Guilford Transportation Industries - November 1981

Dereco was N&W's holding company for D&H and EL only, as far as I know.

-otto-

MEC407 wrote:The B&M was never part of Dereco... or was it? The N&W article on Wikipedia says that Dereco consisted of D&H, EL, B&M, and some others... but that's the first time I've seen B&M mentioned as being part of Dereco, and the article doesn't cite a source for that part, so I find it kind of suspect.

Hey, if it's on the Internet, it must be true...

Your suspicions (and Otto) are correct. Dereco was a holding company that owned the D&H and EL on behalf of the N&W. The N&W never owned the B&M, indirectly or otherwise. At one point in the late 1960s there were proposals for a possible B&M-D&H-EL merger, which might be what that Wikipedian was thinking of, but nothing ever came of it.

That's what I thought.

I went ahead and fixed the wiki article accordingly.

I wish they would block whoever it is who keeps getting the stories wrong on Wiki!

mick wrote:I'm not saying things are so bright and rosy on the ST/Pan Am, just that Crew Reductions were going to happen no matter what, all the railroads were doing studies on them, and in the end, the unions might have ended up with a better situation had they bargained more instead of trying to keep things the way they were forever.

Well, maybe -- but I'm skeptical. I believe it wasn't just crew size and cabooses (er, buggies on the B&M) that the ST lease imposed. That whole deal was from the bottom of the deck, as I see it. Yeah, it was legal, I guess -- but underhanded nonetheless. It was an outright (and successful) attempt to break the union contract, and ushered in a new era in labor relations (backed up by "Saint" Ronald Reagan himself when he ordered a halt to the strike).

I'm just saying that I don't believe the results GTI got would have ever happened through above-the-board negotiations. It was a smash and grab robbery, in my opinion. That's all -- just my opinion as someone who was on the periphery at the time and knew a lot of the players.

Here's an interesting piece in the UTU News:

Springfield Terminal Accused of Fraud
A federal district court has been asked by a supplier of rail cars to put Springfield Terminal Railway and Boston & Maine Corp., alternatively known as Guilford Transportation and Pan Am Railways, under control of a court-appointed receiver in order that the rail carrier, privately held and controlled by Timothy Mellon, pay its bills.

TomNelligan wrote:Hey, if it's on the Internet, it must be true...

Indeed... here's a nice little story Tom put together for us of B&M on the Eve of Guilford...

http://railroad.net/articles/railfannin ... /index.php

-otto-

ecouter wrote:Here's an interesting piece in the UTU News:

Springfield Terminal Accused of Fraud
A federal district court has been asked by a supplier of rail cars to put Springfield Terminal Railway and Boston & Maine Corp., alternatively known as Guilford Transportation and Pan Am Railways, under control of a court-appointed receiver in order that the rail carrier, privately held and controlled by Timothy Mellon, pay its bills.

"Old News" http://railroad.net/forums/viewtopic.php?f=55&t=54521

mick wrote:I'm not saying things are so bright and rosy on the ST/Pan Am, just that Crew Reductions were going to happen no matter what, all the railroads were doing studies on them, and in the end, the unions might have ended up with a better situation had they bargained more instead of trying to keep things the way they were forever.

IMHO, the biggest contributing factor to Guilford's 1988 loss of the D&H was Guilford's hard-nosed confrontational attitude toward labor negotiations. When their unilateral attempt to impose ST work rules on the D&H was rebuffed by the courts, they closed up shop and went home to New England. It's my belief that IF they had been a little more patient and diplomatic in their labor negotiations, they would've eventually gotten everything they wanted and the D&H would be a part of Pan Am Railways today. This is strictly my own personal opinion. But, the ironic fact remains that virtually all the work rule changes Guilford wanted to make on the D&H eventually happened anyway.

Otto Vondrak wrote:"Old News"

Ah yes. So it is. Sorry about that, Otto. But it does support my low opinion, albeit a personal assessment, of the common business practices of the firm in question.

Remember, Springfield Terminal was not a Non Union carrier, it was represented by the UTU.

The UTU and the BLE basically hate each other ( the orginizations, not the members). Would the UTU allow this kind of turmoil just to get the BLE off of Guilford?


Don't automatically assume it was Guilford who was totally to blame in all of this. Some still say the ST thing was a sweetheart deal between Guilford and the UTU. Also, remember that although the ST had lower pay rates than B&M or MEC, anyone affected by this got Mendocino Coast payments to equal their average Gross Earnings for the last five years they were employed. So, a lot of guys actually worked a lot less, they didn't want to exceed their previous years earnings, so they stayed home and got paid instead.

President Reagan was obligated by law to step in and order and end to the strike, as it had spread to other railroads and the MBTA.


A lot of times I wonder, where were Saint Ted Kennedy and Saint John Kerry during all of this? Nowhere to be found. Why didn't they, as the state of NY did, (I forget the man's name Schumer maybe?) step in and prevent Guilford from leasing it's properties to the ST until all labor issues were settled? All I know is that Kerry visited with the strikers at East Deerfield in '87 and they asked him that very question. When he failed to provide an answer, he was booed and quietly left.

