Progress Rail buying EMD

[GP40-2]

oltmannd

The H engine was developed for two reasons. One, because it looked the the industry was headed toward 6000 HP AC locomotives and a 20 cylinder 710 didn't look like it could do much more than the low 5000s.

Ok, we all know that the 710 isn't going to make 6000 HP. But think about it. If EMD needed a new engine to make 6000 HP, and they thought the 2 cycle was going to be around for the long term, why not just stick with what they know, and build a larger displacement 16 cylinder 2 cycle? The increasing emissions regulations DID NOT appear overnight. We have known for 20 years this was going to happen. But the fact is they spent a lot of time and money developing a 4 stroke from scratch. Time and money that would NOT be spent to develop a 6000 HP only version. The simple fact is that EMD decided at the time to replace ALL their engines with a version of the H engine. Just like GE has 12 and 16 cylinder versions of the GEVO. The GM financial crisis put that on hold (for now).

oltmannd

Second, because fundamentally, a two stroke can't match a four stroke in efficiency. Fuel efficiency was the name of the game in the 80s and 90s. GE always held a couple of a percent advantage over EMD.

Emissions regs changed the game.

What? Are you saying with the vast increase in the cost of oil (which will continue to increase in cost in the future) that fuel efficiency gains are no longer important? We must be living on different planets. Either that, or NS doesn't care about the bottom line any more. LOL.

As to the first part of your question, perhaps you can show me why you think a two cycle, which needs to uncover inlet ports well before BDC, can have as complete as combustion as a 4 cycle? I never said you couldn't get complete "enough" combustion in a 2 cycle to pass the current regs., I just said it would never have as complete a combustion cycle as a 4 stroke along with lower fuel economy. However, I am willing to keep a open mind on this, and if you can show me concrete data why you believe a 2 stroke can match a 4 stroke, then I will be the first to admit I was wrong.

[GP40-2]

YoHo1975

... and word on the street has been very positive as well.

And what "street" would that be?

[oltmannd]

GP40-2

I never said you couldn't get complete "enough" combustion in a 2 cycle to pass the current regs., I just said it would never have as complete a combustion cycle as a 4 stroke along with lower fuel economy.

Uh, no, that's not what you said.

GP40-2

However, I am willing to keep a open mind on this, and if you can show me concrete data why you believe a 2 stroke can match a 4 stroke, then I will be the first to admit I was wrong.

I would think the clean stack on the 710 vs a dirty stack on the FDL at full throttle is pretty good evidence of who has the more complete combustion.

[GP40-2]

oltmannd

I would think the clean stack on the 710 vs a dirty stack on the FDL at full throttle is pretty good evidence of who has the more complete combustion.

I was talking about the GEVO, not the FDL.

Regardless, you may be surprised that I preferred a 2 stroke back in my younger days (1970's) when I did motorcycle racing. Much better power to weight ratio / weight distribution for track racing. So I have nothing against a 2 cycle, I just think there is a limit to how clean/efficient you can get one. But who knows, with the auto industry pretty much going to turbo charged, direct injection gasoline engines, maybe the 2 cycle will get some serious R&D. Especially with sparkless, homogeneous charge compression technology that essentially gives you a gasoline powered "diesel" engine. All the thermodynamic advantages of a turbo-diesel, without the emission/particulate problems. Might even see this type of engine in a locomotive some day.

[creepycrank]

There is a EPA report on testing ULSD (Ultra Low Sulfur Diesel) fuel on 2 Tier 2 locomotives, GE and EMD respectively. "Particulate Matter Emissions From Tier 2 Locomotives" - Jan 3, 2008 by Joseph Mc Donald, US EPA Office or Transportation and Air Quality. I've got it in my computer files but haven't been able to find it on the internet. Maybe one of you computer experts can. Anyway its 54 pages long but the "Results" on pages 4 thru 7 say that using the ULSD fuel both locomotives are running well within the Tier 3 limits. The data sheets are on page 42 for GE and page 49 for EMD. It also goes by EPA-HQ-OAR-2003-0190-0907.1

[erikem]

GP40-2

As to the first part of your question, perhaps you can show me why you think a two cycle, which needs to uncover inlet ports well before BDC, can have as complete as combustion as a 4 cycle? I never said you couldn't get complete "enough" combustion in a 2 cycle to pass the current regs., I just said it would never have as complete a combustion cycle as a 4 stroke along with lower fuel economy. However, I am willing to keep a open mind on this, and if you can show me concrete data why you believe a 2 stroke can match a 4 stroke, then I will be the first to admit I was wrong.

 

Hmmm.

Combustion should be complete not too long after the fuel injection stops injecting fuel into the cylinder, so that's not much of an advantage of 4 cycle over 2 cycle. What the 2 cycle does lose  is getting work from the further expansion of gas. Also bear in mind that the exhaust valves on an EMD engine close well after the air ports are covered, so the engine ends up having a larger expansion ratio than compression ratio.

