Steam Locomotives versus Diesels

[MichaelSol]

Fair, although there is an argument that modern steam would have been a better long term investment for road power, and ultimately a more profitable one simply because of the longer economic service lives, but that is ultimately a more complicated question and a more complicated answer. What the existing record clearly shows, without speculation, is that railroads suffered as a result of the way dieselization was handled, and that very few of the promised benefits of dieselization can actually be found in the statistical record.

Best regards, Michael Sol

[oltmannd]

So, dieselization, in the long run, was beneficial, but the manner and method were not consistent with improving the RRs ROI in many instances. A fair statement?

The motives behind dieselizaton as practiced by some roads may not have been consisent with investment in the RR property as a going concern, but in some other business objective(s). Another fair statement?

[MichaelSol]

QUOTE: Originally posted by oltmannd
[Looks like GN gave up in suddenly in 1958 but MILW gave ground more grudgingly over a 6 year period.

That is interesting. GN's expenditures just went "thunk."

Best regards, Michael Sol

[MichaelSol]

Regarding my comments on the "extent and timing" of dieselization, N&W is a good example of a different approach to to the extent and timing of its dieselization, and made a more profitable transition.

You will note also my earlier remark that railroads that dieselized fastest, had the faster deterioration in ROI.

Best regards, Michael Sol

[oltmannd]

QUOTE: Originally posted by MichaelSol

QUOTE: Originally posted by oltmannd
The Mechanical officer wasn't wrong! Not even a little. He got what he was looking for - reduced mancount. With wages on the rise and huge pressure from the finance guys to reduce costs, diesels were just the thing. The capital didn't come from HIS budget -he was being measured on expenses.

It's the finance guys that blew it.

And, if the game was to suck money out of the company to pay out in dividends, I can't even find fault with the finance guy.

Well, the more conventional approach to paying dividends is to increase the ROI, not decrease it.

Best regards, Michael Sol

That only works if business is a going concern. Better to give the owners their money back than to flush it down the toilet by investing in a failed business model (regulated, common carrier, unionized, railroad in an era of highway expansion). Or, you invest the cash you suck out of the RR into more profitable ventures such as real estate development , insurance, restaurants, etc., hoping you can manage the decline of the RR without it eating you alive.

But, getting back to the nub of your original point, the one road that dieselized late - and at a measured pace - with "perfected" locomotives (GP9s), the N&W, was in a pretty good position in the early 1960s and was able to improve that position by purchasing (not merging with) the Wabash and Nickel Plate, plus a key ex-PRR line.

[MichaelSol]

QUOTE: Originally posted by oltmannd

How about highways effecting offline origins/destinations - received/delivered traffic at Minneapolis? Traffic doesn't just "decline" - something had to cause it.

The "decline" I referred to being in the maintenance dollars allocated by the respective companies. The same relative "decline" in that investment appears on virtually all of the peer railroads of the Milwaukee during the same time frame.

Now, traffic is another matter. GN and MILW both had declining carloadings during that time. As Milwaukee lost traffic -- and it undoubtedly did so because of the Interstates -- it's operating ratio steadily improved during the period in question. Suggestive that Milwaukee was losing unprofitable traffic. The GN's operating ratio, despite declining maintenance expenditures, continued to deteriorate, suggesting that GN was losing profitable traffic.

Best regards, Michael Sol

[oltmannd]

How about highways effecting offline origins/destinations - received/delivered traffic at Minneapolis? Traffic doesn't just "decline" - something had to cause it.

If a load of Flexible Flyer sleds normally went from the factory in Phila to Fargo ND in a box car (PRR, CB&Q, GN) and now they can get all the way to Chicago or Minneapolis in a truck on a superhighway, maybe doing the two lane thing west to Fargo isn't much of an impediment. A fairly high value finished goods would be the first kind of traffic to move from box car to truck. Since much of the finished goods came from the eastern cities at that time, the turnpike system would have given the truckers a "leg up" even if they had to two lane it west of there.

