Locomotive sales wise, GE is running circles around EMD. This is so because with relative product parity, a lower price usually wins the sales contracts. A lower price comes from more efficient, streamlined manufacturing processes. When EMD increases its efficiencies, sales increase. But GE in turn enhances their efficiencies, and the overwhelming sales ratio returns in favor of GE. Is there, though, a magical point where no future efficiencies are possible, and sales will equalize? Will sales then shift to crew comfort and their handling preferences in operations? Or, perhaps the preference of shop maintenance crews?
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jsoderq wrote:Actually it has a lot more to do with the fact GE finances theirs, EMD doesn't. Would you buy a car financed or for cash?
Actually, a better analogy would be either financing your car through the dealer or financing it on your own through your bank or credit union. Although I have paid cash for my current vehicle that usually isn't a realistic option for railroads purchasing locomotives or rolling stock.
Electro Motive has a chance to catch GE, by being able to innovate and utilize the template used by Japanese and European builders. They will put your choice of engine, your choice of generator and traction motors together and even do it at a facility of your choosing. Motive Power does this on their units as does NRE, they get the components together, and then they are built where you wish, when you need them. For the overseas market, this can mean considerable savings in shipping costs, since the components are no where near as heavy and expensive to ship as an entire locomotive. It can mean that more "home made/manufactured" components can be used. The savings come from not having to ship some components at all, and the jobs stay at home. Which can be very important to some customers.
The big thing is that EMD has GM off it's back.
GE has a lot more to offer than just locomotives. GE rents freight cars, rents maintenance equipment and vehicles, offers insurance, offers fleet management of locomotives and railcars built by anyone, and a whole host of other services. When a railroad "bundles" a purchase of locomotives with some of these other services they can leverage a much deeper discount than can be obtained with just a locomotive purchase.
EMD cannot at this time offer anything equivalent. Years ago GM used the opposite method. That is, "If you don't buy our locomotives you do not get any of our parts or automobile traffic." The justice department had to step in to stop that practice.
JonathanS wrote:Years ago GM used the opposite method. That is, "If you don't buy our locomotives you do not get any of our parts or automobile traffic." The justice department had to step in to stop that practice.
I heard about this. Does anyone have any additional information?
cpbloom wrote: JonathanS wrote:Years ago GM used the opposite method. That is, "If you don't buy our locomotives you do not get any of our parts or automobile traffic." The justice department had to step in to stop that practice.I heard about this. Does anyone have any additional information?
Look at the Wall Street Journal Articles at this web site.
http://www.carofthecentury.com/gm's_first_crack_at_futuristic_engineering,_the_train_of_tomorrow.htm
EMD can be less expensive than GE. Here is an excerpt from a Kansas City Southern filing with the SEC last year; KCSR is the US Railroad subsidiary, while KCSM is the Mexican subsidiary.
On August 23, 2006, KCSR entered into an agreement with Electro- Motive Diesel, Inc. to acquire 30 locomotives to be delivered to KCSR from June 2007 through September 2007 at an aggregate cost of approximately $61.4 million. On August 14, 2006, KCSM entered into an agreement with General Electric Company to acquire 30 locomotives to be delivered to KCSM in December 2006 and January 2007 at an aggregate cost of approximately $63.7 million. We intend to finance these locomotives through equipment lease financing consistent with past practice. On September 28, 2006, KCSR and KCSM entered into a letter of intent with General Electric Company to purchase an aggregate of 80 locomotives to be delivered in late 2007 through August 2008 at an aggregate cost of approximately $160.8 million. The letter of intent also provided KCSR and KCSM with an option to acquire an additional aggregate of 40 locomotives. If such option is exercised, the additional 40 locomotives would be delivered in 2008. Each of KCSR and KCSM anticipates entering into definitive agreements with General Electric Company in the fourth quarter of 2007 with respect to these locomotives. On November 29, 2006, KCSR entered into a letter of intent with Electro-Motive Diesel, Inc. to acquire 70 locomotives to be delivered to KCSR from October 2007 through April 2008 at an aggregate cost of approximately $140.9 million.
Talk about motive.
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trainfan1221 wrote:I've heard that modern EMDs are fine, if not a bit weird looking. If you ask me, the problem with both is that they only catalog a couple (or is it only one) types of locomotives.
