Guilford Transportation Industries - November 1981

For those who are interested in such things, I am including this legal transcript, of the Dereco "mergers", as recorded in the U.S. Courts: http://bulk.resource.org/courts.gov/c/U ... 6.831.html

IMHO, Guilford was overly optimistic about the potential of an end to end merger involving Maine Central, B&M and D&H, because both the B&M and D&H had either obvious or disguised weaknesses that only became painfully apparent after the system was finally put together. The D&H was waging a hopeless fight with Conrail for survival, and the B&M may have looked better than it really was because of the fact it enjoyed protection under court overseen bankruptcy re-organization.
Prior to Conrail, E. Spencer Miller, the President of the Maine Central, wanted no part of the B&M, unless he could get the Portland to Worcester route if the B&M liquidated. His other wish, I believe, was that B&M join Conrail and Maine Central could interchange with CR at Rigby. Either way he saw no future for his railroad as the eastern end of an east to west New England regional system. I think history has proven him correct in that view. If the PAS joint venture falls short, then his vision may come to pass. It almost did in the 90s with the Worcester Gateway. There wasn't enough traffic to justify two east/west routes in and out of New England 30 years ago, and there's even less now. Pan Am might have been better off JVing with CSX, and mothballing the tunnel and the entire west end. A rational, efficient system would exclude the B&M Fitchburg Route entirely, and concentrate on the CSX west of Worcester being fed by Pan Am. CSX's route has the clearances and the track structure to handle all types of traffic, while the PAR Freight Main is limited.

Like many basic tenets in railroading economics and traffic, I don't think much has changed into this present time. Railroads make good money when they originate a "railroad commodity" (heavy &/or, voluminous &/or, long-haul, etc.), like Maine printing paper. From the way things have progressed, I'd have to say that Pan Am, too, views the world through the eyes of its "MEC" franchise, that is, that's where their money is, while the ex-B&M freight main west of Ayer is a lower-profit bridge route from Maine to the NS and the short-haul terminating road for NS. The D&H remains in a tough spot as a bridge road for NS and CP, the least profitable, in general, traffic to haul.

IMHO, PAS will "succeed" by bringing Pan Am's west end (and their access to N.E.) from the brink of collapse and riding the rising tides of increasing freight rail demand (in a long-haul market) and CSX's strategic rate increases aimed at improved financial performance, though not for the higher-rated, premium traffic held by CSX's big competitive advantage.

ecouter wrote: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.

My news sources came from two places back then: the funny pages in the Daily News, and "Arrivals & Departures" in Trains magazine.