I don't understand why anyone thinks he would want CP. He's already wrung out all he can out of them. That was why it was speculated he wanted CSX in the first place. Might as well say he'll want to merge NS with CSX since he went after them once too.
His slash and burn strategy reminds me of what John Kneilling once said on how the railroads should conduct themselves in a dying industry. Use up the physical plant/equipment and get all the money you can before it bites the dust.
Jeff
kbgw49- Brilliant. Spot on genius. Count on it. EHH should get you on board.
RME's suggested name of Super C's is pretty good but I'm sure the Santa Fe part of BNSF would put a kibosh on that, just because they could.
The only way to make it palatable to you fellow's ( Americans) is to ditch the "Canadian" part, how about Seaboard Pacific, suggesting both coasts or CBoardPacific,..naw that sucks,....International Pacific...mmm, better, still sucks....National Pacific... cheese off CN and satisfies both countries.
Have to somehow incorporate the Eastern seaboard with the very railroad-y "Pacific".
Canadian Pacific is sacred up here, but we are nice folks and can take it..it won't matter because everyone up here will still call it Canadian Pacific or CP or CPR anyway.
n012944 Shadow the Cats owner If anything CSX under EHH will sell the old Rock Island line they run to the Iowa Interstate that line has 2 trains a day one each way serves nothing but loose car customers and is low density for the CSX. Heck Iowa Interstate runs more trains on it than CSX does that tell you anything. No, the Iowa does not run more trains a day than CSX does on the New Rock. A busy day for the Iowa is two trains a day each way. CSX runs one freight train a day between Chicago and Ottawa, along with about 12 locals a day and several sand trains a week. Also, I really doubt the line is going anywhere. It is also one of the top earners in money per mile on the CSX system. Lots of chemical and the already mentioned sand traffic.
Shadow the Cats owner If anything CSX under EHH will sell the old Rock Island line they run to the Iowa Interstate that line has 2 trains a day one each way serves nothing but loose car customers and is low density for the CSX. Heck Iowa Interstate runs more trains on it than CSX does that tell you anything.
If anything CSX under EHH will sell the old Rock Island line they run to the Iowa Interstate that line has 2 trains a day one each way serves nothing but loose car customers and is low density for the CSX. Heck Iowa Interstate runs more trains on it than CSX does that tell you anything.
No, the Iowa does not run more trains a day than CSX does on the New Rock. A busy day for the Iowa is two trains a day each way. CSX runs one freight train a day between Chicago and Ottawa, along with about 12 locals a day and several sand trains a week. Also, I really doubt the line is going anywhere. It is also one of the top earners in money per mile on the CSX system. Lots of chemical and the already mentioned sand traffic.
Did CSX actually ever buy the exRI or is it still leased? As I recall, it was a 50 year lease with options to extend. Seems like I heard something about it, besides handing over operation on parts of it to IAIS. I just don't remember.
Reasons to eventually go after a merger with CP if you are EHH:
1. It is a lot easier to come up with $30 billion to purchase CP than for UP or BNSF to come up with $60 billion to buy CSX.
2. It theoretically does not "mess" with UP and BNSF in the western US.
3. There is a lot of money to be made hauling intermodal filled with consumer goods from the Port of Vancouver, BC all the way to New York, Charlotte, Atlanta, etc. and backhaul the containers with export grain. It would be a more voluminous market than CN's service from Vancouver or Prince Rupert, BC to Memphis and would utilize two thirds of the CSX iron triangle.
4. Ethanol for the east coast from CP territory could take the most expeditious route to eastern markets on a single line rather than going over the top of Lake Ontario.
5. Frac sand for the Marcellus and Utica shales could come single line from Wisconsin.
6. The Ports of Miami and Savannah could serve as an embarkation point for single line service for containers coming from South America or through the Panama Canal to Toronto and Montreal.
7. If I have four years to build one of, if not the, biggest railroad in the history of railroading at about 34,000 miles, CP might be the easiest lift to get it done.
Just some thoughts for discussion.
Balt ACD- "Yup! Canadians wrecking US transportation"
Well I was going to defend my country but then I thought of Justin Bieber and Celine Dion, even Alex Trebek so now I'm thinking you may have something there.
Regardless...we do not want any of the mentioned back...all your's...enjoy.
An "expensive model collector"
A merger maybe, but I doubt it will be between CSX/NS and CP.. just doesn't make any sense..kind of like scratching your back with a garden hose.. Sure it can be done, but WHY? A CSX/CP merger was briefly entertained last year because at that time EHH worked for CP, and any merger proposal involving EHH as its central player would obviously have to involve his employer. Now that he's gone from CP he likely nolonger feels beholden to push any merger with CP, a cockeyed merger that would cut across North America diagonally and would make no sense whatsoever. A merger, if one were to happen, would thus most likely involve the obvious suspects: CSX & BNSF or CSX and UP. Why? Because that would make sense..
Some data and thoughts on mergers:
Norfolk Southern closed today at $122.93, just $2.07 below its 52 week high and $48.23 above its 52 week low. Market cap $35.72 billion.
Union Pacific closed today at $109.43, which is just $1.95 below its 52 week high and $32.14 above its 52 week low. Market cap $89.05 billion.
Kansas City Southern closed today at $89.29, which is $11.40 below its 52 week high and $10.24 above its 52 week low. Market cap $9.52 billion.
Canadian Pacific closed today at $149.19, which is $8.15 below its 52 week high and $29.69 above its 52 week low. Market cap $21.86 billion.
Canadian National closed today at $72.35, just $0.38 below its 52 week high and $16.62 above its 52 week low. Market cap $55.07 billion.
