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Thread: Class 1 Mergers

  1. #1
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    Default Re:Class 1 Mergers

    I voted never happen, but anything can happen. I am not sure too much more is going to happen. With the growth the industry is experiencing, I am not sure we are going to see the the Class I's eating each other as has been the case in recent years.

    It will be interesting to see.

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    Default Re:Class 1 Mergers

    I think it will help, but I also think it will only happen on the continental scale. Think NAFTA type mergers. I doubt very much if the regulators will approve any mergers between the UP, BNSF, CSX or NS. Further mergers involving Canadian or Mexican railways are a possibility.
    Heart of flame, blood of steam, sinews of steel, the iron dragon thundered across the realms, throwing down tyrants and slaughtering despots, until finally, at World's End, it paused in thought. Gazing across the void, it sounded a triumphant blast, befor

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    Default Re:Class 1 Mergers

    I would think the Government would step in if the big players merged and major rail operations in this country started heading towards a monopoly...
    Bryan
    “Simplicity is the ultimate sophistication.” ~ Leonardo da Vinci (1452–1519)

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    Default Re:Class 1 Mergers

    Maybe sometime down the line, we might see one of the East coast railroads allowed to merge with one of the West coast railroads. I don't see two competing railroads like NS and CSX being allowed to merge, as that would create a major monopoly. But in the way that things operate today, someone might be able to make a cross-country system work much better than two split systems.

    But I don't have any predictions to make at this point.

    ---jps

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    Default Re:Class 1 Mergers

    i believe if anything it will be Hurt. Just look at the BN-SF and UP/SP mergers. It is awash with redunant trackage. And worn equipment. The thing that is and will be interesting is too see how long these 2 super-rr's as i like to call them will hold on.

    NS and CSX have the right idea on mergers. Try not to accquire a ton of redunant trakage. As does KCS. Granted all 3 of these railroads contain redundant trackage. Just not the east to west conflag of BNSF and UP
    Candy Gandy...did u know with a bus(12 ga.) u can stop a train??

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    Default Re:Class 1 Mergers

    I think Bryan nailed it - the government would step in to prevent a railroad monopoly by the buying company. If any of the big 4 merged - they would become the super-road - therefore dramatically affecting the existing bib boys of railroading.
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    Default Re:Class 1 Mergers

    Quote Originally Posted by "Bryan"
    I would think the Government would step in if the big players merged and major rail operations in this country started heading towards a monopoly...
    I agree with Bryan on this one!! All the small struggling rail roads have been gobbled up by the big Class 1's and anymore mergers or buyouts would result in a monopoly......seriously doubt Uncle Sam will let that happen!!

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    Default Re:Class 1 Mergers

    There was an excellent article about this in Trains mag about 3 months ago.
    The worked out which mergers would be allowable under the "rules", who could afford to buy who and which would benefit and give draw-backs to each railroad.
    A very detailed article worth reading if anybody can dig up an archive.
    It certainly isn't a "closed deal". Mergers COULD happen between class 1's..

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    Default Re:Class 1 Mergers

    Grifff,

    What might these "Big 4" be? I ask because i can think of more then 4 major players in the Class I world...

    NS
    CSX
    UP
    BNSF
    CN
    CP
    KCS


    Quote Originally Posted by "mrg76"
    I think Bryan nailed it - the government would step in to prevent a railroad monopoly by the buying company. If any of the big 4 merged - they would become the super-road - therefore dramatically affecting the existing bib boys of railroading.
    Siderod (II)
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    Default Re:Class 1 Mergers

    Quote Originally Posted by "siderod"
    Grifff,

    What might these "Big 4" be? I ask because i can think of more then 4 major players in the Class I world...
    Maybe he thinks Canada doesn't count! ?? :P
    Bryan
    “Simplicity is the ultimate sophistication.” ~ Leonardo da Vinci (1452–1519)

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    Default Re:Class 1 Mergers

    I think this could go both ways. With the globalization of economies and the movement of intermodal across the U.S., a merger of class 1's could streamline operations and make cargo move faster. At the same time, we could see a CSX syndrome with what were once interchange yards becoming "outlaw" yards for dead trains. I believe that it would help make railroading more profitable by having on-line customers deal with each other through one company, cutting down on haulage fees and trackage rights.
    Unfortunately, this would be a complete tragedy for what matters most: model railroading. Imagine going to your LHS and only seeing Union America or Burlington and Norfolk. I would be custom painting for the rest of my life.
    While it may be a possibility, I'm hoping it doesn't happen. Just stay how it is.

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    Default Re:Class 1 Mergers

    As someone who spent his entire career in the business, rather than the operational, end of the railroad industry, I think any further mergers are unlikely for now. The four US players would each lose too much traffic if they merged with one of the others. For example, UP exchanges about the same volume of traffic with NS as it does with CSXT. If UP merged with CSXT, its NS traffic would be diverted to BNSF. The same applies if any of the US roads merged with one of the Canadians.

    Now, KCS is the last regional Class I, and it would fit into BNSF's business nicely, but at the risk of angering NS, especially. BNSF would not care if UP objected, but NS would feel threatened as well, as KCS would make a nice fit with it as well. Unlike CR, there is no way to split up KCS.

    There were forty years of relatively little merger activity, from 1920 to 1960, and I think were are going to see a similar period that began in 1995. After 2035, who knows? I'll be 94 then, if I'm still around. :wink:

    Put the MODELING back in model railroading.

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    Default Re:Class 1 Mergers

    no more mergers people!

    simply because the fact that jobs are probably lost in mergers and lots of great roadnames and paint schemes are gone forever!

    bn comes to mind... :twisted:

    MC

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