Pan Am Railways, For Sale/Acquisition/Merger?

MEC407 wrote:Just some humor on my part — my feeble attempt at getting some laughs with a Pan Am locomotive patched with CMQ reporting marks. Tough crowd.

Lol....had me going...

Cowford wrote:

There's nobody else like [G&W] in railroading

Examples of "nobody else": Anacostia Rail Holdings, Iowa Pacific, Pioneer Railcorp, Watco, Omnitrax, Patriot Rail, RJ Corman, etc, etc.

I think it's more that G&W absolutely dwarfs everything in system size and expendable capital; Iowa Pacific is really the only comparable one, and they are still much smaller. I don't think any of those besides IP would be able to put up the capital and take the risk to buy into PAR, when PAR is either close to the size if not bigger than those companies' entire systems.

It'd be interesting to see if G&W would take a move at PAR, because they would end up being the dominant railroad in the region with the combined scope of NECR, SLR, and PAR (and even CSO if you expand the scope to all of New England). I do not believe that's the case anywhere else on their system in a similar way, so that'd be a new direction for them to go in; as said before, their empire is built off of scooping up what the big consolidated systems don't care to bother with.

QB 52.32 wrote:

CN9634 wrote:It is unreasonable to assume just because a company is large that they are willing to hold onto an asset that loses money.

....Or, provides no strategic advantage, leverage within the North American railroad network, or business leverage amongst other rail industry players. If CM&Q could replace for the mot part SLR's utility to CN in providing Maine access, then what else is there for the SLR to maintain its current configuration?

It's not that G&W would be willing to hold onto an asset that would lose money, but that they have the capital and resources to take in PAR and turn it into something that doesn't lose them money — and to do that without risking bankruptcy or otherwise severely compromising their fiscal stability if it were to go completely wrong.

Also, if G&W did buy PAR (or parts of it), the combined system (even if both weren't formally combined) could be able to offer things CM&Q wouldn't be able to by being able to bring traffic north/south and only having to deal with the increased costs of traversing two railroads; it's at least a possibility, a situation where the new system would be better than the sum of its parts.

I think a G&W acquisition of Pan Am is a very interesting proposition that also has a very high probability of getting approved by the STB.

Relative to the discussion of Maine's paper industry and its impact on New England's railroads:

Portland Press Herald wrote:Emery Deabay, a paper mill worker for four decades, sees the dismantled pieces of the old Verso mill in Bucksport leaving town by train day after day and knows the trains are taking what’s left of the state’s fading paper industry with it.

The state’s once-thriving paper mill industry, like American papermaking at large, continued its downturn in 2015 in the face of closures, digitization, foreign competition and consolidation.
. . .
Maine’s paper manufacturing industry employed nearly 13,000 people as recently as the early 2000s. The Maine Pulp and Paper Association said it now employs 6,150. There are fewer than half as many mills in the state as there were in 1980.
. . .
The closures affect Vermont, too, because many of the state’s loggers had been selling their products in Maine.
. . .
Industry representatives blame factors including government regulations and competition from places like China, Brazil, Germany and Finland, along with competition from iPhones and Androids. But Cathy Foley, group vice president for American Forest & Paper Association, said there is still room in the marketplace for U.S.-made paper products like to-go coffee cups and the holiday packages used by online shippers.
. . .
Sappi Fine Paper operates the largest mill in the state – a sprawling Skowhegan facility that’s the largest mill in the country that makes coated paper. It also has a mill in Westbrook that once employed more than 2,500 and is now down to a few hundred.

Read the rest of the article at: http://www.pressherald.com/2016/01/02/m ... ss-demand/" onclick="window.open(this.href);return false;

What about a Providence and Worcester takeover of the non-PAS portion of PAR? It seems like a natural extension of their existing system?

Great thread. To take a minor detour back to F-Line's 2024 map - why would the Belfast & Moosehead Lake be included? Seems more of a MEDOT lost cause than the Augusta Lower Road. Zero prospects?

woodeen wrote:What about a Providence and Worcester takeover of the non-PAS portion of PAR? It seems like a natural extension of their existing system?

They're definitely at least a possibility; to paraphrase what F-Line said earlier, they're largely debt-free and have large cash reserves, want to continue to be independent, and also wish to keep their system locally-oriented and contiguous. It'd be a pretty big boon to them:

• Access to basically every notable port in New England
• Access to both Worcester and Ayer for MA intermodal
• Becoming the second full-fledged north-south railroad in New England (the first being NECR)

Plus, as previously mentioned (I forget by whom), P&W has no qualms about running in passenger territory. Moreover, the potentials for PAR's future as far as traffic (read: intermodal) are pretty in line with what P&W is doing in its system right now. Lots of intermodal and unit trains.

Of course, hell if I know what P&W's intents are right now. I don't think they'd rock the boat themselves, though: if they were to do anything, it'd be in reaction to something else. They've been all about incremental, slow, steady gains and acquisitions.

YamaOfParadise wrote:

QB 52.32 wrote:

CN9634 wrote:It is unreasonable to assume just because a company is large that they are willing to hold onto an asset that loses money.

....Or, provides no strategic advantage, leverage within the North American railroad network, or business leverage amongst other rail industry players. If CM&Q could replace for the mot part SLR's utility to CN in providing Maine access, then what else is there for the SLR to maintain its current configuration?

