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  • Illinois Central Gulf - Why Was It Done?

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This forum is for discussion of "Fallen Flag" roads not otherwise provided with a specific forum. Fallen Flags are roads that no longer operate, went bankrupt, or were acquired or merged out of existence.

Moderator: Nicolai3985

 #1128809  by v8interceptor
 
MILW261 wrote:What was the reason given the merger of the Illinois Central and the Gulf, Mobile, and Ohio into the Illinois Central Gulf? Was it simply the elimination of a competitor (IC wipes out GM&O) or something more complex?
I am no expert on railroad mergers but note that in the 1960's and 1970's there were a number of industry mergers of lines running parallel to each other and competing head-to-head. The prime example would be Penn Central (and look how well that worked out). It was difficult in the pre-Staggers act environment for the newly combined RR to efficiently dispose of underused or duplicated trackage so efficiencies of scale were offset by having a lot of low revenue mileage to operate and maintain.
 #1190901  by Allen Hazen
 
Re: "The prime example would be Penn Central (and look how well that worked out)."

Well, to be fair... you should also look at Seaboard Coast Line and Burlington Northern, which seem to have worked a bit better. Management of the IC and the GM&O would have been aware of L&N's takeover of the NC&StL and Southern's takeover of CofG: for IC to merge GM&O would have seemed like an obvious, thoroughly conventional, move.