I worked for the Soo, CP, I&M Rail link and currently work for the ICE . When I found out last night at 0200 I couldn't believe it!!!!!!!! I Hope we get the conductor craft back. I trained in Pigs eye back in 1996 and was a qualified conductor. Then they sold us and everone took a $12 a day pay cut and removed the conductor craft. It was hell ever since. I know alot of employees have protection agreements in place and the ICE is very strong about keeping us protected. I hope it's all wrapped up in 6 months. Alot of us have been beaten prior to the ICE and worry that not much will change. I hope alot changes, we deserve a class1 status.
I would love to find a link to their T&E and Yardmasters Contracts Anyone?
Jess
EJE818 wrote:It is kind of too bad that the blue and yellow IC&E and IMRL power will fade eventually, but that progress. Maybe that means the IC&E and DM&E engine will be able to roam the CP system, which I really wouldn't mind at all. Another good thing is maybe CP will be be able complete the PRB project faster then the DM&E would have done.
I said the same thing when I saw ex-MILW Bandits in Portage, WI about 7 years ago, but I still see them. CP has never been known for re-painting merger engines. I saw a picture of a CP train in Oconomowoc, WI with two engines in the consist, a CP and a SOO. They had the exact same roadnumbers. I wouldn't expect to see any of the power on the DM&E to get re-painted.
Same thing goes with MOW equipment. There is still a Jordan spreader and a Russell plow in Thieft River Falls, MN, and both are still in SOO paint and numbers. Also, Portage has a SOO-Milwaukee system push plow. When CN gets MOW equipment, they just scrap it.
I am curious about the CP SD40-2's that DM&E owns. Maybe someone was thinking ahead...
Phil
Dakguy201 wrote: I'm puzzled.This is not the first time I've seen a reference to the DM&E being a connection to KCS at Kansas City. As far as I am aware, the southmost point the DM&E achieves is Manley Iowa (or perhaps Mason City) on trackage rights on the UP.
I'm puzzled.
This is not the first time I've seen a reference to the DM&E being a connection to KCS at Kansas City. As far as I am aware, the southmost point the DM&E achieves is Manley Iowa (or perhaps Mason City) on trackage rights on the UP.
Heartland to Albert Lea via UP's Heartland sub., then south to Mason City via the Albert Lea sub. Even that will not last much longer. DME/ICE are one in the same as far as cars moving on either line. Anything on DME goes to ICE, Mason City, then east to the River before going south again to KC.
Dakguy201 wrote: I think the KCS connection being discussed is the IC&E line that runs down the Mississippi and then southwest from Muscatine. Even assuming DM&E has rights over that line, for any shipment originating or terminating in the Dakotas (or Powder River), it is very much the long way around. Both the UP and the BNSF have routes that are much shorter.
My figures show almost 600+ miles more from the PRB to KC via DME/ICE versus UP's route via the Marysville to KC. Not even close to being competitive as far as coal.
CP feeds lots of traffic to UP every day out of St. Paul for Ft. Worth, and DME interchanges most all their traffic for the south to UP at Mason City. It has been my experience that most of the traffic ends up at customers on UP's lines anyway. UP's Spine line can out run the ICE line to KC by almost a day. And CP's traffic from St. Paul does not sit in some yard on UP. The train only works one station all the way to FTW. In most cases, by the time the ICE gets to KC to interchange their cars out of St. Paul, the cars leaving about the same time on UP have almost arrived in McAlester, OK. The customer will be the final guage of what goes where off the DME.
Lets see. Initial cost of DME purchase is $1.45 billion. With something of a $1 billion by 2025 if the coal line is built. I forget the exact wording of that proviso. None the less, add to that the estimated $6 billion to complete the PRB project, and you are talking about some serious money. DM&E was not able in the ten years since they announced this project to come up with the funds. Everyone told me what a "Hot Prospect" this was going to be. I have said in the beginning, show me the money. It never appeared. Also remember, the DME was run by a lawyer who had no previous experience in running a railroad. His underlings did. His purchase of the IMRL assets was a prime example of how he handles things. So after blowing $40 million on this proposed project (they needed a loan from the FRA to pay off the debt incurred in jumping through all the hoops), he will probably end up with a Gold Parachute.