While I've seen several references to 4 cycle engines having a slim lead over 2 cycle engines in Run 8, I haven't seen much with respect to differences in the lower notches.

- Erik

[cr6479]

 Progress rail is NOT buying EMD. CAT has just bought EMD

[oltmannd]

GP40-2

I was talking about the GEVO, not the FDL.

Which leads me back to the thought that the differences are largely about the particulars of the engine design and much less about the fundamental differences between 2 and 4 strokes.

[oltmannd]

cr6479

 Progress rail is NOT buying EMD. CAT has just bought EMD

They own Progress Rail and it was this subsidiary of theirs that bought EMD.

[creepycrank]

June 5, 2010 From Marine Log magazine, very carefully worded. "Cat subsidiary buys EMD Caterpillar, Inc. (NYSE:CAT) subsidiary Progress Rail Services has signed a definitive agreement to purchase Electro-Motive Diesel (EMD) for $820 million in cash from Berkshire Partners LLC and Greenbriar Equity Group LLC. On completion of the transaction, EMD will become a wholly-owned subsidiary of Progress Rail. Not too surprisingly the Progress Rail press release announcing the deal focuses on what it means for Cat in terms of penetrating the rail market, though it does mention that EMD is a "a global provider of diesel engines for marine propulsion, offshore and land-based oil well drilling rigs, and stationary power generation." Presumably, under CAT ownership EMD will continue to offer its 710 series in these markets, where its two cycle design has a loyal following."

[carnej1]

creepycrank

June 5, 2010 From Marine Log magazine, very carefully worded. "Cat subsidiary buys EMD Caterpillar, Inc. (NYSE:CAT) subsidiary Progress Rail Services has signed a definitive agreement to purchase Electro-Motive Diesel (EMD) for $820 million in cash from Berkshire Partners LLC and Greenbriar Equity Group LLC. On completion of the transaction, EMD will become a wholly-owned subsidiary of Progress Rail. Not too surprisingly the Progress Rail press release announcing the deal focuses on what it means for Cat in terms of penetrating the rail market, though it does mention that EMD is a "a global provider of diesel engines for marine propulsion, offshore and land-based oil well drilling rigs, and stationary power generation." Presumably, under CAT ownership EMD will continue to offer its 710 series in these markets, where its two cycle design has a loyal following."

 

That is entirely possible, although the CAT series of engines also compete in all those markets. Given that European manufacturers (MTU in particular) are making inroads it might be that CAT will seek to "give the people what they want" and offer both the 4 cycle and 2 cycle (710) familes for those applications..

[creepycrank]

A word about markets. - Up until the time Detroit Diesel switched over to 4 stroke engines they owned the marine auxiliary power market. With the exception of Crowely and the NSF research vessels all the rest used 671 generator engines and Detroit Diesel engines were universal for powering cargo pumps on oil barges. Since that change all their loyal customers deserted DD for Cummins, CAT, and John Deere. MTU(they own DD) is trying to get back that market or hold on what is left by advertising "Reman" DD 149 engines for instance. When I use to work for EMD the unthinkable was that if GE developed a decent 2 stroke engine EMD would be toast. The fact that EMD is different is very important in both rail and power products markets.

[DMNewlin]

Haven't seen anything about the upside down finances in this purchase. 

Progress Rail buys a company with $1.8 BILLION in revenue for $820 MILLION.  Do I have my figures right and, if so, what is wrong with this picture?

It likely means that the current owners have (1) no one else to sell to and (2) want out of the market FAST.

Thoughts?

[YoHo1975]

Um, Revenue and value are not synonymous? The 820 Million represented the value of the assets. Last year's revenue is not this year's asset. GM sold the thing for some say 200Million and they for sure had higher revenue than that in 2005. I'd say this is basic accounting, except that there is no such thing.

[oltmannd]

Revenue and value are not the same thing. Penn Central had lot of revenue, but a value less than scrap. Since EMD was privately held, we have no idea of what the net revenue is, so we can't really guess at the value, other than to know there was a buyer for $820M.

[oltmannd]

GP40-2

oltmannd

Second, because fundamentally, a two stroke can't match a four stroke in efficiency. Fuel efficiency was the name of the game in the 80s and 90s. GE always held a couple of a percent advantage over EMD.

Emissions regs changed the game.

What? Are you saying with the vast increase in the cost of oil (which will continue to increase in cost in the future) that fuel efficiency gains are no longer important? We must be living on different planets. Either that, or NS doesn't care about the bottom line any more. LOL.

No. All I'm saying is that all the fuel efficiency in the world means zilch if you can't pass the emissions std. Emissions comes first. And, the kinds of things you need to do to keep the NOx down effect the fuel efficiency of a four stroke more severely than a two stroke, all other things being equal.

