Article in Monday's (July 14, 2014) Wall Street Journal (appears to be generally available, even though otherwise mostly a 'pay site'):
http://online.wsj.com/articles/caterpillar-falls-behind-ge-in-locomotives-race-1405291739
The worst part is that EMD appears to be essentially looking at - and accepting ?!? - 2 years (2015 and 2016) with no domestic sales. What market share will be left for it after that absence ?
There's also a discussion of this underway on the Locomotives Forum here, on Page 2 of the current "TIER IV" thread, at:
http://cs.trains.com/trn/f/741/t/230712.aspx?sort=ASC&pi332=2
- Paul North.
overallPaul, This may be a stupid question, but, can General Electric just step in and fill the gap? Have they got a locomotive model that is Tier IV compliant?
GE is ahead of EMD but does not yet have a Tier IV certified locomotive. The problem is to keep the locomotive meeting Tier IV standards for 750,000 miles. GE locomotives meet Tier IV when they leave the factory, but so far they have failed at some point. So they keep working on them.
I thought they both had emissions credits built up that would allow them to delay implementation past the deadline? Read that at a few places, If true, that will hopefully help minimize the interruption.
Might help spur Eco sales if it doesn't just drive customers away as customers rebuild more in lieu of new locomotives.
beaulieu overallPaul, This may be a stupid question, but, can General Electric just step in and fill the gap? Have they got a locomotive model that is Tier IV compliant? GE is ahead of EMD but does not yet have a Tier IV certified locomotive. The problem is to keep the locomotive meeting Tier IV standards for 750,000 miles. GE locomotives meet Tier IV when they leave the factory, but so far they have failed at some point. So they keep working on them.
750K sound like a awful lot of mileage - Last I was aware my carriers high mileage engines - as a group were getting approximately 300 miles per day (use on mineral & bulk commodity trains, intermodal trains, merchandise trains, work trains and the layovers between uses) - in such use 750K is over 6.75 years (other carriers mileages may vary).
Never too old to have a happy childhood!
Railroads can rebuild locomotives up to a point. I would not be surprised if there is more regulation prohibiting it if it is used to get around the regulations on a large scale.
The bigger concern that I see is for those (almost all) railroads needing more new locomotives, but with only 1 supplier that is capable of meeting the requirements ==> monopoly scenario, and then market power, pricing, and so forth. I can't imagine any railroad's purchasing or motive power officers would like that very much - having only 1 vendor for such a large and costly asset class. Likely reaction to avoid or mitigate that will be more rebuilding by those railroads with the in-house capabilities to do that, or "out-sourcing" of same to the handful of small rebuild shops. It may make keeping EMDs running more valuable as a 'next best' alternative to buying even more new GEs - that might mean more parts sales, which could help tide EMD over until its new Tier IV-compliant locomotive is ready to sell.
As I understand it, the railroads have about 6 months of emission credits, so they can push the deadline back. The question is when in 2017 EMD will be back in production. (They will be constructing export locomotives during this time period). And in all likelihood, there will be issues with the Tier IV GEs, too. Remember the fuel line fires with the Tier III models? Railroads may slow down their orders for GEs until the bugs are fully worked out. We'll have to see.
BaltACD 750K sound like a awful lot of mileage - Last I was aware my carriers high mileage engines - as a group were getting approximately 300 miles per day (use on mineral & bulk commodity trains, intermodal trains, merchandise trains, work trains and the layovers between uses) - in such use 750K is over 6.75 years (other carriers mileages may vary).
Yes the "Economic Lifetime" of the diesel engine is until the diesel engine must have a heavy overhaul, it is way more than the warranty period.
Further more each year during that "lifetime" a specified percentage of the locomotives must be tested for compliance, any locomotives that fail must be brought back into compliance before they can resume service, and if too many fail then certification for all locomotives of that model can be lost.
I heard through the mill that the GE Tier IV test engines did not do well in the tunnel tests on Donner Pass. Still more 'tweaking'?
In desperation, maybe DEF will need to be done as much as the railroads want to avoid it. My understanding is about 250-300 gallons of a 5000 gallon fuel tank will need to be partitioned off. I have heard the truck industry lost 1 MPG with this solution. Any estimates how this might affect the rail industry?
Jim
Modeling BNSF and Milwaukee Road in SW Wisconsin
I should mention that the "Economic Lifetime" was chosen by the locomotive builders, they could have chosen 500,000 miles, but that would have meant that the railroads would have to do heavy overhauls at 500k miles, that wouldn't fly well with the Railroads.
jrbernier I heard through the mill that the GE Tier IV test engines did not do well in the tunnel tests on Donner Pass. Still more 'tweaking'? In desperation, maybe DEF will need to be done as much as the railroads want to avoid it. My understanding is about 250-300 gallons of a 5000 gallon fuel tank will need to be partitioned off. I have heard the truck industry lost 1 MPG with this solution. Any estimates how this might affect the rail industry? Jim
EDIT: picture not working...
DEF would require updated servicing areas, and a method of transport when the locomotives are being fueled by truck. Because of the loss of fuel economy, EMD and GE may to find another location for the tank?
Randy Vos
"Ever have one of those days where you couldn't hit the ground with your hat??" - Waylon Jennings
"May the Lord take a liking to you and blow you up, real good" - SCTV
Paul_D_North_JrThe worst part is that EMD appears to be essentially looking at - and accepting ?!? - 2 years (2015 and 2016) with no domestic sales. What market share will be left for it after that absence ?