RRKen wrote: EJE818 wrote:It is kind of too bad that the blue and yellow IC&E and IMRL power will fade eventually, but that progress. Maybe that means the IC&E and DM&E engine will be able to roam the CP system, which I really wouldn't mind at all. Another good thing is maybe CP will be be able complete the PRB project faster then the DM&E would have done. Lets see. Initial cost of DME purchase is $1.45 billion. With something of a $1 billion by 2025 if the coal line is built. I forget the exact wording of that proviso. None the less, add to that the estimated $6 billion to complete the PRB project, and you are talking about some serious money. DM&E was not able in the ten years since they announced this project to come up with the funds. Everyone told me what a "Hot Prospect" this was going to be. I have said in the beginning, show me the money. It never appeared. Also remember, the DME was run by a lawyer who had no previous experience in running a railroad. His underlings did. His purchase of the IMRL assets was a prime example of how he handles things. So after blowing $40 million on this proposed project (they needed a loan from the FRA to pay off the debt incurred in jumping through all the hoops), he will probably end up with a Gold Parachute.
All right, here's a dumb question; (I always get DM&E and IC&E mixed up) which one wants to go into the Powder River Basin?
EDIT: Answeared in above post.
Union Pacific Corp. and Burlington Northern Santa Fe Corp., the two largest U.S. railroads, probably will challenge Canadian Pacific Railway Ltd.'s purchase of Dakota, Minnesota & Eastern Railroad Corp., an analyst said.
"They would probably lose the regulatory fight, but they would just be playing for time and could delay approval for up to one year," Rick Paterson, a UBS Securities analyst based in New York, said Wednesday in a note to investors. The acquisition must be reviewed by the U.S. Surface Transportation Board.
DM&E has been trying to expand into Wyoming's Powder River Basin coal fields, where Union Pacific and Burlington Northern are the only railroads with access. U.S. regulators in February rejected closely held DM&E's application for a $2.33 billion loan to build a rail line into the region.
Canadian Pacific's planned $1.48 billion purchase of DM&E, announced last night, is a long-term "negative" for Union Pacific and Burlington Northern, Paterson said in his note. He rates Omaha, Nebraska-based Union Pacific a "buy" and Fort Worth, Texas-based Burlington Northern a "neutral."
Union Pacific spokesman James Barnes said he couldn't comment on whether the railroad will challenge the acquisition. Burlington Northern is "not in a position to speculate on it right now," spokeswoman Mary Jo Keating said.
Union Pacific shares fell $3.76, or 3.3 percent, to $108.79 at 3:04 p.m. in New York Stock Exchange composite trading. Burlington Northern declined 46 cents to $82.44. Calgary-based Canadian Pacific dropped C$2.72, or 3.7 percent, to C$70.75 on the Toronto Stock Exchange.
Coal is the largest single product shipped by both Union Pacific and Burlington Northern. Union Pacific said 61 percent of the coal it moved in August came from the Powder River Basin, where the two railroads share a joint line to ship the fuel east to electric utilities.
The purchase probably would lower coal-hauling rates from the region for the utilities, which might mean less revenue for Union Pacific and Burlington Northern, said Jason Seidl, a New York-based analyst for Credit Suisse. He rates both railroads "outperform."
Seidl said he expects U.S. regulators to approve the transaction.
When Canadian Pacific becomes established in the Powder River Basin, "you're not going to be able to get some of the growth rates you've had in the past," he said. DM&E under Canadian Pacific ownership could haul 25 million tons of coal a year as soon as 2012, he said.
Union Pacific's Barnes said an average coal train for the railroad hauls 14,900 tons.
U.S. railroads won't feel the effect for several years after the purchase of Sioux City, South Dakota-based DM&E is completed, because of the time needed to get regulatory approval and finish construction of a new line, Bear Stearns & Co. analyst Edward Wolfe said in a note to investors.