Also, if G&W did buy PAR (or parts of it), the combined system (even if both weren't formally combined) could be able to offer things CM&Q wouldn't be able to by being able to bring traffic north/south and only having to deal with the increased costs of traversing two railroads; it's at least a possibility, a situation where the new system would be better than the sum of its parts.

CM&Q/Fortress provides a connection to both CN and CP, while SLR-SLQ/GWI only provides a connection to CN. Additionally, CM&Q provides CP access to eastern Canada while CN already has that with its own direct line independent of SLR. Bottom line is that CM&Q provides more utility than SLR and, therefore, would hypothetically generate more synergy and better performance in combination with PAR than would SLR.

MEC407 wrote:Uh-oh, guys... look what I just spotted in Derby, MU'd with a B23-7 and an LTEX GP35...

36-mec-506-gmd-gp40-2l(w).jpg

Too funny. What does the Big G look like when it is made into a C, and add MQ?

I see these posts and wonder where some come up with such speculation. Just because for the first time in recent memory that Pan Am is actually investing in District 1? I do believe the physical plant was just getting to the point where they had to do something, or the only thing that would be left keeping the track in gauge would be the gauge rods and grass

QB 52.32 wrote:

YamaOfParadise wrote:

QB 52.32 wrote:

CN9634 wrote:It is unreasonable to assume just because a company is large that they are willing to hold onto an asset that loses money.

....Or, provides no strategic advantage, leverage within the North American railroad network, or business leverage amongst other rail industry players. If CM&Q could replace for the mot part SLR's utility to CN in providing Maine access, then what else is there for the SLR to maintain its current configuration?

Also, if G&W did buy PAR (or parts of it), the combined system (even if both weren't formally combined) could be able to offer things CM&Q wouldn't be able to by being able to bring traffic north/south and only having to deal with the increased costs of traversing two railroads; it's at least a possibility, a situation where the new system would be better than the sum of its parts.

CM&Q/Fortress provides a connection to both CN and CP, while SLR-SLQ/GWI only provides a connection to CN. Additionally, CM&Q provides CP access to eastern Canada while CN already has that with its own direct line independent of SLR. Bottom line is that CM&Q provides more utility than SLR and, therefore, would hypothetically generate more synergy and better performance in combination with PAR than would SLR.

CMQ has no direct connection with CN, they use SLQ to access CN currently.

One could eat a bag of popcorn reading this thread...

Mikejf wrote:I see these posts and wonder where some come up with such speculation. Just because for the first time in recent memory that Pan Am is actually investing in District 1? I do believe the physical plant was just getting to the point where they had to do something, or the only thing that would be left keeping the track in gauge would be the gauge rods and grass

The discussion originated from much more than speculation over D1. It was originally brought up in the Pan Am Southern discussion. What would happen when NS makes it pan am SOUTHERN instead of PAN AM southern. It seems unlikely that an aging Mr. Mellon will maintain interest in the truncated railroad, especially if paper mills continue to falter. Hence our discussion. The link to D1 work is more about the fact that one of the things you do before you sell a house is open the cans of paint. The relatively minor trackwork programs in D1 are comparable to cracking the paint cans and sweeping the floor.

Many people more knowledgeable than I have speculated that Pan Am will not see 2020, at least not in its current shape. I think this is a pretty hard statement to disagree with, if for no other reason than that Verso still owns a mill in Maine. Never minding that NS just bought control of most of its access to PAS. Its going to be an interesting ride, I'm just looking forward to watching it all unfold.

Mikejf wrote:Too funny. What does the Big G look like when it is made into a C, and add MQ?

CN9634 wrote:

QB 52.32 wrote:

YamaOfParadise wrote:

QB 52.32 wrote:

CN9634 wrote:It is unreasonable to assume just because a company is large that they are willing to hold onto an asset that loses money.

....Or, provides no strategic advantage, leverage within the North American railroad network, or business leverage amongst other rail industry players. If CM&Q could replace for the mot part SLR's utility to CN in providing Maine access, then what else is there for the SLR to maintain its current configuration?

Also, if G&W did buy PAR (or parts of it), the combined system (even if both weren't formally combined) could be able to offer things CM&Q wouldn't be able to by being able to bring traffic north/south and only having to deal with the increased costs of traversing two railroads; it's at least a possibility, a situation where the new system would be better than the sum of its parts.

CM&Q/Fortress provides a connection to both CN and CP, while SLR-SLQ/GWI only provides a connection to CN. Additionally, CM&Q provides CP access to eastern Canada while CN already has that with its own direct line independent of SLR. Bottom line is that CM&Q provides more utility than SLR and, therefore, would hypothetically generate more synergy and better performance in combination with PAR than would SLR.

CMQ has no direct connection with CN, they use SLQ to access CN currently.

I'm curious, would it not be cheaper just to reopen the line to St Guillaume for a direct connection to cn? I know it does need some tlc, but they do own it and have customers on it.

PAR could be purchased by Conrail Shared Assets, which is jointly owned by NS and CSX. This would keep both NS and CSX secured in the New England freight business and keep the Canadian roads, most especially the CN to a minimum via the SLR. CSA New England would move to rebuild the entire mainline and improve clearances from Barber to Keag and avoid using the CMQ haulage via a newly rebuilt NMJ to Keag mainline to connect with Irving's railroads via their own direct interchange. The system could be based and operated from North Billerica. All of PAS would be sold to NS with Ayer being the central location of interchange between CSA New England and CSX and NS.