RailRoad merger - class project help needed

[stimulus]

Iam working on RailRoad merging project in my Strategy Management class.

My main focus is BNSF and I need to find a potential partner for it to merge with (CSX, CP, CN, NS, UP,...).
Here I need to first find any potential problems which BNSF is facing and how merging with CSX/CP/... will help it.

Any comments and suggestions are wholly welcome.

[Matt K Dettman]

If possible, Trains magazine ran an article in the July 2005 issue discussing just that; however the info might be a tad old. It's the cover story: "the merger puzzle," starting on page 30. If you can't find it in the library, then I suggest getting a photocopy of the article by calling 1-800-533-6644.

[LCJ]

Response to stimulus:

Read the annual reports of the Class I railroads. Read the financials with discernment -- looking for clues of those things you seek. Read articles in Railway Age, Progressive Railroading, and Trains. Then, well, you'll have to think about what you've read.

This is the work your class leader probably expects you to be able to do, I'm sure. The comments of anonymous posters on this forum are not really valid for research purposes. At least they wouldn't be if I were your teacher.

Not to be harsh -- but research isn't about asking others for help. It's about searching out the material you need to make your case. You have to be able to do that if you're going to actually use what you learn from Strategic Management.

That being said -- it has been commnonly stated that BNSF stands for Buy Norfolk Southern First.

[Komachi]

Speaking as someone who spent eight years of his life in post-secondary educational institutions, it never hurts to ask others for a little direction in your research... just don't ask or expect them to do the work for you.

Hopefully we can assist you in that respect.

I would also echo LCJ's commentary on quoting the postings on this forum and would point out that the internet in general isn't really the best to obtain sources, although it may allude to sources that you may want to investigate. There should be a building on campus, somewhere, full of copious ammounts of knowledge, mostly in those archane artifacts known as books... I believe it's known as a library. Seek out this building, utilize it's various resources including the keepers of knowledge, librarians, and you shall do well with your project.

(I say this not to be condesending, but as words of advice from someone who has "been there, done that" on a number of occasions. I had professors who deducted points for not having a variety of sources (books, magazine and newspaper articles, etc.) and berated us time and again that the internet was not the "be all, end all" resource for project/term paper research.)

I wish you good luck with your research and your project.

[trainwreck]

Consider geographical challenges--maybe the widening of the Panama Canal in 2011 will change traffic patterns. That might be a start for a merger catalyst.

[Engineer Spike]

I have a friend who likes to talk about the what ifs. Look at some of the proposed mergers, like BNSF/CN. They tried, but after the UP/SP and CR split into CSX and NS, the Government said no. One other example would be instead of Conrail. There was a proposal to reorganize PC, and then form MARC-EL. The point of his discussion is; what would have happened to traffic patterns, and to the competition. Would it have forced a new round of mergers?

[Engineer Spike]

I have a friend who likes to talk about the what ifs. Look at some of the proposed mergers, like BNSF/CN. They tried, but after the UP/SP and CR split into CSX and NS, the Government said no. One other example would be instead of Conrail. There was a proposal to reorganize PC, and then form MARC-EL. The point of his discussion is; what would have happened to traffic patterns, and to the competition. Would it have forced a new round of mergers? You can make some predictions, from a railroad map.
If BNSF and CN had merged, would they short haul CSX and NS? They could have avoided interchanging the cars at Chicago. They may have hauled them through to Montreal, or Toronto. This could have been the new interchange point. International containers may have then been off loaded in Halifax, instead of NYC/NJ, Philly, etc.
If that had happened, what would the others do? CP would then be a prime target. They have the connections to the western US carriers too. Their bonus it that they have a better presence in the east, with the ownership of the D&H.

[2nd trick op]

In my 58 years I've seen the number of "Class I" rail carriers in the US and Canada dwindle from about 120 to perhaps 15-20, and only seven of those could be characterized as major players. The more pro-business attitude in Washington in the years following 1980 is sometimes credited for this, but the "merger movement" can be traced much further back, at least to the days of the Truman administration. And the pressures that forced that "solution" began to mitigate around 1985.