[oltmannd]

GP40-2

As to the first part of your question, perhaps you can show me why you think a two cycle, which needs to uncover inlet ports well before BDC, can have as complete as combustion as a 4 cycle?

Yes. Half as much fuel with 80% of the stroke. Actually, I think it more about the injection event and combustion chamber shape and temperature. As others have mentioned, the game is already won or lost way before you get that far down the cylinder.

[seafarer]

The Wartsila 20 through 64 models are all medium speed 4 stroke engines. The Wartsila RT models are all slow speed 2 stroke engines designed and built by the former New Sulzer Diesel company, Switzerland, which was taken over by Wartsila in April 1997.

As previously stated, CAT-MaK do not produce any 2 stroke engines. CAT-MaK's engines are all medium speed 4 stroke engines used as ship propulsion and generator plants, and in stationary power plants ashore.

[seafarer]

World wide, there appears to be only three manufacturers of large 2 stroke engines for marine propulsion, as follows:

Makita Corporation: 9 models of 4 to 8 cylinder slow speed engines, with outputs of 1600 to 13,280 kW.

MAN B&W Diesel Group: 67 models of 5 to 14 cylinder slow speed engines, with outputs from 1350 to 87,220 kW.

Mitsubishi Heavy Industries Ltd: 19 models of 4 to 12 cylinder slow speed engines, with outputs from 1120 to 46,800 kW.

There appears to be only one manufacturer of  2 stroke medium speed engines for use aboard ships.

Electro-Motive Diesel Inc: Four models of 8 to 20 cylinder medium speed engines with outputs from 1249 to 3729 kW. They appear to be the only manufacturer of medium speed  2 stroke engines for marine use.

The above information is from "Propulsion, Incorporating the directory of marine diesel engines 2009", published by IMarEST, UK.

[seafarer]

 Sounds like a rather complicated arrangement that would increase both production and maintenance costs unnecessarily.

The application of common rail fuel supply with electronic control of fuel injection is becoming more common aboard ships and I would expect such systems to be applicable to locomotive engines as well. On board my ship, which is diesel electric, the MaK engines use a blast of starting air to increase the speed of the turbochargers when a propulsion drive motor is started. This increases the volume of air available to the cylinders as the electronic governor increases the fuel injection rate, thus reducing the amount of smoke normally produced in such situations. When paralleling generators, the governor software controls the rate at which the incoming engine loads up to reduce smoke levels to near zero. This system of control should be transferable to locomotive engines if they are using electronic governors.

[beaulieu]

Interesting article in Construction magazine ENR speculating that one of the reasons for Cat buying EMD is as a source of electric drive components for the large construction machinery. According to the story the wave of the future for large construction machinery is going to be electric drive. Cat has introduced the D7E Bulldozer with all electric drive as the first of a complete replacement of all the large equipment line.

[carnej1]

beaulieu

Interesting article in Construction magazine ENR speculating that one of the reasons for Cat buying EMD is as a source of electric drive components for the large construction machinery. According to the story the wave of the future for large construction machinery is going to be electric drive. Cat has introduced the D7E Bulldozer with all electric drive as the first of a complete replacement of all the large equipment line.

 

That is a good point. Cat is also in the process of developing AC electric drive systems for their big mining trucks (which are currently all mechanical drive) and reportedly for their biggest scraper models as well...

[nanaimo73]

This article talks about Caterpillar possibly moving construction of locomotives into the United States.

http://www.chicagobusiness.com:80/cgi-bin/article.pl?article_id=33571

[samfp1943]

nanaimo73

This article talks about Caterpillar possibly moving construction of locomotives into the United States.

http://www.chicagobusiness.com:80/cgi-bin/article.pl?article_id=33571

Dale's linked article is pretty interesting.

FTA: "...The acquisition by Caterpillar could complicate Illinois' hopes of winning an expansion. After years of bruising contract battles with the United Auto Workers at Illinois plants from Aurora to Decatur, Caterpillar in recent years has favored building new U.S. factories in non-union states such as Arkansas and Texas. Although Electro-Motive will continue to be run by McCook-based CEO John Hamilton, it will be part of Caterpillar's Alabama-based Progress Rail Services division, which repairs railway equipment and is largely non-union..."

 The article mentions as well that an unattributed spokes person for the State of Illinois says it will fight aggressively for the jobs ( what else you one expect them to say?)

Anyway with a number of automotive manufactures moving into Alabama in recent years, an extrapolation of a similar scenario might be that Caterpillar/Progress Rail (already an Alabama resident) might very well consider a move to Alabama as well. My conjecture.

Auto Industry currently in Alabama:  http://www.edpa.org/industries/automotive.html

Mercedes-Benz 

Honda

Hyundai

and the link estimates estimates  350 adjunct suppliers there as well.

