Railroaders' Nostalgia > Mad Dog Chronicle #306. Death of the SP

Well,  it has been over six months now   About time for another chapter in the mad dog chronicles.

A question was recently posed on another forum which some of you might be able to see... When did the SP die, or if you prefer,
fade into the sunset?   My response is that this depends on your perspective.   When were you born.  When and how did you first get to know the SP.  Through what filters were you viewing the railroad and what part of the railroad did you observe.   Labor, craft,  Management,  fan, photographer, modeler,  other rr.   Any or all of these will determine how you answer the question.

Technically the answer is simple:  September 12, 1996. When the U P. ACQUIRED the S P.   Note that I did not say merged with!
(yes I know about the name swap charade for tax purposes).  Soon after that the cars Sunset and Stanford were painted yellow,
Shortly after that I was working in Omaha and Harrimans picture on the twelfth floor of 1415 Dodge was smiling.

I was born in 1941 in Berkeley, California.  Had my first train ride on the SP when I was three.  Watched from the platforms in Berkeley and at the Oakland Mole.  For me the glory days of the SP were the 1950s and 1960s. Lots to see.... the end of steam,  the new diesels, the new paint schemes.   I first learned photography with the SP as my subject.  Started working for the SP as a switchman in the San Francisco Terminal.  Then joined Sp Management,  worked as a baby Trainmaster (ATM) in Eugene, Coos Bay and Colton all before 1970.

Perhabs the beginning of the end was the power shortages in 1974 and 75.  Perhaps it was deregulation and the merger of UP, MP, WP.   Certainly the failure of the SPSF merger attempts. And the Anschutz/DRGW acquisition could be viewed as an end point.

However,  I now have a different view. The SP, like an old soldier will never die, while is somewhat fading away it still lives  certainly its legacy still does in its route structure, history, photographs and until the last former born before 9/12/1996 dies the SP will not die.  It will still be changing every day since the days of the Big Four.

So, what do you think?

mdo. 2/5/16


 



Edited 1 time(s). Last edit at 02/05/16 20:10 by mdo.

Welcome back!  Its about time!!!  :-)
C

Carol Voss
Bakersfield, CA

Harrumph!   So what do you think?   What would the Budda say?



Edited 1 time(s). Last edit at 02/05/16 14:33 by mdo.

The ship was taking on water in 1982. Took a number of years of bailing efforts to try to keep it afloat, but it was no use. The ship was doom to sink.
Like the title song from Titanic.. my heart will go on for the SP



Edited 1 time(s). Last edit at 02/05/16 15:12 by WAF.

mdo Wrote:
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> Harrumph!   So what do you think?   What would
> the Budda say?
at what point did they dismantle the tower at Newhall and empty out the office building there?  I think he would select that time.  By the time the coup de gras was delivered to SP in 96' he thought the SP was long gone.  
C

Carol Voss
Bakersfield, CA

I grew up with the SP and worked there from '67-'92 when I switched over to Amtrak.  I think the beginning of the end started in the late 70s and got progressively worse in the eighties 
with the failed SPSF merger and the Rio Grande takeover.  Its slow single track railroad from California to Chicago could never compete with Santa Fe or UP with their shorter, faster, and often double track routes.  SP really did pretty good to hang on as long as they did.

Nice to see you back Mike.
I was in engine service and you could see more and more locomotives fail. No maintenance, etc. As I remember it BFB sold off the "SP Pipelines" Then Sprint soon followed.
Then the SP and Santa Fe were going to merge. New paint jobs on the engines, etc. Well, we all know what happened. When it was denied a lot of old SP management stayed with the Santa Fe. Well, with Krebs running the show, he got rid of the Land Company and a bunch of other big money companies. When he and his cohorts were done, all that was left were 2 rails and old broken ties and engines and cars in the same shape.

In steps "Uncle Phil" and he buys what was left and tried to res-erect the SP name, history, etc. It was too late. With the UP waiting in the wings and it wasn't long that they purchased what was left at fire sale prices.

