Murphy Siding Because everyone is waiting to see if the CSX changes really are a miracle...
Because everyone is waiting to see if the CSX changes really are a miracle...
Yeah right. Everyone is withholding their judgement. You're a riot.
Murphy Siding Euclid So what I am asking is this: If it works for CXS, why is it a problem to demand the same changes for NS? Because everyone is waiting to see if the CSX changes really are a miracle or if they follow the same pattern as the last 100 times Wall Street predators have done this type of thing to a company. Explaining it a 15th time won't make it any clearer to you if you didn't get it the first 14 times. Discuss it with the other euclids. See if they remember those discussions.
Euclid So what I am asking is this: If it works for CXS, why is it a problem to demand the same changes for NS?
Because everyone is waiting to see if the CSX changes really are a miracle or if they follow the same pattern as the last 100 times Wall Street predators have done this type of thing to a company. Explaining it a 15th time won't make it any clearer to you if you didn't get it the first 14 times. Discuss it with the other euclids. See if they remember those discussions.
Well yes of course that is your position. But you see, I was responding to one poster above who apparently has not swallowed that kool-aid. He said it would be a problem if NS investors saw the precision railroading concept working at CSX and therefore wanted it at NS. That poster believes the concept is successful at CSX. So I am asking why he thinks NS investors wanting the same concept for NS is a "problem" as he puts it. This has absolutely nothing to do with what I think of precision railroading or EHH. Maybe you should read a little more carefully before seizing the opportunity to launch your condescending, childish insults.
EuclidSo what I am asking is this: If it works for CXS, why is it a problem to demand the same changes for NS?
Thanks to Chris / CopCarSS for my avatar.
EuclidSo what I am asking is this: If it works for CXS, why is it a problem to demand the same changes for NS? The only explanation I can see for this comment is that there is something fundamental with NS that makes the CSX changes unworkable for NS.
Those changes have been equally unworkable for CSX. At present CSX and NS are racing for the ditch.
And who is the CXS you keep mentioning?
Never too old to have a happy childhood!
oltmannd Euclid longhorn1969 Yes, the traffic will come back. Truck companies are having a hard time getting drivers, and RRs are more efficient at moving bulk. NS will start charging a premium and companies want competition when negotiating. CSX has gotten its house in order and making incredible profit against revenues coming in. Just add volume to the system and CSX will increase profits more so. The problem is when NS (apparently railfan favorite) stockholders start a seeing a smaller CSX with a higher profit margin and will demand the same changes. Why is that a problem? It's not a problem until it is a problem. If you don't really understand what resources (crew, locomotive, facilities, et.al.) it takes to keep your operations fluid and being able to recover from all the lumps and bumps that come your way, you can find yourself in a very dark place that's very difficult to dig yourself out of. It takes more resources to keep a railroad limping along in a congested condition than it does to run a fluid railroad. If you are in a fluid condition and you cut resources so that you have little safety stock, any bump in the road can be a disaster. One big derailment. A bad stretch of weather. A bump in traffic. CSX managed to do this implementing PSR. NS has managed to do this twice now in the past 4 years. First on the north end, now on the south end. UP has also managed this trick, of late. If you try to manage OR by hammering the budget from the top down, it's very easy to fall into this trap. There is always a lag of a few quarters before the financials catch up with the operational reality, but the cost is alway worse than benefit in the long run. NS started having trouble in mid 2014 and didn't manage to fully dig out until late in 2015. Look at NS's financials for 2013, 14, 15 and 16 to see the effect.