CSX closed today at $49.79, which is $0.15 below its 52 week high and $25.43 above its 52 week low (having doubled in price). Market cap $46.13 billion.
Railroad stocks for the most part are at or near their 52 week highs. Mr. Buffett tends to not buy properties at near their highest values unless he perceives there is still significant upside as when he increased his share of Apple stock to $18 billion in February 2017.
In terms of generating financing for a merger, clearly Kansas City Southern and Canadian Pacific would be the easier fish to swallow based on the size of the financing needed.
EHH has said that he does not like "the Mexico play" in past interviews. However, at CN he made many strategic acquisitions during his time there.
Given the "size of the fish to swallow" and his past patterns of acquisition at CN and attempting acquisiton at CP, it would seem that there is a future coupling of CSX and CP, which many on this forum have stated already. It would not be surprising if CSX started numbering their trains in the same manner as CP in very short order.
If EHH drops the Operating Ratio to 60 by the end of 2018 and is generating free cash flow at the same rate as at CN and CP, it would be reasonable to look for the merger to be proposed in late 2018 or early 2019 to give him time to complete the merger before his contract expires.
We might also see CSX purchase Iowa Interstate in order to effect a "de facto" bypass of Chicago for significant traffic to Kansas City, Minneapolis and points north and northwest of Minneapolis. While the former Milwaukee Road south of La Crescent is not of the highest speed, the addition of passing sidings and not having to fight through Chicago quagmire and keep rolling at 35 mph from the Quad Cities to La Crescent could easily end up being faster in overall schedule times in the long run.
How much money could CSX make selling Bensenville for additional airport capacity at O'Hare?
UlrichWe can't claim EHH as one of our own.. he's a dyed in the wool Tennesseen..
But his brain got frosted from his time up North. Sort of like a Slupee brain freeze only people lose their jobs.
Never too old to have a happy childhood!
Who was fired by Greinstien for trying his crap on the old Frisco after the BN merged it into them. He has been a disaster for every railroad on the operational side he has been at. Yes the street loves him since to them it appears to them that he is finding millions of dollars in money tied up in so called UNNEEDED equipment tracks and wages for employees he thinks are unneeded. Then after a couple years of his so called sucess the works start to gum up and customers start to complain and then leave. Sorry he makes Chainsaw Al of the 80's look like a freaking genius. If I was put in charge of EHH I would not let him be in charge of cleaning my bosses grease trap in the shop. His job would be sweeping the floor in the shop or painting the post outside the door.
We can't claim EHH as one of our own.. he's a dyed in the wool Tennesseen..
UlrichCSX will be just fine.. CN and CP both survived EHH and are arguably better companies today than they were prior to his arrival. But if there's going to be a merger, I would think NOW is the time.. with Trump in the White House, and EHH running CSX.. the time to do this is now.. not in four years when Trump and EHH are gone. I'm not sure mergers are the way to go... but if they're going to happen then now is the time.
But if there's going to be a merger, I would think NOW is the time.. with Trump in the White House, and EHH running CSX.. the time to do this is now.. not in four years when Trump and EHH are gone. I'm not sure mergers are the way to go... but if they're going to happen then now is the time.
Yup! Canadians wrecking US transportation.
UlrichCSX will be just fine.. CN and CP both survived EHH and are arguably better companies today than they were prior to his arrival. But if there's going to be a merger, I would think NOW is the time.. with Trump in ~snip~
But if there's going to be a merger, I would think NOW is the time.. with Trump in ~snip~
Correction to your statement, CN is now doing fine after how many years of new management? They were not "fine" right after EHH left, and they've had to spend how many billions of dollars on capital improvements because of things that EHH did the existing infrastructure? CP will take years to get to being "fine" because of the same slash and burn technique that EHH used at IC first, then CN. You DO NOT grow business by gutting your system, removing capacity(even if currently underutelized), slashing employment in operating crafts and disposing of rail equipment...all of which are hallmarks of EHH's "precision scheduled railroading"...which is really funny to say considering that back in the days of steam many freights were already scheduled and you had extras, now, almost no freight trains are scheduled. EHH didn't invent anything, he just brought back something that used to be common to the modern era of railroading. He's not and never has been interested in running a railroad, he's all about the money, both for his pocket and the investors, aka, shareholders. Owning railroad stock is not a get rich quick scheme, look at high flying industries for that, owning railroad stock is a long term(20 - 40 year investment), sort of like utilities.
Mergers will not happen now or in the future, Trump has nothing to do with them, it's still up to the STB and they aren't about to change the rules any. They make absolutely no sense and would actually be anti-competetive in todays world, though if you ever wanted to see what would happen with mandatory trackage rights all across the U.S. be my guest and merge the remaining big 6 into the big 3(then watch them fail and we have to nationalize the entire system). Besides, I highly doubt there's another carrier out there that Berkshire-Hathaway would be interested in buying and combining with the BNSF.
CSX will be just fine.. CN and CP both survived EHH and are arguably better companies today than they were prior to his arrival.
Well CSX can say goodbye to about 2K locomotives any and all capital improvements and a lot of their customers. Right now NS is going we are going to be needing MORE of everything if possible.
It's been fun. But it isn't much fun anymore. Signing off for now.
The opinions expressed here represent my own and not those of my employer, any other railroad, company, or person.t fun any
JACKSONVILLE, Fla. — E. Hunter Harrison has been named the CEO of CSX Transportation, less than seven weeks after stepping down early from the top job at Canadian Pacific. The Wall Street Journal reported this afternoon that CSX and Mantle Rid...
http://trn.trains.com/news/news-wire/2017/03/06-ehh-at-csx
Brian Schmidt, Editor, Classic Trains magazine
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