"DM&E has always represented a potential threat," Wolfe said in the note. "Our sense is that today's announcement brings this threat much closer to a reality but that it likely remains 3-4 years out (after STB approval and build out) at the earliest before CP/DM&E could take meaningful share."
Wolfe, who is based in New York, rates Union Pacific and Burlington Northern both as "peer perform."
Union Pacific "has had a right of first refusal to purchase the DM&E since it acquired the Chicago & Northwestern in 1995," Barnes said. "Subsequently, Union Pacific concluded that regulatory agencies would not allow a purchase of the DM&E by Union Pacific and therefore took steps to ensure that this right didn't interfere with the DM&E's opportunity to attract financing or investors."
So if the purchase of the ICE doesn't work out for the CP, does that mean they're going to sell it to the MRL?? Just my gut feeling that the CP is more interested in the ethanol traffic than the possibility of future coal traffic from the PRB if, an when, an extension is ever built. The UP & BNSF might have tolerated a smaller regional invading their PRB turf, but another class I?
CC
Postbulletin.com: DM&E sale seen as a 'fresh start' by Rochester leaders
The sale of the Dakota, Minnesota & Eastern Railroad to Canadian Pacific Railway is Rochester's and Winona's chance for a fresh start, local officials say.
"We think this is a new opportunity," said Mayo Clinic spokesman Chris Gade. "A new set of owners that will, hopefully, be responsive to the needs of our community and other communities along the line."
Canadian Pacific announced the $1.48 billion transaction late Tuesday. The deal, scheduled to close in the next 30 to 60 days, includes added incentives for completion of DM&E's planned expansion into Wyoming's Powder River Basin coal territory.
DM&E and CP intersect in Minneapolis, Chicago and Minnesota City, just north of Winona.
Serious concerns over projected train traffic increases from the Powder River Basin expansion remain, but local officials say they intend to set aside the old enmity with DM&E when they make the first call to CP, said Rochester City Council President Dennis Hanson.
"For us to extend a hand for a good handshake to get off on the right foot is pretty important," Hanson said.
Winona Mayor Jerry Miller described Canadian Pacific as easy to work with -- "a lot better than any other railroad, I feel, in our area here."
Winona contacted CP about two to three weeks ago, Miller said, after news reports that it was trying to buy DM&E.
"To me, it just made sense then that the Canadian Pacific would make a viable match," he said.
Miller believes the purchase gives Winona the right, finally, to ask for mitigation. Before, the city was thwarted in its requests because DM&E does not actually enter the town, although its traffic passes through on other railroads' lines.
"Now, we should have a little bit of clout in this deal," Miller said.
DM&E President and CEO Kevin Schieffer could not be reached for comment this morning. Rochester officials believe the sale means they have seen the last of him -- and if so, it's a fact they'll celebrate. The war of words between Schieffer and local officials was often scathing and personal, and the chance of a deal between the two sides seemed bleak.
"Frankly, (Canadian Pacific) can't be more difficult to deal with than Mr. Schieffer has been," said Ken Brown, an Olmsted County commissioner. "Nobody has been more difficult than Mr. Schieffer."
Rochester Coalition Statement:
ROCHESTER, Minn., Sept. 5 /PRNewswire/ -- We are encouraged by the Canadian Pacific's acquisition of the Dakota, Minnesota and Eastern Railroad (DM&E) and we look forward to meeting the railroad's new owners.
As proposed, the DM&E rail expansion remains a major concern for our community and the railroad's acquisition doesn't change our commitment to protecting the people of Rochester and the patients and staff at Mayo Clinic.
Several major obstacles must be addressed before the rail expansion project moves forward, including litigating complex eminent domain challenges in South Dakota and Wyoming, completing an environmental impact review on DM&E's critical Iowa line, solving bypass issues in Mankato, Minn., and Pierre, S.D., and reaching mitigation agreements with the cities of Brookings, S.D., and Rochester, Minn.