Euclid longhorn1969 Yes, the traffic will come back. Truck companies are having a hard time getting drivers, and RRs are more efficient at moving bulk. NS will start charging a premium and companies want competition when negotiating. CSX has gotten its house in order and making incredible profit against revenues coming in. Just add volume to the system and CSX will increase profits more so. The problem is when NS (apparently railfan favorite) stockholders start a seeing a smaller CSX with a higher profit margin and will demand the same changes. Why is that a problem?
longhorn1969 Yes, the traffic will come back. Truck companies are having a hard time getting drivers, and RRs are more efficient at moving bulk. NS will start charging a premium and companies want competition when negotiating. CSX has gotten its house in order and making incredible profit against revenues coming in. Just add volume to the system and CSX will increase profits more so. The problem is when NS (apparently railfan favorite) stockholders start a seeing a smaller CSX with a higher profit margin and will demand the same changes.
Why is that a problem?
It's not a problem until it is a problem.
If you don't really understand what resources (crew, locomotive, facilities, et.al.) it takes to keep your operations fluid and being able to recover from all the lumps and bumps that come your way, you can find yourself in a very dark place that's very difficult to dig yourself out of.
It takes more resources to keep a railroad limping along in a congested condition than it does to run a fluid railroad. If you are in a fluid condition and you cut resources so that you have little safety stock, any bump in the road can be a disaster. One big derailment. A bad stretch of weather. A bump in traffic.
CSX managed to do this implementing PSR. NS has managed to do this twice now in the past 4 years. First on the north end, now on the south end. UP has also managed this trick, of late.
If you try to manage OR by hammering the budget from the top down, it's very easy to fall into this trap.
There is always a lag of a few quarters before the financials catch up with the operational reality, but the cost is alway worse than benefit in the long run.
NS started having trouble in mid 2014 and didn't manage to fully dig out until late in 2015. Look at NS's financials for 2013, 14, 15 and 16 to see the effect.
So what I am asking is this: If it works for CXS, why is it a problem to demand the same changes for NS? The only explanation I can see for this comment is that there is something fundamental with NS that makes the CSX changes unworkable for NS.
-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/)
The Mantle Ridge model
https://www.nbcnews.com/think/opinion/toys-r-us-bankruptcy-what-happens-when-wall-street-put-ncna876536
Recall a time back in the Hays Watkins days, CSX bought Texas Gas a conglomerate that inclued not only Texas Gas Transmission Co. by American Comercial Barge Lines and SeaLand of container shipping fame. The CSX management personnel were due a bonus on rail operations, however, the 'extraordinary charge' aginst earnings from the purchase led management to tell the non-contract personnel there would be no bonus because of the 'extraordinary charge'. Over the ensuing years, the various elements of Texas Gas were sold off one by one. None of those sales ever found their way into 'operating profits', despite the initial purchase all being charged against operating profits.
Profits can be anything top management wants it to be for whatever purpose top management wants.
daveklepper Actually, Euclid, from what I remember, CSX's profits have not declined but increased. The problem is, that the increase in profits has resulted from the sale of assttes not needed under the HH rationalization scheme, and that revenue from operations has declined. This is from memory, and admittadly I have no proof at the present moment.
Actually, Euclid, from what I remember, CSX's profits have not declined but increased. The problem is, that the increase in profits has resulted from the sale of assttes not needed under the HH rationalization scheme, and that revenue from operations has declined. This is from memory, and admittadly I have no proof at the present moment.
Rio Grande Valley, CFI,CFII
charlie hebdoThe 2017 report shows greater profits on the operation. The looting and selling off (if that is true, let's see a list of assets sold) that some have a "feeling" about has nothing to do with that profit
After they run out of stuff to sell or cut, then we'll see if there is still a profit. Short term stuff doesn't tell us much.
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
If you can't believe cooked books, just what can you believe? [/sarcasm]
Shadow the Cats owner Euclid here is a little history lesson for you. Here is a list of 2 major companies that collasped yet had been showing profits just one quarter before hand.
Euclid here is a little history lesson for you. Here is a list of 2 major companies that collasped yet had been showing profits just one quarter before hand.
What am I supposed to learn from the little history lesson? I never said a company cannot collapse while showing a profit.