Of course, EMD/Cat are just hoping/guessing that they will have a viable product in 2017. After all, they earlier were hoping that they would be delivering Tier 4 locomoties in Fall 2015, according this this Railway Age article from 2012:
http://www.railwayage.com/index.php/mechanical/locomotives/emd-gets-metrolink-tier-4-locomotive-order.html
EMD was confident enough in 2012 about their delivery capability that they sold MetroLink those Tier 4 locomotives, but obviously EMD guessed wrong about their real timeline.
Metrolink is still adding to the order though - whenever they finally show up: http://www.metrolinktrains.com/news/news_item/news_id/899.html
What if 2017 rolls around and EMD still hasn't figured it out?
The F125 isn't using the 710. Tier 4 isn't a significant issue with the power plant going into it.
The F125 will use the C175, which does require urea.
The Metrolink locomotives have the CAT C175 engine instead of the EMD 710 engine. As is typical of high speed diesels it has to use all the after treatment junk to meet tier 4. Since commuter locomotives always stay close to home they they can fill the DEF tank several times a day if necessary and take care of all the problems high speed diesels have if you run them too hard.
The real problem with tier 4 is NOx emissions. High temperature and high pressure in a diesel are what you try to achieve in a diesel for maximum thermal efficiency. With out a catalyst in the exhaust the designer will have to reduce power and efficiency to reach the goal.
So what if the Metrolink locomotives have a Cat DEF style engine? EMD can't even deliver those on time! If you look at the articles I linked in my first post, the delivery date of the first MetroLink Tier 4 locomotives has slipped from Fall 2015 to 2017.
Why should a customer expect that EMD can actually hold to whatever timeline they say today?
While I seem to be some foamer who makes obsolete references, there is one logical thing that I would like to point out, and that's what may happen if a lemon appears in the GE catalog.
suppose EMD never wakes up, and GE is responsible for about 85% of new locomotive production, with (re)builders like Brookville and motive power industries taking up the remaining 15% of the market.
if, and this is an if, GE makes an engine with a few problems that are hard to fix, which builder would step in to fill the void? Could a little builder like MPI do a few hundred engines a year?
a better example may be if EMD and GE never made 4,400 horsepower engines, and they both stuck to the high power-higher repair prime movers, with no Convertibles or 80 macs.
just remember, it is an if, but it might be true...
ML
I think that the new tier 4 locomotives will be such maintenance head aches that all the existing will be run through the remanufacturing process forever. EMD has a big lead here, remember all those GP7 that are still out there.
Sure, a pretty big and apocalyptic speech, but Then again, I've seen some pretty far out model railroads. It is at least sort of comforting to know that there will always be some competition against the giant.
fact of the day : there are more alco C424's and C425's than U25B's and U25c's in active revenue service. the GP7 prediction is a good one, But it is noteworthy that while they are getting old they age well, while other engines age about as well as Disco.
"Mom, whose orange pants are these?"
A foreign builder might step in, too - Bombardier and Siemens come to mind - but there may be others that have the necessary technology from Europe or Japan, and a robust enough machine, reputation, and reliability in the North American market (traditionally the toughest).
Speaking clock fact of the day : there are more alco C424's and C425's than U25B's and U25c's in active revenue service.
fact of the day : there are more alco C424's and C425's than U25B's and U25c's in active revenue service.
This thread still has not covered the basic question. Should I buy Cat stock? Or short it?
snark/on
LensCapOn Speaking clock fact of the day : there are more alco C424's and C425's than U25B's and U25c's in active revenue service. There are U25's in active duty, anywhere?? This thread still has not covered the basic question. Should I buy Cat stock? Or short it? snark/on
There are U25's in active duty, anywhere??
LensCapOn Speaking clock fact of the day : there are more alco C424's and C425's than U25B's and U25c's in active revenue service. There are U25's in active duty, anywhere??
He didn't say that they were. Quite the opposite.
But their survival rates aren't really a fully accurate illustration of quality back then.
While likely true that Alco built a somewhat better locomotive while GE quickly took hold of 2nd place in the US market largely thanks to less tangible factors like superior support and motive power heads viewing GE's future as more promising and one worth nurturing, I think their survival rates hinged primarily on a single fact.
When it came time to dump an aged Alco or GE after its 15 years or so of use back then, familiarity with Alcos by shortlines and what we'd now term as regionals played a huge factor in the long 2nd lifes that many enjoyed.
Alco was an established player in the secondary marketplace, GE wasn't. So while the FDL might've not aged as gracefully as a 251 and perhaps parts support was a problem (Which probably wouldn't had been the case had they found 2nd homes en masse like retired Geeps and Alco switchers before them did), I think familiarity with Alcos on small railroads across the country more than anything won the day for those newer examples from the 1960's that lived on while GE's Universal line quickly disappeared.
There are only so many homes out there for retired locomotives off Class 1's. Alco's legacy largely won the day for the Centuries and such that are still out and earning their keep in 2015, that survived being cast off by their original owners.
Yeah, about the stock, I'd say that if a foreign road ( one not in North America) purchases some power , I would get a few shares.
remember, cat is still active in the construction industry.
I was in the stock market game, and the only reason why we didn't win was because one count him ONE nimrod invested in pothash corporation in the middle of winter. but stock in one company saved us.
any guesses?
rvos1979Funny thing was, Cat decided that they couldn't build a truck engine that would meet emissions, and left the market. The next couple years should be interesting.......
A little more correctly, Cat didn't decide they couldn't build a truck engine that would meet tier 4, they decided it wasn't worth the development costs to build a truck engine to meet tier 4 with so much competition in the market.
Before anyone decides I am one of those who bleed Cat yellow when cut open, let me assure you, I am far from a Cat fan for most of their products.
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