[MichaelSol]

QUOTE: Originally posted by oltmannd
Possible correlation with the construction of I90 and I94???

That's what I thought at one point; that was the reason the GN figures were brought in (actually several railroads were looked at). With GN, there were no Interstates at all, just a two-lane all the way, yet similar declines.

Best regards, Michael Sol

[MichaelSol]

QUOTE: Originally posted by oltmannd
Looks like GN gave up in suddenly in 1958 but MILW gave ground more grudgingly over a 6 year period.

GN was fighting a persistently deteriorating Operating Ratio, a more significant and more persistent deterioration than the Midwestern roads of the time, Rock Island excluded. Yet, even as it cut back significantly on maintenance expenditures, the OR continued its relentless decline. There was a significant decline during this time from GN's Mesabi Range ore carriage, which had always been that Company's lifeblood. As that East End traffic declined, however, GN's Operating Ratio increasingly reflected the transcontinental operation, which for whatever reasons just wasn't profitable. If it hadn't been for the BN merger and the ability of the new company to make rapid sacrificial investments, GN's 112-115 lb rail in combination with the newly-arriving 100-ton cars was a disaster in the making.

Best regards, Michael Sol

[oltmannd]

QUOTE: Originally posted by oltmannd

in constant 1967$$

year 1967$MILW 1967$GN
1950 $13,287 $11,044
1951 $14,203 $11,630
1952 $15,611 $12,281
1953 $16,268 $12,923
1954 $14,427 $12,537
1955 $16,844 $13,027
1956 $15,979 $13,435
1957 $14,442 $13,158
1958 $13,173 $9,501
1959 $12,679 $9,805
1960 $11,015 $9,430
1961 $9,598 $8,519
1962 $9,955 $8,800
1963 $9,220 $8,603
1964 $9,301 $8,879
1965 $9,667 $7,982
1966 $11,237 $8,156
1967 $9,575 $8,300
1968 $11,186 $7,933
1969 $12,250

Looks like GN gave up in suddenly in 1958 but MILW gave ground more grudgingly over a 6 year period.

Possible correlation with the construction of I90 and I94???

[oltmannd]

QUOTE: Originally posted by MichaelSol

Management attitudes undoubtedly played a role. Management competence undoubtedly played a role.

I'm not at all convinced it's about attitude and competence.

You are assuming that the goal was to operate the RR in a profitable fashion for the long term.

That may be a bad assumption.

If you thought there was no future in your business, but you were required to keep operating it anyway, you'd cut your expenditures to the bone, suck cash out of the assets and give it to the owners to invest elsewhere.

[MichaelSol]

QUOTE: Originally posted by oltmannd
The Mechanical officer wasn't wrong! Not even a little. He got what he was looking for - reduced mancount. With wages on the rise and huge pressure from the finance guys to reduce costs, diesels were just the thing. The capital didn't come from HIS budget -he was being measured on expenses.

It's the finance guys that blew it.

And, if the game was to suck money out of the company to pay out in dividends, I can't even find fault with the finance guy.

Well, the more conventional approach to paying dividends is to increase the ROI, not decrease it.

Best regards, Michael Sol

[oltmannd]

in constant 1967$$

year 1967$MILW 1967$GN
1950 $13,287 $11,044
1951 $14,203 $11,630
1952 $15,611 $12,281
1953 $16,268 $12,923
1954 $14,427 $12,537
1955 $16,844 $13,027
1956 $15,979 $13,435
1957 $14,442 $13,158
1958 $13,173 $9,501
1959 $12,679 $9,805
1960 $11,015 $9,430
1961 $9,598 $8,519
1962 $9,955 $8,800
1963 $9,220 $8,603
1964 $9,301 $8,879
1965 $9,667 $7,982
1966 $11,237 $8,156
1967 $9,575 $8,300
1968 $11,186 $7,933
1969 $12,250

Looks like GN gave up in suddenly in 1958 but MILW gave ground more grudgingly over a 6 year period.

