Reciprocation in the 21st century, a thought exercise

[D.Carleton]

Many are the ALCo fans who, in part at least, attribute the demise of the company to reciprocation between the railroads and the parents of the locomotive manufacturers; EMD was owned by GM and GE made their own motive power. To help ensure they would get freight from the non-railroad ventures of GM and GE they made sure to buy their locomotives leaving ALCo out in the cold.

Fast forward to present day. GE is still GE. However, up until recently EMD had been on its own as a holding of a financial institution. Now that EMD is the property of a property owned by Caterpillar could we expect to see, improvements in product notwithstanding, more favor by the railroads toward EMD?

[Cowford]

Short answer would be no. Best as I recollect, ALCO died a natural death based on, among other issues, market size (the market could/would not support more than two players), competitive position (GE and GM had bigger resources), and product quality (EMD and GE products were more reliable, easier to repair). While a rail user, CAT is not a big enough shipper to influence locomotive purchases. Besides, those cross-business links sound powerful in theory, but in reality rarely work. Take GE... the GE Appliance guy's performance is based, in part, on cost control. If GE Transportation called him up and told him to start shipping by (more expensive) truck because railroad X screwed GE Transportation out of a locomotive deal, the Appliance guy would either politely ignore or tell the Loco guy to pound sand.

[Allen Hazen]

Umm... I'm inclined to agree with Cowford that Caterpillar is enough smaller than GM (in the old days) and GE that it probably doesn't have enough leverage, as a shipper, to influence railroad locomotive purchases.

Historically... I can't remember where I read this, but there is (was?) a big GE appliances plant in Louisville, and that its location there was not coincidentally related to the Louisville & Nashville's purchase of a large number of first-generation diesels from GE... well, since this was back in the late 1940s or early 1950s, when GE was in a consortial arrangement with another company to produce mainline diesel locomotives for the North American market, from Alco-GE.

----

I have a feeling that "reciprocity" of the kind mentioned may be legally dubious (the words "conspiracy in restraint of trade" come to mind). So I suspect (a) it happened, and (b) it will be very hard to document particular cases: some things don't get put on paper.