Asset Based v. Capital Based Strategic Thinking @ PAR

In what appears to be a reversal of a very long term trend the owners of Pan Am Railways appear to have shifted the corporate strategy from drawing capital out of assets to building capital value of assets, to include intangible intellectual property. I understand that some might say this is simply reflective of a change from one leader to another. However, this explanation entirely discounts discussion of what the current leadership's strategic perspective actually is. I think in historical terms we also have to admit that many of the properties and assets disposed of in the early years for GTI were either redundant, loss-producing or both.

Has PAR and perhaps Pan Am Systems in general made some kind of change from capital based to asset based strategic thinking?

Does PAR now see their legacy assets (branch rail lines and associated rail traffic and miscellaneous properties) as more valuable for the income and opportunities they provide than for the capital they could be sold for?

This appears to be the case in several areas (Lewiston Industrial Track, Embden rock quarry), to include the recent reintroduction of the "heritage" units which not only are "nice for railfans" and good for employee morale but also help maintain and rebuild the brand images of the legacy companies.

yes I think to an extent that is the case. They have trimmed so much "fat" off for 25 years really don't have much left. What they do have they have to work with to be profitable.

Interesting. That would then appear to imply that we can expect to see major investments in PAR's freight main lines to all system-wide endpoints.

Some of this already seems to be happening even on a self-funded basis, e.g. lines to Worcester, MA and improvements to the "Back Road" in Maine.

I believe the ties for the Worcester Branch were supplied by the MBTA, though not sure who paid for installation, tamping, etc. The main line west of Waterville is now in pretty decent shape for the most part with less than 50 miles of jointed rail left between Waterville and Mechanicville. East of Waterville is a different story, where it's pretty much 10 MPH all the way to Keag. I hear there have been discussions with the NBSR to have them operate/maintain east of Waterville through haulage or JV, but not sure that's going to happen any time soon.

I hear there have been discussions with the NBSR to have them operate/maintain east of Waterville through haulage or JV, but not sure that's going to happen any time soon.[/quote]

That would be great for employee morale. Haulage? Joint Venture? That means PAR crews would operate a NBSR train, for NBSR crews to operate they would need trackage rights or buy or lease it. That would not be so great for employee morale.

Not sure about the details, I just know that there have been talks where NBSR would somehow be involved with lines east of Waterville and that it may have been a way to get the lines rehabbed using non PAR Funds. My guess is that NBSR would be a haulage carrier for PAR between Waterville and Keag just like they are out of Saint John, except that those former PAR stations would be closed to PAR and not open to MMA, Irvings, etc.

What do you mean by "haulage carrier"?

Again, I don't know the exact details, but by haulage carrier I mean that PAR would probably maintain ownership and lease the line to NBSR, who would operate for PAR, but they would not show in the route. Similar to how the New England Southern operated Manchester to Concord. PAR still controls the traffic and for a few hundred dollars per car, doesn't have to maintain and operate on a lightly used stretch of the main line east of Waterville.

Among several other significant updates in Trains magazine (March 2012) Fred W. Frailey has a "Commentary" section (adapted from a blog post on TrainsMag.com) titled "Pan Am Southern is coming of age" which discussed Pan Am Southern's continuing improvements and expansion.

I have made several posts regarding Mr. Frailey's Commentary on PAS which included comments by Mr. David Fink, Jr., President of PAR.

I was very very surprised to read the following:

Quoting Mr. Fink: "Things we really didn't go after before, we are going after now. We had reduced the crew board by 20 percent and didn't hire anyone. Now the head count is the highest ever and we have more flexibility."

I'm not entirely sure about the contextual setting of the "20 percent" figure nonetheless I thought this was a very interesting comment. Clearly the changes we have observed over the past two or three years are indeed related to Mr. Fink's own leadership. It is as close as he has ever come to saying, "I don't do business the way my predecessor (his Father) did."

[EDIT]Here is a link to the "storefront" webpage for the March 2012 issue of trains.