[MichaelSol]

QUOTE: Originally posted by oltmannd
Are those real $$ or constant $$?

They are extracted directly from the annual reports; no inflation adjustments have been made to those figures. As you know, if you took 1951 or some such year as an index and adjusted those 1960s figures, they would look considerably worse in "constant dollars" than they already do.

Best regards, Michael Sol

[Modelcar]

RailroadDoc...Pickett model here is: N902-ES

[oltmannd]

QUOTE: Originally posted by MichaelSol

QUOTE: Originally posted by Murphy Siding

Michael Sol: What do you make of the fact that the downside of dieselization never has gotten much publicity? Railroads (and railfans) tend to take it as a given that it was the right decision, at the right time. You mention that railroads incured additional labor and and facility costs in the mid-1960's, due to aging diesel fleets. Can you expand on that a little? Thanks

Railroads are poor historians and have little inclination to introspection.

Gabriel Kolko offers a good example. Generations of railroaders and rail historians, as well as academicians of all types, believed the original Interstate Commerce Act was anti-railroad. Indeed, it was touted for purely partisan political purposes as a triumph of the Progressive movement.

Kolko pointed out in The Triumph of Conservatism, that a substantial, compelling body of evidence existed to show that the reverse was true: that the original ICC Act was the result of railroad pressure and demands to control "cut-throat" competition between railroads.

Now, why did Kolko figure that out, and no one else did?

Which railroad mechanical officer wanted to confess that his decision was wrong? These jobs are as political as any county sheriff: you commit careers to business judgment decisions. Nobody hardly ever says "oops." Not to stockholders and investors after you just wiped out their investment.

And, which company was spending, literally, millions of dollars on both advertising and studies to show the compelling advantages of rapid dieselization? Call it propaganda, but what is propaganda designed to do? And who was funding the other side of the story?

Conventional wisdoms are compelling and controlling. That has nothing to do, ever, with whether they are correct or not.

Rail fans?

As near as I can tell, railfanning is a labor of love. Isn't love blind?

Best regards, Michael Sol

The Mechanical officer wasn't wrong! Not even a little. He got what he was looking for - reduced mancount. With wages on the rise and huge pressure from the finance guys to reduce costs, diesels were just the thing. The capital didn't come from HIS budget -he was being measured on expenses.

It's the finance guys that blew it.

And, if the game was to suck money out of the company to pay out in dividends, I can't even find fault with the finance guy.

[oltmannd]

QUOTE: Originally posted by MichaelSol

QUOTE: Originally posted by oltmannd
[I would be willing to buy the arguement that states the RRs had pretty much given up on there being any future for the RRs by 1950 and were doing whatever it took to keep being able to pay out a dividend. If that meant taking on a lot of debt in order to save a nickel in operations, so that nickel could be put towards a dividend, then that was probably in the best interest of the stockholders. ...this fits with the lack of track maint in the 1950s - that was all operating expense that could be deferred in order to pay a dividend.

Management attitudes undoubtedly played a role. Management competence undoubtedly played a role. The ROI chart I posted earlier reflects in an interesting fashion on the following maintenance data, which is not for all railroads but happens to be what I have at the office at the moment:

Maintenance $ available per mainline mile of track
MILW------- Great Northern
1950 9,580--7,963
1951 11,050-- 9,048
1952 12,411-- 9,763
1953 13,031-- 10,351
1954 11,614-- 10,092
1955 13,509--10,448
1956 13,007--10,936
1957 12,175--11,092
1958 11,408--8,228
1959 11,069-- 8,560
1960 9,770--8,364
1961 8,600--7,633
1962 9,019--7,973
1963 8,455--7,889
1964 8,641--8,249
1965 9,135--7,543
1966 10,922--7,928
1967 9,575-- 8,300
1968 11,656-- 8,266
1969 13,451

You can see that even as ROI continued to decline into the 1960s, it would have been worse had maintenance expenditures continued at the rate they were at during the 1950s. Debt from dieselization and high maint./h.p. operating expenses continued to corrode ROI and then, after a decade of substantially lower track maintenance, along comes the bright idea of the 100-ton car. This one deserves the Nobel Prize for Railroading. The train wreck was just a matter of time, literally as well as figuratively.