I was always proud to work for the "Friendly". I saw a lot of changes but they were too slow in coming..I still have a few plaques and awards hanging from the wall (one was signed by you. It was an Eagle Eye Award)

After the UP took over it was their way or the highway. We have lost the monthly "SP Bulletin" and then the UP version. Now they can't even send out the calenders for us retired folks.

The UP was the death Nell for the the SP. 


Nudge 

Growing up in a WP family I always thought the SP was the enemy and the reason Dad didn't make enough money was the SP had all the traffic.  Our railroad was in worse shape by far when I started working for the WP in the track department in 1980 than the SP.  The “lime green” hard hats of the SP guys pissed me off too.  Just before the UP takeover of the WP I was working "Paired Track" between Weso and Alazon, Nevada and I got to know a lot of SP employees...even hung out at the Carlin, NV. beanery with the SP guys.  Still I "hated" the SP but not the guys.  SP just plain sucked with their black and red paint job...WP was classy-er.  Yes, I wasn't sad for the old SP when the UPRR started building up the WP and running the hell out of trains...while the SP just started to die on the central corridor.  Surprise:  UP really was the MP in drag after the so-called merger.  Yeah, I really hated the MP style UP now and my unrequited admiration of the UP was now vanishing like a lover that realizes other the person was a liar.  Cut to when I hired out with Amtrak:  Now it was ‘oh so clear’ the difference between the SP an ATSF employee.  SP guy spent all of their effort “trying not to get fired” while the ATSF just “get over the road” attitude and I wasn’t neither so I was accepted by both.  I felt SP guys were “paranoid” and the ATSF guys were “shoot and scoot”.
Now I’m a manager for Amtrak dealing with the SP/DRGW post-merger prior to 1996 and I can see the writing on the wall especially after speaking to former CNW guys about how they were treated by the UP (read MP) style management during that take over.  I watched the emasculation of the SP by the UP just as I had in 1984 with the takeover of my railroad.  Yeah, it hurt even though I once thought the enemy was the SP and I had compassion for the SP…once a very proud railroad like the WP.  As a WP guy, I indentify with the SP guy.
 



Edited 1 time(s). Last edit at 02/05/16 17:29 by XWPgandy.

Don't feel so bad. The UP died with the MP merger.

grahamline Wrote:
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> Don't feel so bad. The UP died with the MP merger.

graham,

I supposed quote from somebody from St Louis, ' The UP suceeds in spite of itself'. SO who was arogant?

J.

Mike,

The only thing is... was Harriman right but 90 years too soon?

J.

SP Management channeling money that should have gone into track maintenance and new equipment and, instead, was spent on non-rail ventures like satellites for SPRINT probably didn't help matters.  

Declining automobile, lumber and produce traffic, plus a dearth of coal reserves located along the route structure probably made a big difference as well. 

As a celebrated enterprise with a rich history and as a spectacular railfan subject, the SP will never die.

While managements and railfans tend to focus on cost issues and crisis events, the reality is that railroads live and die on their revenue streams.

As MDO and I discussed over lunch yesterday, the heyday of the SP was in the 1950s and 1960s, with tremendous revenue streams from PNW forest products, from auto parts and set-up autos, and from TX/LA petrochemicals that made the company very profitable. Roughly speaking, even though SP had much more freight traffic than that, by the late 1960s SP basically broke even on the rest of its freight traffic.

But then the SP's most profitable revenue streams tapered off:

- PNW forest products: government timber sales in OR and WA were seriously curtailed, and British Columbia and southeast USA lumber and plywood for the US market became plentiful and cheaper than the PNW stuff
- Auto parts and set-up autos: Japanese autos took away market share from the American car manufacturers. One by one, the California auto assembly plants closed up.
- The petrochemicals kept going, but most of the production did not go to the West Coast

and then the SP was in trouble. As John Kenefick put it when the UP declined to acquire portions or all of the SP in the late 1970s, "The bloom is off the rose."

