Trains article about CSX this month

"CSX seeks a silver bullet: The East After Conrail, Pt 1"

I found this to be an excellent piece by Tom Murray. He zeroed in on the problems they've had that are worsened by their failure to stick with plan of action that doesn't provide instant relief -- and their continuous search for one that will.

I'm not so sure. I was waiting for someone to raise the topic...
After almost ten years from inception to buy-out, in most other industries there would have been some integration plan that anticipated changes in traffic patterns simply by synergy. It shouldn't be that big a stretch to expect that a lot of freight that originates in the southwest or southeast but was trucked into NY/NJ/PA might go back to rails.
I'll accept the confusion in databases but only so far. The railroads have methodology to determine where their rolling stock is, and how to communicate with other railroads. If the culture was radically different between Conrail and CSX, and senior management still wanted to pursue the acquistion, this could have been anticipated as well.
I know structurally a railroad is hard to compare to other businesses. So be it. But buying in by overstretching resources and then starving subsequent capital investment is a familiar enough pathway to failure.
I'm interested in seeing the Norfolk Southern perspective in next month's issue.

RichM wrote:I'm not so sure.

Not so sure about what exactly?

Oh sorry, I thought that the article was making a lot of excuses for CSX's botching the integration, when a lot of the problems were structural and should have been considered prior to the integration period. I could be wrong, but lately TRAINS seems to take small swipes at CSX and UP, but looks for the silver lining when there isn't one apparent. The article on UP a month or two ago maybe set me off, as it was a rehash of the same stuff during the UP-SP meltdown. It'll get better because it has to. The insanity definition: repeating the same procedure and expecting a different outcome.
Also, the Powder River coal dust discussion in this issue: it's BNSF's fault.
That's why I'm interested in seeing the perspective from the NS side. I only wish NS had bought Piedmont years ago instead of USAir!

You'll get the NS perspective next month. Although NS had their own cross to bear, they seem to have handled their share of the CR split fairly well in recent years.

It's always seemed strange to me that Snow and Goode pushed for the CSX buyout of CR because their corporate cultures were supposedly similar. The Trains article exposes that fallacy. Also, Trains beats up CSX and UP for good reason- they can come across as overly brash and pushy, especially when one considers the struggles each has had since the late '90s. I think Don Phillips et al are trying to practice "tough love" on CSX and UP in the hopes that they'll take the criticism seriously, and use it to make the necessary adjustments. Honestly, CSX got the most useful piece of CR and I'd love to see them use the Water Level Route to its fullest potential.

I take issue with Murray's saying that CSX announced it was "buying" Conrail in 1996.

If I recall, the proposed deal was touted as a "merger of equals" in all of the press releases I saw.

Here's one of them:http://websites.i2020.net/~csx/newsrel.htm

John W. Snow, chairman, president and chief executive officer of CSX, said, "This merger of equals represents a strategic combination that will provide excellent value for our customers and our shareholders, and is consistent with sound public policy. This is the right merger at the right time between the right companies."

Conway and his crew tried to duplicate the successes they had at Conrail by basically doing the exact same things all over again. The CSX management structure pushed back against this attempt to recreate CR within the CSX shell. The Conway/Spiegel approach plain didn't work on the other, pre-merger parts of the system -- as Murray aptly points out in the article.

I talked with many CSX managers at the time, and they predominantly resented the over-abundance of CR people in Jax. When Ron & Co. resigned, things changed back to their previous state in the blink of an eye. (Local Area what?)

My thoughts are that CSX has suffered mostly due to their tendency to react to the latest numbers (make that over-react) rather than to search out and correct the real reasons behind the variances at hand.

NS definitely has risen above that approach.

I agree that CSX got the best part of Conrail. They have squandered that advantage, I'm afraid.

Thanks folks, I think we're all in agreement. Matt, I think CSX and UP get better than a fair shake in TRAINS, maybe because their front line supervisors tend to speak more actively to the press than their counterparts at NS or BNSF. I too agree that while NS got more of the assets, the NYC east of Cleveland offers superior grades, etc., and with the esisting former B&O into Philadelphia, CSX may have squandered an early advantage.
Back to the article, I also question the frame of reference concerning single track operations on CSX. If you look at the railroad west of the mountains and south of the Ohio River, maybe, but the coastal north-south routes and coal routes east all have or had multiple tracks or alternative routings. Further, the former SAL was severed in Virginia but still remains a potential alternative to the overloaded ACL. There are solutions, they just require a long term investment.

RichM wrote:There are solutions, they just require a long term investment.

Not truer a word has been spoken. Especially so when one considers that, generally, American Railroads started with a 'build it fast, build it cheap, we'll improve it later' mindset. E. H. Harriman understood this and UP is reaping the rewards of what he did to the Overland route. Now that his SP-UP dream is realized it's past time for Omaha to start this effort anew.

CSX needs to learn this mentality and learn it fast. The ACL mainline down the East Coast was once a double-track speedway. Aside from that I can't think of another CSX main line which received such an improvement, i.e. Southern's "Rat Hole" division improvement of the 1960s. CSX's rationalization of the 1980s certainly didn't help. CSX lines in the southeast have really become a 'wooden axle' railroad. I find it ironic that CSX announces their capital investment program after the Trains magazine article. Coincidence? I don't think so.

Speaking of Trains magazine, since Jim Wrinn has come aboard the gloves seem to be off and I applaud his effort. Another periodical, Railway Age, is the mouthpiece for the industry and cannot afford to be critical. Trains has always been in that nebulous area between railfan and railroader and not beholden to either. Mr. Wrinn has been critical of CSX's strategy in the Southeast and it's about time someone did so. Trains is more than just pretty pictures and anecdotes from railfans. It is also the views and experiences of real hardboiled railroaders whose opinions mean much more than a post on a BBS. Mr. Wrinn has saved at least one subscription. At this rate he will accomplish much more.

I find it ironic that CSX announces their capital investment program after the Trains magazine article. Coincidence? I don't think so.

To think that CSX would announce capx projects in reaction to a Trains Magazine article is not realistic. And aside from the fact that a major corporation would not be swayed so quickly and so strongly by the railfan press, capx planning takes months and sometimes YEARS of preparation and analysis. CSX's planning for infrastructure expansion has been a long time in the planning. Same thing with spinoffs... it's not like one day the CEO decides to get rid of a secondary line or branch. These things are thoroughly researched and evaluated and while the decisions are not always right, they are not planned in a vacuum.