This can be disscussed on and on, but the fact is, there are two sides to every story,no one side is ever 100%.

mick wrote:President Reagan was obligated by law to step in and order and end to the strike, as it had spread to other railroads and the MBTA.

Yeah, I was a Conrail manager working at Potomac Yards during that period, since the Guilford/D&H guys had pickets up there. It wasn't fun for anyone, believe me -- except maybe the president of the RF&F who was getting his jollies running trains between Richmond and Alexandria.

mick wrote:A lot of times I wonder, where were Saint Ted Kennedy and Saint John Kerry during all of this? Nowhere to be found.

Good question.

mick wrote:(I forget the man's name Schumer maybe?)

Not Schumer, it was most likely D'amato you were thinking of, the senior senator in New York until 1999.

guilfordrailfan wrote:IMHO, the biggest contributing factor to Guilford's 1988 loss of the D&H was Guilford's hard-nosed confrontational attitude toward labor negotiations. When their unilateral attempt to impose ST work rules on the D&H was rebuffed by the courts, they closed up shop and went home to New England.

I was just 11 years old in 1988, but I remember reading the news about Guilford casting off D&H into bankruptcy and thought to myself, "Gee, that was quick." And I also thought it was odd that Guilford made no attempt to save or recoup assets. One morning, they cut the moorings at Mechanicville and set the D&H adrift. They didn't even hang around and wait for a buyer. Apparently the connections at Buffalo and Montreal and Washington, DC were not valuable enough or worth the hassle of maintaining the railroad in between those points.

Later on, I was surprised that NYS&W did not more aggressively pursue the D&H. I have a feeling that someone in Washington tapped Walter Rich on the shoulder and said, "Uh, no, sorry Walt, you're not getting this one. Just enjoy what you have, we'll make sure you keep this lucrative container traffic (as long as that lasts), but someone else is getting the D&H. But thanks for the three and a half years of directed service, that was cool."

Hey, when I was 11 I never read a newspaper, and wouldn't have known an asset from a hole in the ground. Good for you, Otto.

If we ask, though, why they did it that way, the answer is (I believe) because they could. They didn't take the assets because they wanted to avoid the liabilities that were tied to them.

And you may be right about Walter.

Otto Vondrak wrote:

guilfordrailfan wrote:IMHO, the biggest contributing factor to Guilford's 1988 loss of the D&H was Guilford's hard-nosed confrontational attitude toward labor negotiations. When their unilateral attempt to impose ST work rules on the D&H was rebuffed by the courts, they closed up shop and went home to New England.

I was just 11 years old in 1988, but I remember reading the news about Guilford casting off D&H into bankruptcy and thought to myself, "Gee, that was quick." And I also thought it was odd that Guilford made no attempt to save or recoup assets. One morning, they cut the moorings at Mechanicville and set the D&H adrift. They didn't even hang around and wait for a buyer. Apparently the connections at Buffalo and Montreal and Washington, DC were not valuable enough or worth the hassle of maintaining the railroad in between those points.

Later on, I was surprised that NYS&W did not more aggressively pursue the D&H. I have a feeling that someone in Washington tapped Walter Rich on the shoulder and said, "Uh, no, sorry Walt, you're not getting this one. Just enjoy what you have, we'll make sure you keep this lucrative container traffic (as long as that lasts), but someone else is getting the D&H. But thanks for the three and a half years of directed service, that was cool."

I think the main reason that Guilford bankrupted the D&H was because they couldn't get the same Union changes they got with B&M and MEC. D&H had a lot of hilly, rounabout mileage and not a lot of on line business, so it was more or less an overhead route vs a money making originating/terminating/local road like the MEC. I think to make a go of it, the D&H almost had to be part of a bigger system like the CPRS that could feed it traffic, vs a local smaller road like the NYSW. I will say that the NYSW did do a good job running the D&H back in the late 80's under a bankruptcy judge, but I think they would have had a tough go of it trying to run it long term. To be honest, the NS probably makes the most sense running the line, so that it can finally be a line that can compete with CSXT/CR's waterlevel route/B&A.

roberttosh wrote:To be honest, the NS probably makes the most sense running the line, so that it can finally be a line that can compete with CSXT/CR's waterlevel route/B&A.

The N&W/NS has had its hands in the D&H (and B&M) (and their successors) for many years as these carriers provide(d) access for its competing, profitable New England franchise, whether it's been via Dereco, providing operational support, and, now in its most recent iteration, creating Pan Am Southern. There have been many issues which have informed how N&W/NS arranged their relationship with both carriers and their successors. But, no matter how N&W/NS structures their relationship, or who is actually running the operation, it's the elemental issues such as route structure, physical plant, and overhead clearances, and the resultant economics, capacity and service characteristics that dictate how well this alternative route competes with CSX's water level/B&A route into New England., ie., as a slower, lower-capacity, lower-overhead-clearance, higher (operational) cost alternative.

Edit: Both routes are 20'6" to New England, with Pan Am 19'6" to Ayer and CSX's B&A going to 20'6" to Westborough under a deal with the Commonwealth of MA.