July 2005 Trains..........on KCS

[nanaimo73]

It looks like the July 2005 Trains is going to focus on KCS and who it should merge with, or can it survive on it's own.It must have a very heavy debt load while it is buying the Mexican operations. What do you all think ? Merge with CN or BNSF ? Or someone else ?

[gabe]

Independence. Viva La KCS!

Gabe

[Anonymous]

I agree KCS needs to stay indy :)

[Anonymous]

I think that this could really be a pretty big coup for either NS or CSX to grab KCS. Think about having acess from everything between the northeast and Mexico City. Though i prefer having grey ghosts here in Texarkana.

[gabe]

QUOTE: Originally posted by emeades

I think that this could really be a pretty big coup for either NS or CSX to grab KCS. Think about having acess from everything between the northeast and Mexico City. Though i prefer having grey ghosts here in Texarkana.

To say nothing of KCS's chemical traffic.

I really think NS would be the biggest suitor, as Mid-South would be a big catch for them. I don't know that CSX has the Atlanta connections or the capital to make the Mid-South Corridor work. I wonder what would happen to KCS's Gateway Western accusition, it would be completely redundant in NS's hands.

Who would have thought that the Mid-South would be a valuable part of anyone's empire 20 years ago? Yet another shedded part of the IC system that was able to make money after IC stoped neglecting it . . . I love the IC, but . . . .

Truth is stranger than fiction.

Gabe

[chad thomas]

I'm no expert but I understand KCS industries is in good financial condition. I think they should stay independant.

[gabe]

Yeah, I agree Chad, as I said above, viva la KCS. However, in today's money-merger oriented world, I don't think it will stay independent for long.

And, I am not contending KCS is on the financial ropes, but I know it doesn't have enough money to do all of the projects that need done. I remember reading a report by their CEO about a year or so ago lamenting how much of a return they could get on their investment if they only had the money to invest.

Gabe

[chad thomas]

Mabee they would be better off seeking consessions in the next wave of mergers. Mabee they don't have the capitol to do all the projects and upgrades they desire but Michal Haverty is a savy railroader and I think they could manage to build there system into a serious force to be reconed with. It would be cool to see them get access to gateways like Chicago, Atlanta or mabee even Denver/Cheyanne or El Paso and expand western traffic lanes. And what about Memphis, do they get there via Midsouth?

[gabe]

I always wondered why they didn't look into a merger with the ICE. Although they have limited access to the Chicago market now, via their Gateway Western Purchace and Illinois Central haulage rights, I always felt that the ICE was the way to get to Chicago--it would also give them access to Minneapolis. That would be a heck of a railroad.

Now, I realize the short answer to my question is that the ICE needs a lot of work--but so does/did the Gateway Western. I also believe KCS could direct a lot more traffic onto the ICE.

Now the my beloved IC, underdog, has gone via mergers, KCS is my new underdog railroad that I wi***he best for. I often wonder if KCS, DM&E and ICE is a pipe dream of mine or has any real possibilities.

I am not sure as to whether KCS has access to Memphis.

Gabe

[chad thomas]

Inferacanineophilia... Rooting for the underdog railroad. I'm not sure who came up with it. I read it an a 70's issue of Trains. It might have been David P Morgan or John Kneeling (the professional iconoclast) that said it. I tend to do the same thing.

I too have thought about the possibilities of a KCS/DM&E merger. But dosen't the DM&E now own the ex Milwakee track to Chicago that the Soo sold a few years back (I&M Raillink)?

[gabe]

QUOTE: Originally posted by chad thomas

Inferacanineophilia... Rooting for the underdog railroad. I'm not sure who came up with it. I read it an a 70's issue of Trains. It might have been David P Morgan or John Kneeling (the professional iconoclast) that said it. I tend to do the same thing.

I too have thought about the possibilities of a KCS/DM&E merger. But dosen't the DM&E now own the ex Milwakee track to Chicago that the Soo sold a few years back (I&M Raillink)?

Yeah, that is the ICE connection I was talking about, which would make the whole thing work.

Gabe

[chad thomas]

I think they would be a good fit myself. Coal & chemicals. Although I would rather not see the decrease in variety we have these days with so few class 1s & 2s left.

[gabe]

QUOTE: Originally posted by chad thomas

I think they would be a good fit myself. Coal & chemicals. Although I would rather not see the decrease in variety we have these days with so few class 1s & 2s left.

I think the only way either two avoid an eventual CP,CN, UP, NS, BNSF, or CSX takeover is if they find a partner and expand.

Gabe

[Anonymous]

KCS does not have access to memphis as far as I know. But looking at their very rough system map, they may have trackage rights into Memphis on somebody else's track.

http://www.kcsi.com/pdf/system_map.pdf

[chad thomas]

Thanks for the map.

[nanaimo73]

The August 2003 Trains has a 14 page article on KCS with a map showing KCS reaching Memphis through haulage rights with BNSF from Tupelo,which is the long way to go.
It was mentioned above that KCS could merge with DME which has coal. The DME has not done any work on its proposed line into the Powder River Basin yet. A major hurdle is going to be finding a bank which will loan the $2 billion.
DME would haul the coal the coal to Winona, Minnesota where it would then take the IC&E to KC.

www.dmerail.com/Sys%20Map.html

As you can see from the map above, it's a long way from Bill, Wy. to KC. It's about 1,340 miles over DME ( if they build their line ) while the UP mileage is 746 and on BNSF it is 788.[:(]

[chad thomas]

I apologise if I lead anyone to belive DME currently had coal. I know they still have a long way to go before they become a direct PRB player (if ever). The discussion was more about KCS expanding it's system.

[Anonymous]

QUOTE: Originally posted by emeades

I think that this could really be a pretty big coup for either NS or CSX to grab KCS. Think about having acess from everything between the northeast and Mexico City. Though i prefer having grey ghosts here in Texarkana.

It is questionable whether either NS or CSX have the financial ability to take on something the size of the KCS/TFM at this juncture. CSX is scrambling to pay down debt and spin off property as it is. NS has a much cleaner balance sheet but is still carrying a great deal of Conrail acquisition debt.

UP and KCS don't get along well so if there is to be a merger involving KCS I would look at either BNSF or possibly CN.

LC

[nanaimo73]

It looks like in the future BNSF, CN, and NS will be one railroad going against UP, CP and CSX. If that happens, KCS and DME are both going to be in a world of hurt. There does not seem to be enough trackage around for a third railroad to form with KCS and DME. BNSF,CN and NS would each be stronger with KCS but if they get together they won't need KCS. CP may be the best partner for DME, but CP-UP won't need DME.
I think both should be fine if the big guys don't merge. Can you imagine how well CSX-UP would be run ? BNSF-NS would kill them !