I can't get the whole story out of the Wall Street Journal site but Blackstone Group (along with other investors) has now launched a formal takeover bid of Kansas City Southern after their initial attempt back in late July was rebuffed. https://www.wsj.com/articles/blackstone-gip-make-takeover-bid-for-kansas-city-southern-11599073239?mod=hp_lista_pos1
I suppose it was only a matter of time...
Regardless; it's bad news for KCS customers.
Juniata Man Regardless; it's bad news for KCS customers.
Why?
JPS1Why?
Amongst the terms used to describe Blackstone is "hedge fund."
Hedge funds tend to be described as: "a limited partnership of investors that uses high risk methods, such as investing with borrowed money, in hopes of realizing large capital gains.
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...
I thought they were landscapers.. :)
Didn't they say the same about BNSF?
rdamonI thought they were landscapers.. :) Didn't they say the same about BNSF?
Berkshire Hathaway is not a short term - take the profits and run type investor. They are in the companies they invest in for the long term.
Never too old to have a happy childhood!
KCS under Pat Ottensmeyer has been a fairly customer focused railroad. When a hedge fund becomes involved, you can pretty safely assume their interest will be to rake as much cash as quickly as possible and the customers be damned.
As noted over on TRAINS Newswire; rail customers are already having renewed service issues with several Class 1's whose focus is pleasing Wall Street rather than moving freight. Having Blackstone running the hen house will almost certainly not do anything to make life better for KCS customers.
JPS1 Juniata Man Regardless; it's bad news for KCS customers. Why?
On another site, members are already dividing up how KCS will sold off.
Jeff
Brookfield(G&W)-Brookhaven(Pioneer)-Blackstone(KCS)
STOP IT! (I'm getting connfuzzed too many two syllable Bees)
Any former C&NW employee can tell you why.
SD60MAC9500 JPS1 Juniata Man Regardless; it's bad news for KCS customers. Why? Any former C&NW employee can tell you why.
I've worked with many CNW people who were around during that era. Most are now retired. I also would like to know why?
If it's due to driving off customers and abandoning lines, the CNW did most of that before Blackstone arrived. It's why the state of Iowa didn't support CNW getting what they did from the RI liquidation in early 1980s.
SD60MAC9500Any former C&NW employee can tell you why.
Thats where I heard the name before, weren't they responsible for buying C&NW a while back???
https://www.chicagotribune.com/news/ct-xpm-1989-06-07-8902070375-story.html
Reads like a major capital infusion into C&NW. I have to say that KCS needs the same capital infusion to complete the NAFTA railway dream, in my view. KCS still has tracks and routes to straighten out in South Texas in my view.... I don't think they are finished there yet.
CMStPnP SD60MAC9500 Any former C&NW employee can tell you why. Thats where I heard the name before, weren't they responsible for buying C&NW a while back??? https://www.chicagotribune.com/news/ct-xpm-1989-06-07-8902070375-story.html Reads like a major capital infusion into C&NW. I have to say that KCS needs the same capital infusion to complete the NAFTA railway dream, in my view. KCS still has tracks and routes to straighten out in South Texas in my view.... I don't think they are finished there yet.
SD60MAC9500 Any former C&NW employee can tell you why.
Japonica wanted the CNW for the east/west main. It was rumored that they intended to sell or junk everything else. Japonica figured they could, in effect, hold the UP hostage for direct access from Council Bluffs to Chicago. (On the Wickipedia site for Japonica Partners, it says they were successful and steamlined the company and sold it to Blackstone. Not quite true.)
It was the initial hostile takeover that ultimately led to CNW being acquired by the UP. Before the Blackstone deal (which included UP) was finalized, the UP had taken out an option to buy the Iowa Interstate RR. Just incase Japonica won the CNW.
After Blackstone won, UP was given conditional trackage right on the east/west main. If CNW service deteroriated to an agreed upon level, UP could run their trains using their own crews. (Who probably would've been hired from the CNW ranks.) It never happened and UP gradually increased their ownership in the CNW.
So, is this a step towards two North American major railroads?
Gramp So, is this a step towards two North American major railroads?
Sure sound like the beginning stages of "Choose Your Partners' for the next round of the Big American Railroad Square Dance !
[OR Here we go again?]
GrampSo, is this a step towards two North American major railroads?
The only reason Canada still has two railroads is the government there has an emotional attachment to the CP. Not sure how that is going to work out with your two railroad plan.