Euclid here is a little history lesson for you. Here is a list of 2 major companies that collasped yet had been showing profits just one quarter before hand. Enron we all know how badly they were being managed. The other is Arrow Trucking in my industry. They had been showing double invoices to their banks to show they where making a profit no one caught them until they literally folded overnight. Close to 1200 drivers where caught with fuel cards shut off right before Chirstmas thousands of miles from home. Guess where their CEO is now Prison.
tree68It's interesting to note that many of the trains that EHH cancelled have been slowly returned to the "schedule."
Trains seem to be returning, however, their ID's have been changed to protect the guilty.
EuclidWhy do you choose to believe that?
Because of the history of the type of vulture capitalists who sought to have EHH installed as CEO. In fact, I've opined before that he was simply the figurehead - that others were calling the shots.
EuclidWhy, in the case of CXS-EHH, do you assume that the pruning was done not for the right reason to improve the business, but rather, for the wrong reason of raising cash at the expense of closing operations essential to the health of the businesses?
See the above.
I get that there is business that is not worth handling. But what is that measure? Clearly something bleeding money deserves to be cut. But what if a traffic source just isn't making as much money as you'd like? It's still income.
I find it hard to believe that UPS traffic would be a money loser, but EHH seems to have shed at least some of that, according to our resident trucking expert. Just like Amtrak, a hot intermodal doesn't fit in a schema that calls for all trains moving at the same speed.
EuclidI would like to know if this premise is real or just the clichéd expression of a grievance against a management policy that might eliminate jobs.
I don't work for CSX, so aside from several friends who do, I don't have a dog in that race. Nor do I own CSX stock (or any stock, for that matter).
It's funny that folks who saw the Children's Fund's attempted takeover of CSX as a clear loot-and-run operation aren't seeing that to be the case now. You won't see that in anything official from CSX. Sometimes you have to read between the lines.
The big move to "precision scheduled railroading" had to be slowed when the vultures realized their actions were being seen as what they were.
It's interesting to note that many of the trains that EHH cancelled have been slowly returned to the "schedule."
Larry Resident Microferroequinologist (at least at my house) Everyone goes home; Safety begins with you My Opinion. Standard Disclaimers Apply. No Expiration Date Come ride the rails with me! There's one thing about humility - the moment you think you've got it, you've lost it...
tree68 It'd be hard to determine whether walking away from any given business was a good idea without looking at that specific business. Then comes the question, what parameters do you use to make that judgement? I would opine that your parameters might be different than EHH's, whose underlying philosophy seemed to be getting money to the bottom line where it would best benefit his investors. One would think that transportation analysts looking at the big picture would have seen the trucking issue looming. EHH's folks either ignored that, or didn't care, focussing on getting the money to the bottom line where it would best benefit his investors. One could hope that CSX management would go back to making money the old fashioned way, instead of focussing on getting the money to the bottom line where it would best benefit the investors...
It'd be hard to determine whether walking away from any given business was a good idea without looking at that specific business. Then comes the question, what parameters do you use to make that judgement? I would opine that your parameters might be different than EHH's, whose underlying philosophy seemed to be getting money to the bottom line where it would best benefit his investors.
One would think that transportation analysts looking at the big picture would have seen the trucking issue looming. EHH's folks either ignored that, or didn't care, focussing on getting the money to the bottom line where it would best benefit his investors.
One could hope that CSX management would go back to making money the old fashioned way, instead of focussing on getting the money to the bottom line where it would best benefit the investors...
Here you seem to allow that walking away from certain types of business might be a good idea. But then you opine that EHH did it for the wrong reason. Why do you choose to believe that?
In any business, it is quite possible that there are redundant and inefficient operations that can be eliminated to make a better business. Not all pruning is bad, and not all pruning is continued past the point where it should have been stopped. Not all pruning is done just to raise cash at the expense of the health of the business.
Why, in the case of CXS-EHH, do you assume that the pruning was done not for the right reason to improve the business, but rather, for the wrong reason of raising cash at the expense of closing operations essential to the health of the businesses?