Railroading was making only a few major decisions with far-reaching ramifications, and we can see what those were. We know the effects of both. We saw the Rail Crisis of the 1970s.

Best regards, Michael Sol

Are those real $$ or constant $$?

The decline in $ spent on track maint declined rapidly in the east much earlier. In the mid 1950s, the NYC was only replacing 20 ties per track mile, on average. The PRR was a bit better, but not much.

[Anonymous]

Interesting topic - I have to say I didn't look at it this way...

Anyhoo

RailroadDoc: it has been done - with super high pressure locomotives. Overall it proved no significant improvement at a cost of high complexity.

http://www.dself.dsl.pipex.com/MUSEUM/LOCOLOCO/locoloco.htm

As for modern steam.

No way - not possible. Even at 21% efficiency it is woefully inefficient in comparsion to ~40% efficiencies of current coal power plants - with them having prospects to go as high as 50% or more.

If you want a modern steam driven loco - it looks like this:

http://www.dansk-jernbanearkiv.dk/eg3101.jpg

[RailroadDoc]

Okay, I have to jump in the frey here. . . .

Mike, you mentioned way earlier in the thread that Steam locomotives today could be expected to have fuel efficiencies of 21%, as opposed to the 6% figure of the steam locomotives of times past.

You also mentioned that this could be done with a "uniflow" design and apparently a steam turbine.

Now virtually every rail fan is quite aware that boiler pressure limits pretty much peaked out at about 300 psi, which corresponds to a peak steam working temperature of 427 degrees F. With an open Rankine cycle design, the maximal theoretical efficiency for such a locomotive would be the temperature difference between the peak steam working temperature (427) and the open "condenser" temperature, which is 212 F. If superheat was used, the efficiency could increase to 8, maybe 9% as I recall.

Now it is true that steam power plants can achieve efficiencies of about 35% using a variety of mechanisms, such as using a preheater, superheater, reheater, and of course a closed circuit condenser with a near vacuum (1 psi) post-turbine pressure. But to do that we're not talking about a working pressure of 300 psi and a working temperature of 427 degrees; we're talking about supercritical conditions - - a working pressure of 1000 psi and superheat temperatures up to 1800 deg F.

And we're also talking about a multistage steam turbines that can have efficiencies of 92-94% at full load. But at less than full load the efficiencies will become much less -- like maybe half?

So, my question is. . . .could you give some of the parameters for this supercritical steam plant that you propose to send speeding across the countryside at 80 mph? Like temperatures, pressures, superheat, regeneration, reheat, steam turbine design, and so on?

And oh yes. . . .I also have my slide rule in my desk. It wasn't a Pickett though -- I got the latest, greatest Deci-lon model.

[Anonymous]

Wow, never would have thought that.

[MichaelSol]

QUOTE: Originally posted by Lotus098

I just wany to point out when you say diesels were not the major factor for reducing the number of emploryees. Don't forget the engine crew, on a long train that required more than one steamer it required a crew for every loco while a desel only required one crew for the lead unit (not counting manned helper units). Perhaps not the number one reason, but certainly a top one.

Well, that's interesting from the standpoint of the "exception" I referred to above.

The smallest decrease in railroad employment, 1947-1972, of all classes of railroad employment, was the engine crews. That is, engine crews were the single least improved of all classes of railroad employment categories. Indeed, crews decreased by a percentage fairly closely resembling the drop in carloadings over the same period. Engine crew employment decreased by 48%, carloadings handled decreased by 43%. It is arguable that it might have been no different, under steam, with the lower carloadings with consolidation of trains.

The crew number decrease compares highly unfavorably to the between 84% and 95% improvement in virtually all other categories of railroad employment over the same time period.