The Rochester Coalition represents the city of Rochester, Olmsted County, the Rochester Area Chamber of Commerce and Mayo Clinic. For more information, visit http://www.dmetraintruth.com.
deepspire wrote:BNSF, Union Pacific may challenge railroad merger | Dallas Morning News....DM&E has been trying to expand into Wyoming's Powder River Basin coal fields, where Union Pacific and Burlington Northern are the only railroads with access. U.S. regulators in February rejected closely held DM&E's application for a $2.33 billion loan to build a rail line into the region.....\
....DM&E has been trying to expand into Wyoming's Powder River Basin coal fields, where Union Pacific and Burlington Northern are the only railroads with access. U.S. regulators in February rejected closely held DM&E's application for a $2.33 billion loan to build a rail line into the region.....\
This statement is a bit misleading. It appears right after the paragraph stating the acquisition must be approved by the STB and thus implies that the STB rejected the loan application. Of course, we know the loan application was rejected by the FRA and the FRA has nothing to do with the STB approval.
The $6 billion bandied about in the last year included the FRA loan to expand to the PRB and upgrade the rest of the line to carry the traffic and weight increase; and it undoubtedly included investment in motive power strong enough to haul the coal. With the CP acquisition, the motive power costs would not necessarily be so great - CP might well be able to efficiently move locomotives around so that fewer new ones would need to be purchased. CP might also have less expensive in-house MOW capacity, or might be able to get better pricing for the work.
I look at the proposed acquisition as a lot more than just CP access to the PRB - though that in itself can be a big deal: As was mentioned above, CP can transport the coal all the way to Philly.
CP currently hauls intermodal trainloads of imports from Vancouver to the east, including Chicago. In Chicago, the loads move to NS, CSX or south on CN.
CP can now pick up intermodal - and a whole lot of other stuff - in Kansas City and move it across their system. That would mean shipments from LA/Long Beach could be picked up in KC instead of Chicago for delivery in Toronto and Montreal. Tons of stuff from the South and Southwest (and Mexico) destined for Winnipeg and Calgary and Vancouver - or anywhere else in Canada - won't have to go through Chicago via BNSF/UP but can be picked up from KCS (or BNSF/UP) in Kansas City
CP will increase their options exponentially with this acquisition - with or without the PRB.
deepspire wrote:BNSF, Union Pacific may challenge railroad merger | Dallas Morning News U.S. railroads won't feel the effect for several years after the purchase of Sioux City, South Dakota-based DM&E
U.S. railroads won't feel the effect for several years after the purchase of Sioux City, South Dakota-based DM&E
Thanks to Chris / CopCarSS for my avatar.
beaulieu wrote: .....The money amounts quoted by Murphy Siding are conditional hedges of the purchase price for DM&E. If the hurdles to constructing the PRB line are too high, then the CP will pay less for the DM&E. Make no mistake the PRB is the main prize in all this, .....
Murphy Siding wrote: beaulieu wrote: .....The money amounts quoted by Murphy Siding are conditional hedges of the purchase price for DM&E. If the hurdles to constructing the PRB line are too high, then the CP will pay less for the DM&E. Make no mistake the PRB is the main prize in all this, ..... That is really an interesting thing, if you stop to think about it. CP pays another $1B, if it can get into the PRB by a certain date. Yet, the ones who hold the key to getting there now, are CP! It makes for a somewhat weird setup to me. I wonder is CP didn't feel they had to buy DM&E before somebody else did?
Chris30 wrote: So if the purchase of the ICE doesn't work out for the CP, does that mean they're going to sell it to the MRL?? Just my gut feeling that the CP is more interested in the ethanol traffic than the possibility of future coal traffic from the PRB if, an when, an extension is ever built. The UP & BNSF might have tolerated a smaller regional invading their PRB turf, but another class I? CC
ICE is heavy, or will be heavy with ethanol soon. Plants in Aurora, SD; Janesville, MN; for DME and Welcome, MN; Winnebago, MN; Lyle, MN; Hartley, IA; Charles City, IA; Dyersville, IA for ICE. Much tonnage to be sure. Winnebago is the only small plant on either line. The plant in Welcome, MN will be joint with UP, and UP as well gets a lot of traffic from the Charles City plant via interchange at Mason City. There is still question about the Hartley plant being joint with UP since they have long standing trackage rights up there (the confusion is the exact location of the plant). Seems UP's more direct route to Texas and Mexico is an asset.