I would like to know if this premise is real or just the clichéd expression of a grievance against a management policy that might eliminate jobs. It sounds like the latter when it is stated over and over again as the singular point of the masses.
The locomotives in question were sold to either GE or Progress Rail, both of whom are now leasing them to other carriers.
tree68 charlie hebdo ...if that is true, let's see a list of assets sold... Reported on a fan site that seems pretty thorough - over 400 locomotives sold from December 2017 to the present - when other railroads are pulling units out of storage. The site lists the units, if you want that.
charlie hebdo ...if that is true, let's see a list of assets sold...
Reported on a fan site that seems pretty thorough - over 400 locomotives sold from December 2017 to the present - when other railroads are pulling units out of storage. The site lists the units, if you want that.
Many are leased to CN now.
Greetings from Alberta
-an Articulate Malcontent
I like this quote:
"Put a bunch of cost-cutting executives together at a pizza company and, eventually, one will suggest getting rid of the cheese."
Peta, Joe. Trading Bases: How a Wall Street Trader Made a Fortune Betting on Baseball (p. 322). Penguin Publishing Group. Kindle Edition.
charlie hebdo...if that is true, let's see a list of assets sold...
Reported in the trade press - some 8000 miles of track will be going up for sale.
I have my doubts that the moneys from those sales will be plowed back into the railroad. That cash will go straight out the door.
When you start pruning - everything looks marginal and you keep on pruning.
tree68 charlie hebdo You all prefer to debate fantasy. The audited statements show greater profits. Of course, they do! That's the whole idea - increase the bottom line and take the profits. I think what most people here are saying is that the method of increasing the bottom line is to gut the operation. Sell off anything that isn't nailed down and count the proceeds as profit. Eventually you run out of stuff that isn't nailed down, so you shed business so you have more excess capacity - to sell off. The flip side would be to make an effort to grow the business (instead of driving customers away) and go for long term growth. While the evidence is chiefly anecdotal here on the forum - there's still a feeling that the reality of EHH's tenure was to loot and run.
charlie hebdo You all prefer to debate fantasy. The audited statements show greater profits.
You all prefer to debate fantasy. The audited statements show greater profits.
Of course, they do! That's the whole idea - increase the bottom line and take the profits.
I think what most people here are saying is that the method of increasing the bottom line is to gut the operation. Sell off anything that isn't nailed down and count the proceeds as profit.
Eventually you run out of stuff that isn't nailed down, so you shed business so you have more excess capacity - to sell off.
The flip side would be to make an effort to grow the business (instead of driving customers away) and go for long term growth.
While the evidence is chiefly anecdotal here on the forum - there's still a feeling that the reality of EHH's tenure was to loot and run.
The 2017 report shows greater profits on the operation. The looting and selling off (if that is true, let's see a list of assets sold) that some have a "feeling" about has nothing to do with that profit. One year doesn't tell much. Time will tell. The 2018 report should give a clearer picture as to whether the strategy of pruning high cost, low revenue, i.e., marginal operations is working. And whether there is an effort to find new, more profitable business or not.
charlie hebdo You all prefer to debate fantasy. The audited statements show greater profits. Of course Balt thinks everything is fake.
You all prefer to debate fantasy. The audited statements show greater profits. Of course Balt thinks everything is fake.
The profits can't be fake because then there would be no evidence of investors looting the company.
Euclid Here is what I said in its full context (responding to Dave Klepper): "Okay, let’s say that is all true. Why is that a problem? If the assents were not needed, as your comment assumes, then certainly it is better to sell them than it is to keep them. If that resulted in a profit, what is wrong with that? What can be wrong with selling an unneeded item and having the proceeds add to the profit of the business? It seems to me that what most people here want to read into this scenario is that a lack of profit invalidates EHH business philosophy, and to get around that, CSX is cheating by showing a profit from the sale of assets; and if they did not do that, there would be no profit, and that would therefore invalidate EHH business philosophy." You have quoted only the part in bold, which reverses the meaning of what I actually said.