For what it is worth, there you have it.  Lots of meat ther to be gnawed on in these Threads.  

[greyhounds]

Well, I'll try to answer this without getting political.

But, for years Illinois has had a government/cultural climate that is anti business in general and anti heavy industry in particular.  If you want to open a law office you're welcome.  If you want to open a facility to develop and test diesel engines, you're not.  (As Navistar just experienced when they tried to open an engine development/test facility in the Chicago suburb of Lisle. They eventually gave up promting the Chicago Tribune to run an editorial "Why We've Got 10.7% unemployment.")

The current governor has made a career of bashing "These Big Corporations."  I'll leave it at that.

But the "Big Corporations" can take the hint and also leave because of that.

Despite this, Caterpillar does have strong Illinois roots and is making a small expansion at its Aurora, IL facility that will add all of 300 jobs over three years.  I don't think Illinois is out of the question for new locomotive builds, Cat could always get a sweatheart deal from the state.

I can't see Cat opening up in Illinois to get passenger engine contracts.  They're going to be small potatoes.

[Paul_D_North_Jr]

As long as the Canadian plant has the capacity to build enough EMD units to meet the demand, I don't see any real need for EMD to build or buy a US-located facility, except to meet the 'Buy America' requirements for any rail equipment that would be powered by traditional diesel-based locomotives. 

For the handful of such 'Buy American' units, EMD would likely do better to contract out the assembly to a locomotive service company that has done that kind of work already, rather than sink all that money into a potentially redundant and 'stranded' facility - the phrase ''a colossal mis-deployment of capital'' comes to mind.  Progress Rail's various facilities are the obvious candidates, but so are Amtrak's, NS' Juniata locomotive shop in Altoona, the Super Steel or whatever facility in Schenectady, NY, and various others.  Actually, that range of candidates means there could be some competition between them, and perhaps some would have unique advantages, as well as geographic diversity adn flexibility aand potentially being closer to the end users, etc. - all of which just supports the merits of that approach  I would not see a need for another US facility unless the volume reaches over 100 units a year for that market, and/ or the Canadian plant is forecast to be at capacity for the next couple of years.  Neither of those appear likely to occur in the forseeable future. 

- Paul North.   

- Paul North. 

[YoHo1975]

Well, one might hope that Caterpillar is looking forward a bit further than the immediate future. Remember that when EMD shut down LaGrange, they had insufficient facilities to finish the locomotive orders they had. That is why there are a bunch of BNSF units called Mexi-MACs. GE had issues too, but mainly with painting, not assembly. So I don't think it would be fair to Characterize London a sufficient to meet the needs. Now, a lot of work is likely to be ECO rebuilds and THAT could probably be handled out of Paducah and similar facilities.

Motive Power's facility in Boise seems to handle building their passenger engines fine and that's a much smaller facility. So new orders for that type of unit could probably be handled there in a place like Paducah as well.

There is something to be said for Caterpillar and EMD preferring to return to their Illinois roots, but I wouldn't hold my breath and they certainly aren't going to shutter London in the near term.

[samfp1943]

greyhounds

Well, I'll try to answer this without getting political.

But, for years Illinois has had a government/cultural climate that is anti business in general and anti heavy industry in particular.  If you want to open a law office you're welcome.  If you want to open a facility to develop and test diesel engines, you're not.  (As Navistar just experienced when they tried to open an engine development/test facility in the Chicago suburb of Lisle. They eventually gave up promting the Chicago Tribune to run an editorial "Why We've Got 10.7% unemployment.")

The current governor has made a career of bashing "These Big Corporations."  I'll leave it at that.

But the "Big Corporations" can take the hint and also leave because of that.

Despite this, Caterpillar does have strong Illinois roots and is making a small expansion at its Aurora, IL facility that will add all of 300 jobs over three years.  I don't think Illinois is out of the question for new locomotive builds, Cat could always get a sweatheart deal from the state.

I can't see Cat opening up in Illinois to get passenger engine contracts.  They're going to be small potatoes.

This is kind of interesting as far as Engine Manufactury goes :

http://www.edpa.org/docs/Auto-Engine-Plants-in-Alabama.pdf

Specifically on the list linked is a Navistar facility went to Huntsville, Al. Navistar builds some engines in Melroase Park,Il, Indianapolis,In and Huntsville,Al.  The curious might find this link of interest( about Navistar)

From Greyhounds Post: (As Navistar just experienced when they tried to open an engine development/test facility in the Chicago suburb of Lisle. They eventually gave up promting the Chicago Tribune to run an editorial "Why We've Got 10.7% unemployment.")

Those interested might find this link of interest:

http://ir.navistar.com/releasedetail.cfm?releaseid=54636