But it takes a very long time to bring a railroad down. Decline is very gradual. So it does not show up for a while. It starts to show in crises like the 75-76 recession or the 81-82 recession. And fingers get pointed at events during those difficult times. But they are not the root causes.

Best regards,

Rob L.

OK  I vote for Rob L;s version.

mdo



Edited 1 time(s). Last edit at 02/05/16 19:40 by mdo.

mdo Wrote:
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> OK  I vote for Rob L;s version.
>
> mdo
He paid  for your lunch yesterday!  :-).   
C
PS--his reasons sound very plausible to me.

Carol Voss
Bakersfield, CA

As a stockholder it was clear in 1978...the railroad was no longer "front and center" of the SP universe per the stockholders annual report.


Allen



Edited 1 time(s). Last edit at 02/09/16 21:09 by bradleymckay.

bradleymckay Wrote:
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> As a stockholder it was clear in 1978...the
> railroad was no longer "front and center" of the
> SP universe per the stockhoders annual report.

And for good reason. It simply was no longer possible to make the kind of money it had in the past. The only way to get a good return was in other businesses.

MDO observed that, ironically, while Biaginni pushed harder for deregulation of the rail industry than any other western RR CEO, SP was woefully unprepared to take advantage of it when it finally came in the 1980s.

Best regards,

Rob L.

I've always figured the only difference is the color of the engines. No matter which railroad prevailed market forces would have dictated the same result.
From the limited viewpoint of a Californian, we witnessed most of the traffic base disappear. Sugar Beets, building materials - as in sand, aggregate etc, industrial loadings from heavy and light ndustry, perishable foods, cannery products and its related raw materials, shipments of paper products,,consumer goods, appliances and so forth. So, blame it on NAFTA, bigger more powerful and efficient trucks?

Sphogger



Edited 1 time(s). Last edit at 02/06/16 07:27 by sphogger.

sphogger Wrote:
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> I've always figured the only difference is the
> color of the engines. No matter which railroad
> prevailed market forces would have dictated the
> same result.
> From the limited viewpoint of a Californian, we
> witnessed most of the traffic base disappear.
> Sugar Beets, building materials - as in sand,
> aggregate etc, industrial loadings from heavy and
> light ndustry, perishable foods, cannery products
> and its related raw materials, shipments of paper
> products,,consumer goods, appliances and so forth.
> So, blame it on NAFTA, bigger more powerful and
> efficient trucks?

No. To assign blame, let's take the traffic types one by one:

Sugar beets - once USA's protective tariffs on imported sugar went away, so did the beet-based US sugar industry. And the farmers found better crops than sugar beets to rotate their cash crops with.

Building materials - California got built out. Housing starts fell.

Light and heavy industry - Got outsourced to China and to a much lesser extent, Mexico. Outsourcing was made possible by the growth of containerized shipping (which made shipping a lot cheaper) and normalization of relations with China (which made doing business with factories there practical).

Perishables - Lost to trucks because of regulation until 1979 keeping rates too inflexible, PFE break-up (making year-round equipment utilization impossible), UP-WP merger, and tacit decision by railroads after deregulation not to provide the service necessary for much of that traffic. The largest transcontinental traffic flow for which the railroads have only a minor share but once had a dominant share.

Cannery products - Still move by rail but mostly transitioned to intermodal. If we add wine to this category, the RRs haul a lot more out of California than they did back in SP's heyday.

Consumer goods and appliances - started coming to California from China rather than from east of the Mississippi, so no RR traffic for stuff like that consumed in California. But the railroads got the container loads of that kind of stuff going from China to the midwest and east to partially offset the loss.

Best regards,

Rob L.


 

May I trespass on this site??  I like mdo's original post.  While I was never around the SP for most of
my life, and always preferred the Santa Fe, as long as someone remembers it, the SP will never die.  
We can argue at length over the reasons for its demise, but the memories are forever.  

Nick Tharalson,
Marion, IA