steen

[edblysard]

Agreed, it was better managed, and I have yet to meet a ex Sante Fe employee who did'nt love working for them. These people really took pride in both their company, and in being a part of it. A lot of other railroads could learn a lot from that.
And , down here at least, it seemed as if the top dogs at BN let the district guys go, and put the ex SF guys in charge. Guess they did learn something after all!
Stay Frosty,
Ed

QUOTE: Originally posted by mudchicken

Ed:

The problem is - is that Santa Fe was better managed, more profitable and more efficient than the cascade green mess, sheer numbers won out. Its more like Burlington Northern Slightly Fatter.

-One of Chico's orphans

ps...If BNSF + KCS happens, can they bring Krebs back and stage another Krebs/Haverty donneybrook on a business car on the back of the 198 again? video?

[edblysard]

Agreed, it was better managed, and I have yet to meet a ex Sante Fe employee who did'nt love working for them. These people really took pride in both their company, and in being a part of it. A lot of other railroads could learn a lot from that.
And , down here at least, it seemed as if the top dogs at BN let the district guys go, and put the ex SF guys in charge. Guess they did learn something after all!
Stay Frosty,
Ed

QUOTE: Originally posted by mudchicken

Ed:

The problem is - is that Santa Fe was better managed, more profitable and more efficient than the cascade green mess, sheer numbers won out. Its more like Burlington Northern Slightly Fatter.

-One of Chico's orphans

ps...If BNSF + KCS happens, can they bring Krebs back and stage another Krebs/Haverty donneybrook on a business car on the back of the 198 again? video?

[Anonymous]

LC, your original post found fault with the article. But every one of your points was discussed in the article except No. 5, which strikes me as trying to prove a negative, unless you have some specific facts you want to share to support it. Are you arguing against the article, or arguing against the company's decisions? They're not the same thing.

Charlie Steen

[Anonymous]

LC, your original post found fault with the article. But every one of your points was discussed in the article except No. 5, which strikes me as trying to prove a negative, unless you have some specific facts you want to share to support it. Are you arguing against the article, or arguing against the company's decisions? They're not the same thing.

Charlie Steen

[Anonymous]

Here's a little insight.

1. The MCS system caused quite a few problems at inception and despite its sophisticated nature still can't seem to help customers adequately trace cars and moves. his is costing a serious number of loads.

2. KCS and its history of overpaying for opportunities is costing it more than most realize. This is not just TFM, but MSRC and Gateway too.

3. Current cash crunch is an issue.

4. Inability of Meridian Speedway to move traffic is a major limiting factor (see #2# above)

5. Future dotted by possibility of acquisition limits future. A lot of people looking over their shoulders rather than minding the store.

That's all I'll say. There is more...

LC

[Anonymous]

Here's a little insight.

1. The MCS system caused quite a few problems at inception and despite its sophisticated nature still can't seem to help customers adequately trace cars and moves. his is costing a serious number of loads.

2. KCS and its history of overpaying for opportunities is costing it more than most realize. This is not just TFM, but MSRC and Gateway too.

3. Current cash crunch is an issue.

4. Inability of Meridian Speedway to move traffic is a major limiting factor (see #2# above)

5. Future dotted by possibility of acquisition limits future. A lot of people looking over their shoulders rather than minding the store.

That's all I'll say. There is more...

LC

[mudchicken]

Ed:

The problem is - is that Santa Fe was better managed, more profitable and more efficient than the cascade green mess, sheer numbers won out. Its more like Burlington Northern Slightly Fatter.

-One of Chico's orphans

ps...If BNSF + KCS happens, can they bring Krebs back and stage another Krebs/Haverty donneybrook on a business car on the back of the 198 again? video?

[mudchicken]

Ed:

The problem is - is that Santa Fe was better managed, more profitable and more efficient than the cascade green mess, sheer numbers won out. Its more like Burlington Northern Slightly Fatter.

-One of Chico's orphans

ps...If BNSF + KCS happens, can they bring Krebs back and stage another Krebs/Haverty donneybrook on a business car on the back of the 198 again? video?

[edblysard]

Mr. Haverty has done exactly what he was hired to do. He has made KCS attractive enough to generate interest at buying/merging with it among the other "big" railraods, but also made sure if no one does buy, it can still survive, stand alone and operate.

Not an easy feat to accomplish. If Sante Fe had been managed like that, it might be know today as ASTF&BN, instead of the other way around. But we still call it the Brand New Sante Fe, instead of BNSF.
Stay Frosty,
Ed[:D]

[edblysard]

Mr. Haverty has done exactly what he was hired to do. He has made KCS attractive enough to generate interest at buying/merging with it among the other "big" railraods, but also made sure if no one does buy, it can still survive, stand alone and operate.

Not an easy feat to accomplish. If Sante Fe had been managed like that, it might be know today as ASTF&BN, instead of the other way around. But we still call it the Brand New Sante Fe, instead of BNSF.
Stay Frosty,
Ed[:D]

[Anonymous]

Oh my! Is the BNSF and KCS thinking about becoming bed partners. Great, annother great merger. Does anybody know the scoop? I hear grumblings around the yard office of the same.
Ken

[Anonymous]

Oh my! Is the BNSF and KCS thinking about becoming bed partners. Great, annother great merger. Does anybody know the scoop? I hear grumblings around the yard office of the same.
Ken

[Anonymous]

Glosses over what, exactly? It's all fine and dandy to cast aspersions, but is it not unreasonable to expect you to cite at least one fact to buttress your opinion?

Charlie Steen

[Anonymous]

Glosses over what, exactly? It's all fine and dandy to cast aspersions, but is it not unreasonable to expect you to cite at least one fact to buttress your opinion?

Charlie Steen

[Anonymous]

Aside from the lack of cash, hedging on the $800 million the Mexican government owes them to buy the remaining 20% of TFM, and the need to make improvements, what are some of the other issues?

Do you think it will eventually come down to one of the possibilities suggested by the author? CN + BNSF + KCS or NS + BNSF + KCS? What would they call it?

[Anonymous]

Aside from the lack of cash, hedging on the $800 million the Mexican government owes them to buy the remaining 20% of TFM, and the need to make improvements, what are some of the other issues?

Do you think it will eventually come down to one of the possibilities suggested by the author? CN + BNSF + KCS or NS + BNSF + KCS? What would they call it?

[Anonymous]

The article is entertaining and quite well written. Unfortunately, it also glosses over some of the more serious problems and issues at KCS...

LC

[Anonymous]

The article is entertaining and quite well written. Unfortunately, it also glosses over some of the more serious problems and issues at KCS...

LC

[Anonymous]

Does sound dorky.

[Anonymous]

Does sound dorky.

[Anonymous]

Good article! What an amazing series of events. Mike Haverty is either a man with vision and able to see the big picture or else is one very lucky guy. Sure KCS isn't based in Las Vegas? [;)]

My only question -- why NAFTA Rail? [xx(]

I understand how that could help politically, but from a railfan or model railroader perspective what a dumb name.

[Anonymous]

Good article! What an amazing series of events. Mike Haverty is either a man with vision and able to see the big picture or else is one very lucky guy. Sure KCS isn't based in Las Vegas? [;)]

My only question -- why NAFTA Rail? [xx(]

I understand how that could help politically, but from a railfan or model railroader perspective what a dumb name.