A complex, confused relationship between UP, Milw, RI, and CB&Q.
According to conventional thinking, the decision by UP to cut CNW out of the UP interline passenger operation was because of failure by CNW to maintain their mainline track. The trains were promoted as UP trains. They were painted as UP trains. When the passengers were knocked off their feet on CNW track, it was the UP that caught the public's ire.
Ben Heinemann was the Darth Vader of Granger Railroads (can I say that here?). His concept of competition was to buy your competitor and shut him down, employees and public be damned.
I remember reading that the Milwaukee management was excited when Milwaukee got the passenger business between Omaha and Chicago with the UP. They were expecting the freight business to follow.
For some reason I still don't understand, that didn't happen. Maybe it was because the Milwaukee managed to miss all the big cities in Iowa, while both CNW and RI served them. Maybe Gilbert can shed some light on this.
The CB&Q could not be the main Omaha-Chicago carrier for UP, because CB&Q was probably UP's biggest competitor. Only the CB&Q had a straight-shot main line all its own between Chicago and Denver. CB&Q had a tremendous presence in Denver, including its own Denver-based subsidiary, C&S.
The GI trains were trains interchanged between UP and CB&Q at Grand Island, NE. Grand Island was definitely a UP town. It was UP's major mainline yard before Bailey Yard was built at North Platte. CB&Q at Grand Island consisted of a secondary, single-track mainline that crossed the UP double track main. The CB&Q line ran between Lincoln and Alliance, Nebraska.
The CB&Q line crossed the UP at Grand Island on a grade-level crossing that was a headache for both railroads. Now the BNSF line crosses the UP on an overpass on a regraded main line. The CB&Q passenger station sits where the line used to run at street level, and is now a museum. There is still an interchange track, but it sees little use. I worked out of Grand Island in 2007 and 2008. The UP station, of course, has been bulldozed.
In the time since the passenger trains went to the Milwaukee Road, the CNW main line across Iowa was allowed to continue to deteriorate. The double track Chicago-Omaha main was replaced with single track.
The UP continually propped up the RI, probably in self-defense (against the CNW). When I worked for the RI, the UP held the title on our newer power. They also did motive power deals with the RI. When the UP went to trade in old power to EMD on new units, they actually traded in worn out RI units. The would-be trade ins from UP were then sent to RI. EMD didn't care, they were all obsolete as far as they were concerned. But UP could actually maintain their older units, so it was a step up for RI. I remember riding in the cab of an ex-UP F9 on the RI that was still in UP colors. UP also sold RI some surplus E units.
Milwaukee Road's primary interchange partner for transcon freight was ATSF. ATSF, of course, was the arch-competitor of UP outside of the Granger sphere.
As the eighties wore on, Milwaukee's Chicago-Omaha traffic fell. Milw had no place to go beyond Omaha. Meanwhile, RI's Omaha-Chicago main line was purchased by Iowa Interstate, bankrolled by on-line customer Pella Rollscreen.
Anyway, as I understand what happened, things came to a head when CNW track conditions hurt freight business on UP. UP gave an ultimatum to CNW. If CNW would not upgrade its Chicago-Omaha mainline, UP was going to make a bid to buy Iowa Interstate and bypass CNW all together.
The result of this was the CNW was forced to reinstall its Chicago-Omaha double-track mainline, with money borrowed from UP. This then led to CNW's acquisition by UP.
The Milwaukee Road's Chicago-Omaha mainline is now gone. The CNW tried to buy the Milwaukee Road, and thought they had it sewn up. But at the last moment, SOO Line, backed by CP Rail's deep pockets, bought the Milwaukee.