petervonb wrote: deepspire wrote:BNSF, Union Pacific may challenge railroad merger | Dallas Morning News ....DM&E has been trying to expand into Wyoming's Powder River Basin coal fields, where Union Pacific and Burlington Northern are the only railroads with access. U.S. regulators in February rejected closely held DM&E's application for a $2.33 billion loan to build a rail line into the region.....\ This statement is a bit misleading. It appears right after the paragraph stating the acquisition must be approved by the STB and thus implies that the STB rejected the loan application. Of course, we know the loan application was rejected by the FRA and the FRA has nothing to do with the STB approval.
deepspire wrote:BNSF, Union Pacific may challenge railroad merger | Dallas Morning News ....DM&E has been trying to expand into Wyoming's Powder River Basin coal fields, where Union Pacific and Burlington Northern are the only railroads with access. U.S. regulators in February rejected closely held DM&E's application for a $2.33 billion loan to build a rail line into the region.....\
Not at all, both the FRA and the STB are regulatory agencies.
Murphy Siding wrote: Arggg!!! They've got their Siouxs mixed up again! It's Sioux Falls, S.D. (my home town), and Sioux City, Iowa! Silly Fort Worth Morning News anyhow!
The easy way to remember which is which is Sioux Falls is the one nearest the North Pole, a difference most apparent in February!
Over to you, Murph, lol
petervonb wrote: The $6 billion bandied about in the last year included the FRA loan to expand to the PRB and upgrade the rest of the line to carry the traffic and weight increase; and it undoubtedly included investment in motive power strong enough to haul the coal. With the CP acquisition, the motive power costs would not necessarily be so great - CP might well be able to efficiently move locomotives around so that fewer new ones would need to be purchased. CP might also have less expensive in-house MOW capacity, or might be able to get better pricing for the work.
The rough breakdown for the project is $3B for track, $1B for locomotives and $2B for the coal cars. It is expected CP will use utility owned cars, thus bringing the project back to $4 billion.
SFbrkmn,
You make a good point, I think CP is indeed looking south in the future. I don't know if how many people remember the article in Trains not too long ago where they were talking about the merger puzzle and KCS and CP came up. The author basically ruled out a CP/KCS merger as the two RR's didn't come anywhere near connecting, so it wouldn't work. The other class 1's with the exception of CN would give too much dominance in the region and likely be denied by the STB. Seems with this merger CP took a giant step toward closer ties with KCS.
Also there is a strong plug on the CP website about their partnerships which allow CP access to Mexico. It's been there for quite a while, only now it seems that CP is a little closer to being able to make it their on their own.
One final thought as someone pointed out, I'm sure CP is eager to get PRB coal moving across it's network. But only a few people have commented on the strong up and coming ethanol market in the region. While not as big a deal as PRB coal, I'm sure that was also a huge factor in helping CP decide.
Indeed, with improved DM&E track, there is a possible upside in this deal for ethanol being shipped out of the farm country. In South Dakota, according to data from the SD DOT (2006 data), there are 14 ethanol plants in operation or close to operation. However, 12 of those are along the BNSF and 2 on the DM&E. I do not have similiar data for Minnesota or the ICE in Iowa/Missouri.
Perhaps some of these plants will be expanded. However, I question how many more ever will be built. With corn north of $3, a plant that looked great using $2.20 corn a few years ago is not such a great deal anymore. Likewise, without the federal subsidy, it is questionable that any plant would be profitable. A lot of research is being done on the production of ethanol from less costly ag products than corn.
My point is that corn based ethanol production may be near its peak, and if I were the CP I would not rely upon it to generate any large increase in traffic.
edbenton wrote:Lets see here STB plan to build into the PRB check approved by the STB check. Cash and finacing ready CHECK. Seeing the MAYO group PUKE and Spew a LATTE all over their papers if you are an employee of the DM&E today PRICELESS. Somethings even Mastercard can not get you it takes a merger to do.
