• Proposed Norfolk Southern NS Canadian Pacific CP Acq/Merger

  • For topics on Class I and II passenger and freight operations more general in nature and not specifically related to a specific railroad with its own forum.
For topics on Class I and II passenger and freight operations more general in nature and not specifically related to a specific railroad with its own forum.

Moderator: Jeff Smith

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  by newpylong
 
Zeke wrote:And long term success is measured by an entrenched and underperforming management team with a dead flat operating ratio for the past 10 years and the worst labor relations on the planet ? Just admit NS is like a sports team to you fellows and you cant stand to see it shaken up.

"In the land of the blind the one eyed man is king."
No I won't be able to stand reading the articles about the layoffs, yard closures and otherwise ill effects that WILL come from this transaction. Anyone who thinks otherwise is simply on a different planet. You say you were/are a railroader how can you look yourself in the mirror and support this?
  by mtuandrew
 
Fred Frailey (of Trains) agrees with Zeke, at least - this month's magazine features one of his editorials arguing against "Balkanized" American freight. Same argument that drove the early 1900s consolidations and the USRA, that drove the 1960s-70s mergers to disastrous heights, and that drove the last round of 1980s-90s mega-mergers.

Or maybe Fred Frailey IS Zeke. :P
  by Jeff Smith
 
Financial Post

FAIR USE SNIPS:
U.S. Army opposes CP Rail’s proposed Norfolk Southern takeover due to national security concerns
...
In a letter to the U.S. Surface Transportation Board (STB), which must give its approval before any merger can go ahead, the army argues the proposed takeover raises national security concerns since both railroads own “hundreds of miles” of strategic rail lines and serve major military installations.

“The potential certainly exists for either the (CP-NS) merger or a downstream merger to adversely affect national defense,” says the letter, signed by David Dorfman, senior civil engineer for the army’s Railroads for National Defense program.
...
The army argues that the STB should take national security into account, and requests that it “does not permit de facto common control to occur before legal common control is thoroughly analyzed and approved.”
...
  by Fritz
 
Hello,
No surprise here:

http://finance.yahoo.com/news/u-justice ... 51769.html" onclick="window.open(this.href);return false;

Fair-use quote:

"The U.S. Justice Department on Friday urged a regulator to reject a voting trust Canadian Pacific Railway Ltd has proposed as part of its takeover bid for Norfolk Southern Corp, saying it could hurt competition and would violate rules ..."

Have a good weekend (mine just got better reading this),
Fritz
  by Zeke
 
A new article by Frailey in Trains magazine points out the failure of the CN + BNSF merger plan and posits the CEO's of both roads were politically naïve when it came to marching across the political minefields set up by the other railroad's and there lobbying efforts, influencing the powerful political class in D.C. Yep, it is starting to look like the dynamic duo will be heading back north empty handed.

Of course a hostile run on the NS board could occur or enough trouble stirred up by NS shareholders may place EHH in the drivers seat of NS. The annual meeting should produce some real fireworks. But what all of this sturm and drang have spotlighted is the ineptitude of the present NS management. I would figure a big management shake out is inevitable, if the merger gets tossed, as I believe around 70 % of NS is owned by institutional investors and they may demand it.
  by newpylong
 
Yet this has nothing to do with lobbying or political minefields. Anyone with an IQ over 5 that has followed Hunter Harrison knows what is in store for Norfolk Southern should a merger occur. You obviously have a thorn in your side and/or want to benefit financially. I am perfectly fine with my dividends and as an ex railroader I actually have a heart for these people.

There will be no fireworks, it will be rejected just like it has at the board level. EHH will go home whining like he has before and set his sights on his next target.
  by Zeke
 
If this pre STB hearing maelstrom is an indicator of the political winds blowing it bodes ill for the deliberative processing of this or any merger proposal. When you have the UP CEO saying publicly he will " do everything in my power to stop this merger " and lobbyist employed by NS,UP and BNSF swarming over congress beating the anti merger drums this is a defeat for congressional intent in creating the STB in the first place.

Someone who understands publicly traded companies realizes that management of said companies primary responsibility is to maximize return on investment. NS management is entrenched and like the Fred Green CP is fumbling around trying to save itself and to hell with the shareholders and employees. Todays CP is not exactly the Gulag archipelago when you have engineers with 5 years service knocking down 140 K a year and conductors with one year service making 100 K. Yes I agree NS will be slimmed down and employees will be laid off but EHH's precision scheduled railroad will grow the business and bring laid off employees back on line. Most of the bloat at NS is corporate and line supervision which will be the first to go like EHH did at CP. However most of EHH's trimming at CP was through attrition and he refused to outsource the signal dept. like UP did saying, " We are a railroad family and the status quo is fine there are plenty of other places to save money before we go to outsourcing." Love him or hate him he is a pure railroader.

Fred Frailey thinks some of the deep seated animas the other roads have for him is directly related to his success's and the unwanted spotlight he has cast on their ineptitude and he is an up from the ranks Frisco car inspector showing up the stuffed shirt Yale and Harvard business crowd good old fashioned American horse sense can't be learnt from books.
  by Zeke
 
I am sure there will be several detailed post mortems as to what really happened behind the scenes. The pity is the shareholders take it in the neck on this one as I envisioned 2 billion dollar net quarters down the road with The Great Helmsman at the throttle. I figured the entrenched NS rats wouldn't abandon ship without a knock down drag out fight. Would have loved to see EHH work his magic on the bloated and feral NS hog.
  by MACTRAXX
 
Dave:

Just remember that Trainorders.com is a pay site and you have to be a member if the number of posts goes
above the first open page that anyone can view...

See the active topic on the NS-CP acquisition/merger in the General Class 1 Discussion section.

MACTRAXX
  by MEC407
 
Who will he set his sights on now?

It seems like he wants to merge two railroads just for the sake of merging two railroads, regardless of which railroads those happen to be.
  by justalurker66
 
"We have long recognized that consolidation is necessary for the North American rail industry to meet the demands of a growing economy, but with no clear path to a friendly merger at this time, we will turn all of our focus and energy to serving our customers and creating long term value for CP shareholders," said CP Chief Executive Officer E. Hunter Harrison.
http://www.progressiverailroading.com/c ... ern--47898" onclick="window.open(this.href);return false;

It is good to see him end this folly before he does too much harm to either company.
  by Fritz
 
Hello,

"... we will turn all of our focus and energy to serving our customers and creating long term value for CP shareholders," said CP Chief Executive Officer E. Hunter Harrison."

Hey, there's a novel idea: running the railroad, serving the customers, and supporting his existing shareholders.

Thank goodness, he didn't get the opportunity to trash the NS just so he could avoid running his existing railroad.
Cheerfully,
Fritz
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