America is completely schizophrenic and unpredictable on merger policy, IMO.
One one hand, they quietly let Walgreens and CVC acquire their way to becoming a retail pharmaceutical duopoly.
Last I checked, Americans are pretty POed about how they get totally screwed on their meds.
On the other, the place goes insane at the thought of two freight railways joining end-to-end.
I can't think of another country in the world that doesn't have a trans-con railway..,,,ever since the late 18th century.
You can lay the blame squarely on one thing for that locked gate: Canadian government.
1) Lac Megantic. A precedent liability of $10 million per fatality was imposed on random parties, including CN and CP who had precisely NOTHING to do with it.
What might you think the penalty would be for CP if it hit trespassing rafters on its own tracks, given the precedent this crowd of vindictive, self-preservationist lunatics just set?
2) The provincial BC government, in its ever-competent way, finally got around to reading the document they had agreed to 3 months ago (as sworn to by those present at the table) ---- this on the Friday morning of the long weekend & start to the season ---- and simply renegged on it. Simple fact.
So per 1), CP installed a gate. Millions of dollars of liability, imposed by lying, incompetent governments, is not acceptable.
Rail "Brotherhoods" aren't dumb. In the short term, they spin every accident that is clearly the fault of one of their members as evidence of a lax, greedy, and irresponsible railroad industry for not already having PTC in place.
Shame shame -- the outraged politicians pose --- the incompetent dues-payer keeps his job --- yadda yadda yadda.
When PTC finally shows up, after the railroads pay tens of billions on it, the racketeers then extort job security for ALL their dimwits to remain in the cab reading the newspaper or looking at porn.
So that when there's an accident...and PTC will most certainly not stop it....they can still say they blacked out and didn't know what happened.
Correction...CSX shareholders will have a tough year.
CSX management will have the exact same lucrative year they always have.
"...NTSB, in making its determination of the cause, availed itself of the services of Stephen M. Jenner, Ph.D., to investigate and determine the human performance issues involved in this derailment...."
"....Dr. Jenner believes, and wants you dinosaurs and humans alike to believe, that although the locomotive engineer can’t remember what happened or why, that although the locomotive engineer operated his train properly throughout the period of the emergency radio communications and for another 3 minutes after the communications ended, that the likely cause of the engineer’s loss of situational awareness is the distraction of the radio communications between SEPTA 769 and the train dispatcher.
"...Radio communications are integral to safe train operations. You might as well be claiming that the operation of other trains is distracting, and that we need to isolate every locomotive engineer from the work environment he or she is trained to assess and respond to. We might as well quit railroading altogether. That’s where speculation gets you back to the Stone Age."
So the German mega-conglomerate is buying U.S. "Franken-seed" behemoth Monsanto. A chemical / pharmaceutical / agriculture juggernaut that will dictate the quality of everyday life in the United States. From Europe.
And this won't get NEARLY the press that putting two pissant railroads end-to-end did. Because those companies have been buying all the ...ahem..."support" they need. For years.
God bless 'murica, idiots.
"....Curse Hunter Harrison and one may as well curse steam power that replaced wind, or internal combustion engines that replaced steam. Harrison embodies the economic concept of creative destruction, a disruptor of the status quo substituting the more efficient for the less efficient—the free market’s messy means of delivering progress. It’s also the stuff of National Transportation Policy."
Yikes, Snap, and Ouch.
"....Harrison improves profit margin through more efficient use of assets, such as scheduling trains to smooth operating peaks and troughs. At CP, he parked 600 locomotives—almost $2 billion in the previous management’s capital investment—while handling more traffic. Says [Snehal Amin, of Houston-based WindAcre Partnership] : “Throwing money at problems, such as purchasing more locomotives, and their attendant additional crew and maintenance costs, is the easy, short-term way to address congestion. It’s also expensive. It’s better to use what you have more efficiently, but that requires hard work and an ownership mentality.”
Since his 2012 arrival at CP, Harrison improved CP’s operating ratio (operating expenses as a percentage of revenue) from last place (77%) among Class I’s to second (61%). Industry best is CN (58%), where Harrison trained his successor, Claude Mongeau. By contrast, NS (73% in 2012) barely improved, finishing last among Class I’s in 2015 (72%)..."
Great article....you'd all hate it.
Only one point I would quibble with...CP has now parked a total of 665 locomotives, not 600.
Connacher just filed for bankruptcy....Penn West perhaps as soon as the end of June.
Yup, being insulted and indignant at the SU offer was a shrewd move, Ferguson.
But NOW is when efficiency really shines.
"...CSX continues to target a mid-60s operating ratio longer term." --- CSX CFO, speaking today.
The only difference between this BS and the exact same figure spouted by NS is that NS was forced into assigning an actual number and date to it...65 by 2020. And if either of them achieve these, which I bet they don't, they'll still be a minimum 5 to 7 points behind the best.
That's 5 to 7 cents LESS per dollar of revenue that they book as op. profit. As they only make around 30 now, 5 to 7 is a big chunk. And that's the excess they are consciously PLANNING to leave on the table...not just ending up leaving it (or more) there because that's how things went. .....Yikes.
Report released yesterday on the Amtrak crash in Philly that killed 8 people concludes that the engineer was distracted so much by "radio chatter" that he forgot to pay attention to the speed of his own train that then went into a curve at over 100 miles an hour.
This is the insidious, unreported evil of a union. They went to the mattresses for this idiot, and strong-armed the NTSB into a conclusion that is utter nonsense. If listening to a radio causes your eyes and brain to completely shut down, you are simply not fit to be a locomotive engineer.
Instead of firing his RRSSS, and charging him with manslaughter, they turn the report into another call for universal PTC technology....notably, at the cost of the entire railway industry, not the government.
And the public and media simply accepts this BS at face value.
Brakes had nothing to do with this....idiocy did.
He was likely on his smart phone, probably looking at porn.
But as a unionized dufus, he's golden.
Of course, Squires also said on the very same call:
"...65 is the starting point for us. That's what we've said we're going to try to achieve by 2020."
Saying that he'd "try" to be at the 'starting point' by 2020...if you're satisfied with that BS, you deserve the lies you get.
Moody's just downgraded rail from Stable to Negative, in part because of "unprecedented declines in coal volumes"...down 37% in April. Moody's now (conservatively) forecasts a 25% decline in coal for the year.
Coal is a big deal for NS.
FYI, in late January, analysts were immediately skeptical of Jim Squires new "5-year plan" as lacking credibility, even as he presented it:
Brandon Oglenski, Barclays Capital "....We're still struggling with the coal guidance. I think there was a question earlier about how do you get to a negative 1 CAGR when you're guiding 15 down this year? Clearly, 4Q was pretty challenging here, even after you take out the restructuring charges."
Later in the conf call, Squires stated: ...."Let me just say this about our plan. It is a dynamic, flexible plan. If we do not see the growth in revenue because our coal volumes trend worse than we are expected, or for whatever reason, we will push even harder on the cost side. It's a flexible plan. We can dig deeper on the costs if we have to. We are intent on achieving the results we have outlined today."
Well, Squires now officially has some serious "flexing" to do.
And you folks have a painful "reality check" in store for you.
Empty suit and a complete fraud. He will set records for the money he makes on the speaking circuit, but at least the rubes in the audience will have paid him with their own money.
It is in deep shi+, and may cease to be unless it gets a lot of concessions from its lenders.
And Penn West is a far, FAR better run entity than Canadian OIlsands was.
You COS putzes really dodged a bullet, despite the inspired efforts of your "leaders".