Folks, I'm confused about what the merger will mean for the DM&E / Mayo Clinic / Rochester battle. I thought that the city & clinic were fighting DM&E expansion within Rochester that would expedite DM&E's access to the PRB. Doesn't the merger mean that DM&E / CP trains could just bypass the city?
Just a few things here:
1. UP may want trackage rights from Clinton to KC. I'm told they pay high dollars for rights over the BNSF currently, and BNSF limits them to the amount of trains they can run a day. I dont know why UP would want to give that up, even after building the Edelstein Connection.
2. One ICE manager emailed me they know about as much as us railfans do. They only have received one letter from Schieffer. There was an employee meeting in Sioux Falls for the office folks Wed p.m., not sure what was all said there.
3. CN I'm told was one of the finalists, but DME thought the CP was a better fit.
Only posting from what I hear, take it or leave it.
MILW86A
HankDiggs wrote: Folks, I'm confused about what the merger will mean for the DM&E / Mayo Clinic / Rochester battle. I thought that the city & clinic were fighting DM&E expansion within Rochester that would expedite DM&E's access to the PRB. Doesn't the merger mean that DM&E / CP trains could just bypass the city?
Rochester's only effective weapon to fight the DM&E was lobbying the FRA to turn down the loan request for the upgrades and the Powder River extension. To that end, they hired a whole staff of lobbyists (including the former Majority Leader Tom Dashle). They won that battle, but the presence of CP makes a federally guaranteed loan unnecessary.
I don't believe DM&E has any intention of bypassing Rochester but instead continuing to run right through town. I'm sure they would be willing to discuss a bypass constructed primarily at Rochester's expense.
Murphy Siding wrote: deepspire wrote:BNSF, Union Pacific may challenge railroad merger | Dallas Morning News U.S. railroads won't feel the effect for several years after the purchase of Sioux City, South Dakota-based DM&E Arggg!!! They've got their Siouxs mixed up again! It's Sioux Falls, S.D. (my home town), and Sioux City, Iowa! Silly Fort Worth Morning News anyhow!
I recommend that you SUE!!
LOL...
Couldn't pass that one up...lol...
LC
petervonb wrote: CP can now pick up intermodal - and a whole lot of other stuff - in Kansas City and move it across their system. That would mean shipments from LA/Long Beach could be picked up in KC instead of Chicago for delivery in Toronto and Montreal. Tons of stuff from the South and Southwest (and Mexico) destined for Winnipeg and Calgary and Vancouver - or anywhere else in Canada - won't have to go through Chicago via BNSF/UP but can be picked up from KCS (or BNSF/UP) in Kansas City
I thought that the originating road usually dictated the hand off points to second carriers, arranged so that the originating line got maximum mileage?
For SF Brkman the CP trackage rights were highly conditional, and were created to insure IPSCO built their Steel Mill in Montpelier, IA. At the time that IPSCO was about to build their plant the IMRL was bankrupt and in the process of becoming IC&E, the trackage rights were granted so that IPSCO would have the confidence to build the mill. With IC&E being a sound company the CP could not exercise those rights.
For wyomingrailfan the PRB rights are the jewel in the deal, without them the combined DM&E/IC&E are worth about half of the $1.5 billion. Merging the DM&E into KCS does give access to Chicago, but KCS would have no ability to raise the money to reach the PRB. They had to give NS part ownership of the line known as the Meridian Speedway to NS in order to raise the money to upgrade the line, and like the DM&E had to get a RRIF loan to rebuild trackage known as the Macaroni Line (Rosenberg to Victoria, TX) which will improve access to their subsidiary Texas-Mexican Rwy. and thence Mexico. Unlike the DM&E the KCS got their loan.
Not much mentioned is that as part of the deal CP is taking on $350 million in DM&E debt, over and above the $1.48 billion purchase price.
beaulieu wrote: For wyomingrailfan the PRB rights are the jewel in the deal, without them the combined DM&E/IC&E are worth about half of the $1.5 billion.
For wyomingrailfan the PRB rights are the jewel in the deal, without them the combined DM&E/IC&E are worth about half of the $1.5 billion.
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