CMStPnP Gramp So, is this a step towards two North American major railroads? The only reason Canada still has two railroads is the government there has an emotional attachment to the CP. Not sure how that is going to work out with your two railroad plan.
Feature the last two US Class 1's will be CN & CP.
Pleasing Wall Street [pleasing investors in the capital markets] is what capitalism is. IMO, a vital infrastructure like rail transportation right of way should be owned by the people of the USA.
charlie hebdoPleasing Wall Street [pleasing investors in the capital markets] is what capitalism is. IMO, a vital infrastructure like rail transportation right of way should be owned by the people of the USA.
Someone sent me a link to a 1996 video about the 20th anniversary of Conrail. I told him if you played it backwards - you got PSR.
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
charlie hebdoIMO, a vital infrastructure like rail transportation right of way should be owned by the people of the USA.
Overmod charlie hebdo IMO, a vital infrastructure like rail transportation right of way should be owned by the people of the USA. But not mis-micromanaged by the state bureaucracies of the USA for the ultimate benefit of the political rather than the economic upper classes of the USA. That's where the careful thinking about things like divorcing Keynesian planning from compulsory taxation become vitally important...
charlie hebdo IMO, a vital infrastructure like rail transportation right of way should be owned by the people of the USA.
But not mis-micromanaged by the state bureaucracies of the USA for the ultimate benefit of the political rather than the economic upper classes of the USA. That's where the careful thinking about things like divorcing Keynesian planning from compulsory taxation become vitally important...
Correct. In Europe and elsewhere, the agencies that manage rights of way and other elements of superstructure are fairly well-insulated from politics and pork barrel considerations.
Talk about Socialist, that is positively Communist.
BaltACD charlie hebdo IMO, a vital infrastructure like rail transportation right of way should be owned by the people of the USA. Talk about Socialist, that is positively Communist.
Government ownership or open access and you can kiss carload traffic goodbye. You'll only need a network about the size of Amtrak that just connects major cities. Only major routes for intermodal and maybe some branches for bulk unit trains. In a way, that's like John Knieling's vision of future railroads.
Anything that doesn't fit that model will go by truck. It'll put more freight on the highways. Not because it moves to a railhead, but because it will bypass the rail network entirely.
It's a good way to really marginalize the industry completely. I'm surprised Ttrraaffiicc hasn't thought of this and lent his/her support to it. Although it would fit in with PSR goals, so Wall Street types would love it.
jeffhergertGovernment ownership or open access and you can kiss carload traffic goodbye. You'll only need a network about the size of Amtrak that just connects major cities.
****Gestures wildly at PSR*****
Wall Street only knows money as value - not the value of servicing customers with goods and service. Businesses, other than banks, don't exist on money alone.
CP has tried to take over CN several times over the years, most recently around 1990.
One of the privatization proposals involved splitting CN in half (remember, this is well before the IC and WC mergers). CP would have gotten most everything east of Winnipeg (and probably abandoned a lot of it), while an unidentified American railroad (most likely Burlington Northern, though it was never publicly identified) would have been invited to purchase the more profitable western lines.
CN still carries some conditions from the 1995 privatization, but many of them could probably be swept away for the right price in Ottawa. CP has always been a private company, and has no such handicaps.
The combined CN-BNSF system would have been headquarted in Montreal, and this proposal was killed by the American regulators, not any Canadians.
CN has slowly been moving administrative and operations staff out of Montreal over the years, most recently all the Canadian Dispatchers and Crew Callers were moved to Edmonton.
Greetings from Alberta
-an Articulate Malcontent
jeffhergert Government ownership or open access and you can kiss carload traffic goodbye. You'll only need a network about the size of Amtrak that just connects major cities. Only major routes for intermodal and maybe some branches for bulk unit trains. In a way, that's like John Knieling's vision of future railroads. Anything that doesn't fit that model will go by truck. It'll put more freight on the highways. Not because it moves to a railhead, but because it will bypass the rail network entirely. It's a good way to really marginalize the industry completely. I'm surprised Ttrraaffiicc hasn't thought of this and lent his/her support to it. Although it would fit in with PSR goals, so Wall Street types would love it. Jeff
I'm not sure why you say that. If the rails could move from just running trains on a fixed set of routes and instead operated integrated transport, it would seem the rail share of freight might actually increase from its rather small current market share.
It's not like the rails are doing so well.
https://www.ketv.com/article/union-pacific-confirms-layoffs-impacting-management-unionized-employees/33928116
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