When Lou saved a Zephyr

Posted by Fred Frailey
on Friday, May 27, 2016

In his long railroad carrier, Louis Menk ran four big railroads: Frisco, Burlington, Northern Pacific, and the newly created (in 1970) Burlington Northern. He was unafraid to make momentous decisions and comfortable with his opinions. One oft-repeated opinion he voiced to me late in his life was this: “You couldn’t make money then, can’t make money now and won’t make money ever on intercity passenger trains. That’s all there is to it.”

At the Frisco, Menk sought in the mid 1960s to discontinue its entire network of passenger trains and rid the company of all but two pair of trains. Then late in 1965 he became Burlington’s president. The Chicago, Burlington & Quincy had the most aggressive passenger sales force in America, run by Bill Burke but energized by his assistant general passenger traffic manager, Herb Wallace. Wallace, a born salesman, was a fountain of ideas. About the time Menk showed up, Wallace wrote a prospectus on how to relaunch the anemic Kansas City Zephyr between Chicago and its namesake town; the train was being beaten to death by competition from Santa Fe.

Anyway, Menk immediately splashed cold water on all the Burlington passenger train promotions, such as special trains to take Chicagoans to Colorado for the weekend. And to prove his point that passenger trains lost money even at CB&Q, he hired a consulting company whose team included W. Edwards Deming, an engineer, statistician, and management consultant credited with teaching the Japanese after World War II how to manufacture quality products.

Deming labored long and hard to document each and every cost of running passenger trains, down to how many minutes it took to switch the Nebraska Zephyr in Galesburg or the Kansas City-Omaha locals in Omaha. In the end, the consulting company reported that Burlington’s passenger fleet produced net income of $4.5 million in 1964, the period under study. By the time this was reported in 1966, however, Menk was long gone to Northern Pacific. Likely, he never read the report he commissioned.

I hope I’m not boring you, but I wanted to make the point that Lou Menk did not tolerate passenger trains very well. In clearing out our house in Virginia this week, I came across a letter Menk wrote to Myron Christie, his counterpart at Western Pacific. Burlington, Rio Grande and WP jointly operated, beginning in 1948, the Chicago-Oakland domeliner California Zephyr. The train was beloved by one and all. But by 1966 losses on WP by the Zephyr were starting to strip Western Pacific, the smallest of the three railroads, of its profits from running freight trains.

I want to reproduce the letter Menk wrote to Christie on April 28,1966, because in it a man who professed to dislike passenger trains refused to endorse cutting off the foot, so to speak, of his flagship first-class train. Here goes:

“At our meeting in Chicago, April 19, you informed Mr. Aydelott [Gus Aydelott was president of the Denver, Rio Grande & Western] and me that it was the intention of the Western Pacific to file an application for the discontinuance of the operation of the California Zephyr between Salt Lake City and Oakland. Burlington feels that such a course of action is unwise, impractical and untimely for a great many reasons, a few of which I shall attempt to outline herein.

“First, however, lest there be some misunderstanding concerning my philosophy in regard to deficit passenger operations, I think I should define my personal feelings in these matters. As you know, I spearheaded what was perhaps the largest passenger-off case heard by the I.C.C. since the 1958 law has been in effect. The results were by and large successful. Therefore, it should be recognized that I feel very strongly that a railroad should not be obligated to operate substantial deficit producing passenger service which does not serve the public interest.

“I am, however, a realist as well. The case on the Frisco was vastly different than the service now under consideration. In the case of the California Zephyr there is a comparatively high occupancy rate. On the Frisco it was very low. By comparison the losses in connection with the Frisco operations were very high, yours are low, and in fact have declined. The Zephyr serves an area which attracts the traveling public. That was not true in the Frisco case. I could go on and on ad infinitum.

“So much for what I personally feel. We here at Burlington feel that already we have made some concessions which by your own record have resulted in a decline in your alleged loss. Our feeling is that not enough time has elapsed for those measures to be fully effective.

“While we might or might not question your loss figures, it is almost a certainty that in a proceeding before the Commission the opposition will, with probable effectiveness.

“Whether we like it or not it is a certainty that the opposition will relate the improving profit picture of Western Pacific to this case.

“Finally, you I know are aware as I am of this administration’s feelings on the subject of passenger trains. At a meeting last winter the President himself was quite definite, therefore my feeling with respect to timing.

“You might also relate the Southern Pacific experience to what might be your own.

“We honestly feel that there is a future for this type operation if we maintain the quality of service and at the same time consider and make economies that appear to be possible.

“It is therefore my duty to inform you that Burlington will not support an application for discontinuance of your operation and while we would do so with great regret, we probably would take a formal adversary position in any such proceedings.

“With best personal wishes,

“Louis W. Menk”

By its own accounting, Burlington earned almost $200,000 operating its end of the California Zephyr in 1965, although that would turn abruptly to a loss of $283,000 in 1966, the year of the letter. Menk by April of 1966 must have sensed that the economic tide was turning against this train.

So why did he write this remarkable letter? I suggest we take him at his word—that the deck of political cards would be stacked against letting this popular train be taken off at that time, so why incur the public wrath? Western Pacific nevertheless went ahead and sought without success to be rid of the Zephyr. WP tried again in 1968 and once more hit a wall. Finally, in 1969, it sought a third time to remove the Zephyr. Remarkably, even then WP’s passenger department still employed 252 people, all devoted solely to this train! In 1969, Western Pacific’s losses from operating the train more than consumed the railroad’s operating income.

The California Zephyr ceased to run west of Salt Lake City early in 1970. Interestingly enough, through all of this, neither Menk or his successors at Burlington ever joined Western Pacific’s efforts to discontinue the train, and in fact operated it with Rio Grande as a triweekly Chicago-Salt Lake City domeliner right up to the start of Amtrak in May 1971. Without that unwavering support, the Cal Zephyr would have disappeared as a through train years earlier. Thank you, Lou, because I realized my goal of riding the train the entire way mere months before that became impossible..

I hope you have enjoyed this little look inside the machinations of the railroad business half a century ago, this parting of the curtains that lets those of us on the outside peer inside to see the people on the other side who call the shots. It all goes to show that you should judge people not by what they say, but by what they do.—Fred W. Frailey

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