Here is what I said in its full context (responding to Dave Klepper):
"Okay, let’s say that is all true. Why is that a problem? If the assents were not needed, as your comment assumes, then certainly it is better to sell them than it is to keep them. If that resulted in a profit, what is wrong with that? What can be wrong with selling an unneeded item and having the proceeds add to the profit of the business?
It seems to me that what most people here want to read into this scenario is that a lack of profit invalidates EHH business philosophy, and to get around that, CSX is cheating by showing a profit from the sale of assets; and if they did not do that, there would be no profit, and that would therefore invalidate EHH business philosophy."
You have quoted only the part in bold, which reverses the meaning of what I actually said.
tree68 Euclid ...this scenario is that a lack of profit invalidates EHH business philosophy, and to get around that, CSX is cheating by showing a profit from the sale of assets... EHH was doing exactly what the vulture investors backing him wanted him to do - extract every possible penny out of CSX, business viability be damned. If business is going to rebound after the slowdown, don't you want some assets in reserve to handle that increase? I believe it's been argued here already that one reason business is down on CSX is because it's been deliberately dumped. I'm not sure just how a twice-a-week shipper fits into PSR. Seems like it would be an impediment - which means it has to go. Eventually, you prune all the branches from the tree, and you don't have a tree any more.
Euclid ...this scenario is that a lack of profit invalidates EHH business philosophy, and to get around that, CSX is cheating by showing a profit from the sale of assets...
EHH was doing exactly what the vulture investors backing him wanted him to do - extract every possible penny out of CSX, business viability be damned.
If business is going to rebound after the slowdown, don't you want some assets in reserve to handle that increase?
I believe it's been argued here already that one reason business is down on CSX is because it's been deliberately dumped. I'm not sure just how a twice-a-week shipper fits into PSR. Seems like it would be an impediment - which means it has to go. Eventually, you prune all the branches from the tree, and you don't have a tree any more.
Well you say that, but what is your proof that vulture investors backing EHH wanted to extract every penny out of CSX? I have heard it so many times that it is beginning to sound like a conspiracy theory.
I understand that EHH showed up with a plan to trim the fat from the operation, get rid of the dead wood so to speak. That requires job reductions, and anybody in management proposing that will be hated from here to eternity. Maybe it is no coincidence that the entire argument against EHH sounds just like a labor grievance, which tend to sound like a political debate.
If we are to believe this anti-EHH script, there was absolutely no dead wood to cut, and so if anything was cut, it is a sign of vulture investors looting the company. If it were a free lunch for vulture capitalists, why are they just picking on CSX?
Also, I can't help but notice that you carefully quoted me above to take my comment out of context in order to completely reverse its meaning to make it sound like I too am rabidly anti-EHH.
Wall Street Movie sums this up-
GEKKO: All together, these men sitting up here [pointing to Teldar management] own less than 3 percent of the company. And where does Mr. Cromwell put his million-dollar salary? Not in Teldar stock; he owns less than 1 percent.
GEKKO: You own the company. That’s right — you, the stockholder. And you are all being royally screwed over by these, these bureaucrats, with their steak lunches, their hunting and fishing trips, their corporate jets and golden parachutes.
CROMWELL: This is an outrage! You’re out of line, Gekko!
GEKKO: Teldar Paper, Mr. Cromwell, Teldar Paper has 33 different vice presidents, each earning over 200 thousand dollars a year. Now, I have spent the last two months analyzing what all these guys do, and I still can’t figure it out. One thing I do know is that our paper company lost $110 million dollars last year, and I’ll bet that half of that was spent in all the paperwork going back and forth between all these vice presidents.
In 2016 CSX had revenue (from operations) of $11,069 mil., operating expenses $7,680 mil. Operating Income $ 3,389 mil. Operating Ratio = 69.4.
In 2017 CSX had revenue (from operations) of $11,408 mil., operating expenses $7,741 mil. Operating Income $ 3,667 mil. OR = 67.9.
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