Times have changed a bit since 1965 when EMD announced its "biggest news since 1939" with the unveiling of the 645 engine. EMD listed nine (count 'em) models in its catalog: SW1000, SW1500, GP38, GP40, SD38, SD40, SDP40, SD45 and DD40. Both SW's had a Flexicoil truck option, the DD40 was later withdrawn and replaced by the SDP45. GE offered the U28B/C and U30B/C, Alco had a fairly broad Century Series line-up. Only EMD actively went after the switcher market.
You're right, EMD and GE only catalog mainline freight locomotives now: EMD with the SD70M-2 and SD70ACe, GE with the ES44AC and ES44DC, the ES40DC on NS is a de-rated ES44DC. All of the other categories are covered by the small builders: MPI, NRE and Railpower.
CSSHEGEWISCH wrote:You're right, EMD and GE only catalog mainline freight locomotives now
EMDiesels has the GP20D (switch engine) in addition to the road diesels.
JT22CW wrote: GE still has the Genesis on their catalog; it's even available with the GEVO now and AC traction as standard. (No buyers as yet, though.)
GE still has the Genesis on their catalog; it's even available with the GEVO now and AC traction as standard. (No buyers as yet, though.)
I thought that GE cant make the Genesis desing anymore because it dosnt meet nose crash standards.
JT22CW wrote: CSSHEGEWISCH wrote:You're right, EMD and GE only catalog mainline freight locomotives nowGE still has the Genesis on their catalog; it's even available with the GEVO now and AC traction as standard. (No buyers as yet, though.)EMDiesels has the GP20D (switch engine) in addition to the road diesels.
The GP20D is sold under the EMD name but is actually built by MPI at Boise. It's an arrangement similar to that where White sold a line of road tractors under the White Freightliner name although Freightliner Corp was actually building them. The only GP20D's are owned by CIT Financial (in CIT blue) and are leased to UP in the Houston area.
How times have changed!
It feels strange to see the suggestion that the carriers might buy some EMD units just to keep GE from taking over the whole market. At least it does for me, because I'm old enough to remember the era when it appeared that some Alco and GE units were bought just to keep General Motors from eliminating any competition.
EMD may have used some heavy-handed methods to improve sales back in those days, but probably didn't need to do so. The working SP engineer I knew told me (in the 1970's) that the GE's he ran spent vastly more time down than did the EMD's, and were more trouble in general. By that time, of course, Alcos were hardly even in the picture on mainline freight.
As long as the new independent EMD is well capitalized, perhaps it will do a lot better than it would under GM ownership, and maybe it'll gain back market share. Nowadays, the General just doesn't look like an all-powerful force in the business world, and has plenty to occupy it in the automobile game.
mj5890 wrote: JT22CW wrote:GE still has the Genesis on their catalog; it's even available with the GEVO now and AC traction as standard. (No buyers as yet, though.)I thought that GE cant make the Genesis desing anymore because it dosnt meet nose crash standards.
JT22CW wrote:GE still has the Genesis on their catalog; it's even available with the GEVO now and AC traction as standard. (No buyers as yet, though.)
JT22CW wrote:They can't make the old Genesis (you can't make a grandfathered design as new); but there's nothing stopping them from making an updated, fully-compliant new Genesis. (Except lack of orders, that is.)
hey can't make the old Genesis (you can't make a grandfathered design as new); but there's nothing stopping them from making an updated, fully-compliant new Genesis. (Except lack of orders, that is.)
So they can still make it?? what is difrent about it?? did they strengthen the nose or something??
But if they got orders?? Would they have to make a new desing or would they use the same desing but make it meet crash test standards??????
Does anyone know what a current model Diesel - EMD or GE - has as a base price? Granted, that is a bit vauge but just curious for a ballpark.
Thanks,
My guess would be somewhere in the neighborhood of $2 million. That's cash, not financing, which would drive the cost up higher.
Funny. I can see a VP for motive power wandering into GE or EMD and getting hit up by a salesman... who promises a sweet deal on the latest GP or SD "after he talks to his manager..."
Hmpf...I'm really surprised that's all, though that seems to be the norm. Not that $2 million isn't allot of money, mind you, but I would have thought it would have been substantially more.
"Gimmie two!"
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