At the margin, the "improvement" in crew employment as a result of dieselization was remarkably small, tiny, considering the similar decrease in traffic, and this slight decrease was substantially lower than the productivity improvements in all other areas of railroad employment.

Best regards, Michael Sol

[Anonymous]

I just wany to point out when you say diesels were not the major factor for reducing the number of emploryees. Don't forget the engine crew, on a long train that required more than one steamer it required a crew for every loco while a desel only required one crew for the lead unit (not counting manned helper units). Perhaps not the number one reason, but certainly a top one.

[Murphy Siding]

Had the dieselization process gone on at a slower pace (if EMD's marketing hadn't been so succesfull), say, as replacement of steam locomotives as they reached the end of their usefull lives, would diesel manufacturers have had to produce better models sooner? The thought that comes to mind, is that EMD didn't seem to develop the GP 7 until the competion forced them to.

[MJ4562]

QUOTE: Originally posted by MichaelSol
There were, however, a series of specific management decisions for which detailed studies exist. For the 100-ton hopper car, the 1981 AAR study referred to previously. For dieselization, it is H.F.Brown, "Economic Results of Diesel Electric Motive Power on the Railways of the United States of America," Proceedings of the Institution of Mechanical Engineers, 175:5 (1961).

I participated in an update of Brown's study in 1975 in which we brought the figures forward to 1973. Brown's conclusion was that, "in actual practice, dieselization has added to the financial burden of American Railways" at a time when they could not afford it. That is, for road diesels, the operating savings generated by cheaper fuel costs, lower maintenance costs, and increased productivity savings, were overwhelmed by the additional marginal costs of financing the purchases.

Thank you for finally providing specifics. I look forward to reading the article.
Now that you've clarified your argument it makes a lot more sense.

[MichaelSol]

It appears I neglected to mention "studied ignorance."

What is interesting is that from a productivity standpoint, with one exception, "machinists, boilermakers, electricians, etc." showed the smallest productivity gains of any class of railroad employment, 1946-1972 according to Kent Healy in Performance of US Railroads Since World War II. p. 185.

Yet, dieselization is touted at one of the most significant forces for reducing employment, as you can see by the above comment, and yet that is simply not true. Employment related to motive power lagged nearly all other classes of railroad employment in terms of employee reductions.

However, as the old saying goes: "failure has no father."

Best regards, Michael Sol

[Anonymous]

There were a lot of railroads for which the decision to dieselize was the correct one at that time. You can second-guess them all you want with the benefit of fifty years of 20-20 hindsight, but for the Southerns and the GM&Os and the PRRs and the Milwaukee Roads and all those dependent on a lot of old, obsolete steam power - even those who had a good quantity of what would be considered modern steam power - a lot of them would not have lasted ten more years - twenty at the outside - if they had to do business with steam in the 1960s and 1970s. Labor costs and inflation made the big difference. The labor cost savings alone in the 1950s can be quantified - go back and look them up. The data are available.

The whole point is moot and has been for decades. Lets move on.

Old Timer

[MichaelSol]

QUOTE: Originally posted by Murphy Siding

Michael Sol: What do you make of the fact that the downside of dieselization never has gotten much publicity? Railroads (and railfans) tend to take it as a given that it was the right decision, at the right time. You mention that railroads incured additional labor and and facility costs in the mid-1960's, due to aging diesel fleets. Can you expand on that a little? Thanks

Railroads are poor historians and have little inclination to introspection.

Gabriel Kolko offers a good example. Generations of railroaders and rail historians, as well as academicians of all types, believed the original Interstate Commerce Act was anti-railroad. Indeed, it was touted for purely partisan political purposes as a triumph of the Progressive movement.

Kolko pointed out in The Triumph of Conservatism, that a substantial, compelling body of evidence existed to show that the reverse was true: that the original ICC Act was the result of railroad pressure and demands to control "cut-throat" competition between railroads.

Now, why did Kolko figure that out, and no one else did?

