Progress Rail reportedly acquiring EMD

DutchRailnut wrote:hmm GE actually builds the same 710 engine, but The Cat purchase will pretty much kill any two stroke, including the 710 engine.

GE makes service parts for the 710 engines, such as power assembles, turbos, injectors, etc.

The best number I can find is "under $500 million" as a sale price from EMD to Berkshire and Greenbriar. Now they are selling for $820 million, quite a tidy profit.

DutchRailnut wrote:hmm GE actually builds the same 710 engine, but The Cat purchase will pretty much kill any two stroke, including the 710 engine.

I very much doubt that. The 710 engine is considered a worldwide industry standard for high HP locomotives and the SD70ACE/M-2 is one of the core product lines CAT is buying EMD to acquire..
I'm sure there will eventually be CAt engines in EMD locomotives but while there is demand for the 710, they will produce them. CAT is a well managed company known for giving their customers what they want...

EMD has been working with the U.S. Department of Energy to get the 710 to meet Tier 3 and Tier 4 (and also working on improvements to the 265):

http://www.transportation.anl.gov/engin ... gines.html

Hopefully this means any future 'EMD' locomotives that CN buys aren't the same garbage that the current ones are.... that FIRE computer needs to be lit on fire...

Here is Wall Street Journal coverage of the acquisition (may or may not be able to access):

http://online.wsj.com/article/SB1000142 ... 00050.html

Brief passage:

• Caterpillar Inc. is pushing further into the rail business by buying a maker of locomotives, and taking on General Electric Co. in the process.
  
  On Tuesday, the heavy-equipment maker said it would pay $820 million for Electro-Motive Diesel, in a bet that freight transport will grow as the economy strengthens.
  
  Caterpillar, which with this deal has invested $2 billion since 2006 in the rail and transit sector, said its acquisition of Electro-Motive Diesel will make it the second largest locomotive and rail services provider in the U.S. behind GE. The investment adds a production component to Caterpillar's existing rail repair and service business.
  
  "This acquisition represents the latest step in our strategic plan to aggressively grow our presence in the global rail industry," said Caterpillar Vice Chairman Doug Oberhelman, who takes over as chief executive of Caterpillar in July.
  
  Electro-Motive, which was owned by Berkshire Partners LLC and Greenbriar Equity Group LLC, had sales of $1.8 billion in 2009. Berkshire and Greenbriar bought Electro-Motive Diesel from General Motors Corp. in 2005, paying $201 million.
  
  In 2006, Caterpillar spent $800 million in cash and stock to buy Progress Rail Services, a railcar maintenance and repair business. Electro-Motive will become a unit of Progress Rail.

Earlier in the topic, I noted a reference to potential labor issues. To my best knowledge the United Auto Workers hold contracts on both the Caterpillar and EMD properties. While obviously there are differences regarding both rates of pay and working conditions between the two contracts, it is not a case of having a "non union" company merge with a "union'. Sort of related is the merger of Delta and Northwest Airlines. Many crafts on the former Delta property, including Flight Attendants, are non-union. On the Northwest side, "we're all Union". This one, especially to any of us here with Labor Relations on our CV's, will be fun to watch as it plays out.

Apparently, CAT wants to retain the identity of EMD rather than simply marketing locomotives under the CAT brand. However, one must wonder if prime movers will come painted 'any color you want so long as it is Mustard Yellow ".

Finally, I would hope that CAT's wide experience in export markets will open doors for more EMD exports; that of course translates to "more AMERICAN exports".

I don't think EMD needs any help in export markets from CAT. It might streamline some operations as both EMD and CAT furnish engines for Vossloh for instance. Both GE and EMD export businesses are what's keeping their respective plants open right now.

DutchRailnut wrote:
your probably right but with tier 3 looming the 710's will be short in production.
no way to get a two stroke to comply, without massive loss of horsepower.
current units would be grandfathered but new once need something better and Caterpillar may be just the answer.

Are you making this up? Going from a 2-stroke to a 4-stroke engine does not magically lead to meeting emissions standards. GE's long-standing advantage in previous decades was fuel economy, not emissions. That difference is now small, in addition to being secondary to emissions.

Nor does reducing horsepower lead to improved emissions. EMD uprated the Tier-2 710 to 4300 hp, from 4000 hp in most previous 70-series units.

Both the GEVO and the 710 have already passed Tier 3 in tests, and work is already underway to bring the 710 to Tier 4. At a certain point, both the GEVO and the 710 will require exhaust after-treatment to meet increasing emissions standards.

Don't forget that there are roughly twice as many 2-stroke EMD engines currently in service as there are 4-stroke GE engines. That kind of install base has a huge impact on whether an engine line is upgraded or discontinued.

The 710 might be able to pass Tier 4 without the after treatment equipment but just to be fair they'll have to include it. Sort of like the dog muzzle law where the dog had to have it hanging from the leash not necessarily over its mouth. Cat might benefit from EMD's program with Argonne labs where they have set up test rigs using both a single 710 and "H" engine power assemblies with every thing else variable. CAT has had a lot of trouble getting their ACERT system to work so they could use the help.

FWIW, EMD has claimed in the trades that the 710 can meet Tier IV. The GEVO can't without a full complement of aftertreatment equipment, which no doubt will require a re-design of the platform.

SS

By: John Pletz June 21, 2010
Caterpillar's Electro-Motive train-building division eyes McCook for new plant

Electro-Motive Diesel Inc. is scouting for a new facility to assemble locomotives, and the company's McCook headquarters is a contender, people familiar with the matter tell Crain's.The company, which announced June 1 its acquisition by Caterpillar Inc. of Peoria, would need a U.S. facility to assemble locomotives to qualify under the "buy America" provision of the federal stimulus program, which is pouring more than $8 billion into rail projects.

http://www.chicagobusiness.com/cgi-bin/ ... leId=33571

(Edited by moderator: Please don't copy/paste entire news articles, please just include a "fair use quote" and then a link to article---Thanks! CGR)

How to post and quote news stories from the web

Nelson Bay wrote:Manufacturing workers at Electro-Motive earn $14.50 to $18.50 an hour.

That's it? That's about the same as what many municipal garbage collectors make. $14.50/hr is barely a living wage in today's economy. Sheesh.

Any job is better than no job, but I'm really surprised that the wages at EMD are as low as that.

Welcome to the era of austerity. If you will not work for $14.50/hr there are at least five guys behind you who will. Right now 22% of all males between the ages of 25 and 65 are completely out of work. As said, “any job is better than no job.”

$14 and change, maybe $15 is what my salary averages out to and I and 911's for 15 towns, all the cellphone companies and dispatch 3 seperate police/fd/ems departments.

Something like this suits you better? Geez!!!

Electro-Motive Diesel Inc. is scouting http://www.chicagobusiness.com/cgi-bin/ ... (Edited by moderator: Please don't copy/paste entire news articles, please just include a "fair use quote" and then a link to article---Thanks! CGR)