Furthermore, technology and entrepreneurship has been (admittedly slowly) eroding the narrow definition of a rail carrier. The remaining majors will certainly fight any attempt to open their lines to all comers, but the nessage that some sort of major rebuiild of our entire rail system is necessary to deal with a fossil-fuel/mobility crunch that is just getting started seems more credible every day. That, in turn, could force some compromises, with the prospect of Federal participation used as an incentive. You might also see an entrepreneur attempt to knit a couple of shortlines/regionals in relatively flat country together.

Here are links to two tantalizing scenarioes:

http://www.railroad.net/forums/viewtopic.php?t=44412

http://www.railroad.net/forums/viewtopi ... c&start=30
(Page 3)

It's going to get very interesting; gives me one more reason to want to live to be a wise old geezer.

[freshmeat]

On long runs we like to play "what if!"

The on-going thinking is one of two Class I's. NS whcih was tried years ago and failed at the ICC level or some govt. agency and KCS.

NS is obvious for certain reasons. It allows BNSF to operate "seamlessly" from coast to coast. Altought I'm not familiar with freight operations in the eastern part of the country, BNSF may have to run more trains and shorter trains once out of Chicago. Right now the typical stack is around 7,000/8,000 feet long. I don't know how that would play with urban trackage.

KCS for its north/south routes, in and out of Mexico and to the port of New Orleans. Plus, KSC's partnership with TFM and the other Mexican Class I.

[umtrr-author]

I recommend seeking out the books "Merging Lines" and "Main Lines" as scholarly sources for the principles behind mergers (and opposition to and denial of same) which can then possibly be extrapolated to the present day.

These books aren't easy to find, but larger libraries may have them.

[Red Arrow Fan]

I recommend seeking out the books "Merging Lines" and "Main Lines" as scholarly sources for the principles behind mergers (and opposition to and denial of same) which can then possibly be extrapolated to the present day.

These books aren't easy to find, but larger libraries may have them.

These books are available on Amazon.com. I just got "Merging Lines" a few weeks ago.

[Otto Vondrak]

Iam working on RailRoad merging project in my Strategy Management class.

My main focus is BNSF and I need to find a potential partner for it to merge with (CSX, CP, CN, NS, UP,...).
Here I need to first find any potential problems which BNSF is facing and how merging with CSX/CP/... will help it.

Any comments and suggestions are wholly welcome.

Let's see if we hear back from our young friend. Perhaps all the work may have scared him off.

[Tadman]

If you want problems, check out the books about previous mergers:

No Way to Run a Railroad - by Binzen and Daughen

Wreck of the Penn Central

Erie Lackawanna: Death of an American Railroad (read the second half only if you're in a time crunch)

You'll have to abstract some of the reasons for failure, as the current regulatory climate, labor situation, and general state of prosperity is completely different from that of the 1960's. Also read "the Men who Loved Trains" by Rush Loving. It tells the story of Conrail and outlines the political fighting that comes with bankruptcy, merger, consolidation, and sale to NS and CSX. Those four books should give you the mindset to analyze a rail merger if you've got a sound business mindset.

[walt]

I would echo what has been said here with respect to the use of the comments you see posted here, and in other internet sites. The reason why professors assign reasearch projects, aside from the need to have a basis for grading, is to get students to find and read material, analyse that material and to then come to their own conclusions. What is said here can be helpful in conducting that analysis, but the conclusion you ultimately reach must be yours, and not ours. Additionally, for your research to be valid, you must be able to formally cite the material you analyse. In any event-- good luck, and let us know how it all comes out.

[atsf sp]

If your able to obtain the July 2005 edition of Trains Magazine, the main article was called the merger puzzle. It analyzed every possible merger between all class 1 railroads. Very inbteresting and helpful to your cause.