Which railroad mechanical officer wanted to confess that his decision was wrong? These jobs are as political as any county sheriff: you commit careers to business judgment decisions. Nobody hardly ever says "oops." Not to stockholders and investors after you just wiped out their investment.

And, which company was spending, literally, millions of dollars on both advertising and studies to show the compelling advantages of rapid dieselization? Call it propaganda, but what is propaganda designed to do? And who was funding the other side of the story?

Conventional wisdoms are compelling and controlling. That has nothing to do, ever, with whether they are correct or not.

Rail fans?

As near as I can tell, railfanning is a labor of love. Isn't love blind?

Best regards, Michael Sol

[Anonymous]

Thank you again MichaelSol for clearing things up. I think I see what you have been saying and found some of the answers.

[Murphy Siding]

Michael Sol: What do you make of the fact that the downside of dieselization never has gotten much publicity? Railroads (and railfans) tend to take it as a given that it was the right decision, at the right time. You mention that railroads incured additional labor and and facility costs in the mid-1960's, due to aging diesel fleets. Can you expand on that a little? Thanks

[MichaelSol]

QUOTE: Originally posted by Lotus098

All right let's calm down. Basically you have said that railroads should not have switched to diesels because it caused them to loose money.

That's correct Dave. What I specifically said, on December 20, was this: "doesn't that offer support for the proposition that management entered into an important decision with regard to the timing and extent of dieselization without a full understanding of the facts, based in large part on demonstrated errors in the cost/benefit study assumptions."

The "timing and extent" is an important caveat. The Brown study cited above determined that in the case of yard locomotives, the investment had an improved ROI compared to comparable steam operation. It was in the case of road diesels that the opposite effect was seen. Further, the primary detriment was not only the surprisingly short economic service life of the road diesel compared to steam, but the fact that financing was so different than for steam and particularly in the instance where machines with useful service lives of 10, 20 or even 30 more years, which were paid for, were scrapped in favor of machines with 8-10 year economic service lives (for their intended use) and for which the companies incurred substantial long term debt.

This debt represented something that had not substantially existed before. It was spent to replace something the railroads already had and had already paid for. It is tough to argue that rate of return is not going to decline on an accounting basis when perfectly good assets are scrapped and their depreciation accelerated accordingly, i.e. "the write-off." And there was a lot of good steam, with a lot of years of both accounting and service life left.

That is what has been remarkable about this thread on that basis alone: not a single acknowledgement by experienced people that ROI would probably inevitably decline during a period of substantial changeoever of a substantial portion of a company's undepreciated asset base.

There would be a decline in ROI on that basis alone, before even getting to the later phenomenon of service life problems, depreciation recognition, and refinancing of new equipment while old equipment is still incurring finance charges because of the unexpectedly short service lives.

That substantial numbers of adults, inside and outside the industry, couldn't/can't see that the process is just about inevitable under those circumstances, tells you something about this industry.

QUOTE: Some facts I think are pertinent and needed to determine this.
How much more does a diesel cost to maintain than a steam engine in the shops?
Is this more than what is saved in maintenance on the road (i.e. things like water towers)
How much more did a diesel mechanic get paid, that you average roundhouse grunt that worked on steam engines?
What was the difference in fuel costs between the two?
You also stated that diesel locomotives had to be replaced sooner than a steamer. So what are the numbers on this?
How long did a steamer last compared to the average diesel of the era?
I know maybe these all can't be answered, or vary depending on the road, but definitely something to consider.

They have been answered and they have been considered.

The point of citations is to offer a source. In the case of your questions, I provided a direct cite to an important study by one of the most respected and well-known professional engineers (at Gibbs & Hill) of his generation on precisely the points raised by your questions.

The point of that particular citation is not just to offer answers to all your questions, but to offer a useful look at how information is gathered, analyzed, and processed, and conclusions derived in an engineering context.

Based on your questions, that process would be at least as useful to you as the statistical information. I suggest you go to interlibrary loan. It would be a useful education for you. And it is a good rule of thumb as well: always go to the source.

Best regards, Michael Sol