Eastern Railroad Discussion > EMD success?

Sure, this is a potentially volatile topic, but I find myself pondering the performance of EMD following its purchase by Caterpillar (Progress Rail). To wit: What has changed? CSX and CP contimue to spurn new EMD products, the PR43 program seems destined to follow the same sad road that all Cat repowerings have followed for the last 30+ years, UP and BNSF still give the lion's share of orders to GE, and perhaps most alarming, longtime 100% EMD bastion FEC is basically trqansforming into a "GE road".

I had thought the Cat ownership would, if not turn the tables and return EMD to primacy, at least even the playing field a bit, but to me, very little has changed. The ECO program has been a very slow go (one would thing they would aggressively market against the likes of NRE, RJC/Railpower, etc) and the market share equation seems as lopsided as ever. Does anybody see things changing?



Edited 1 time(s). Last edit at 03/02/14 06:50 by SCL1517.

A few counter points:

CP has bought only from EMD in the recent past. The GP22's are basicly new locomotives. CP has bought into the Eco program quite heavily. Likewise, the Genset fad seems to be cooling without subsidization and as the carriers develop experience with these locomotives.

NS has bought at near parity in recent years after seeing over 1000 Dash-9's vs about 150 SD70's.

So far this year, UP has favored EMD 100 to 60. This could change as the year progresses.

At FEC, EMD has no C4 equivalent ready to sell. An SD70Ace would be more expensive.

Same can be said of BNSF to some extent as all GE' are C4's.

Cat is in this for the long haul and the transition will take time. The PR43 efforts are misdirected in my opinion, but it sounds like the SD70Ace is improving. They have invested to reduce their manufacturing cost which GM wasn't about to do.

What is more, GE has become an excellent supplier. It is harder to make inroads when the competition is good. In the 1980's EMD opened the door for GE with their own actions. GE was clearly not asleep under Jack Walsh.

The biggest risk for GE at this time is their dissatisfaction with their return on investment with respect to locomotives. FT Worth and the move of the division HQ to Chicago are designed to address these concerns.

Posted from Android



Edited 2 time(s). Last edit at 03/02/14 10:12 by NYSWSD70M.

EMD had a very strong field engineer program in the 1980s, as well. GM people in the railroad's shops, listening to the issues, reporting back to HQ, etc. From what I understand, that allowed them to tweak manufacturing, release product changes, suggest maintenance fixes, etc. Very much like Boeing, etc do with the airlines.

GE took that idea and ran with it. GE people are connected inside the railroad, and are aware of the railroad's issues, concerns, desires, etc. Done right it can give you enormous insight into the buyer's decision process.

GE's competitive financing deals have always helped sell and lease products.

emd's are junk now

GE's credit arm means they will always be number one IMO.

1 Wrote:
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> emd's are junk now


Just curious..... This statement is based on.........??????

NS appears to be happy with their SD70ACEs. What about other RRs???

ns1000 Wrote:
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> 1 Wrote:
> --------------------------------------------------
> -----
> > emd's are junk now
>
>
> Just curious..... This statement is based
> on.........??????
>
> NS appears to be happy with their SD70ACEs. What
> about other RRs???
BNSF re-fell in love with EMD after they put isolated cabs on the SD70ACe. In U.P. is very happy with EMD because for 1st time in many moons they ordered more EMD'S then GE'S. And don't forget that the SD70ACe/45 is selling like gangbusters in South American.

Sweet, someone is in love with X-carrier because they ordered x-amount of engines... Never mind the fact we only have two builders anymore that largely perform and cost the same...

Frontrunner Wrote:
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> BNSF re-fell in love with EMD after they put
> isolated cabs on the SD70ACe.

No, they really haven't, but you foamers can think whatever you would like.

NYSWSD70M Wrote:
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>
> The biggest risk for GE at this time is their
> dissatisfaction with their return on investment
> with respect to locomotives.

Indeed, and when GE makes 47% of their earnings from GE Capital, it's little wonder management is squeezing (or shedding) all the other divisions. And GE Capital does not manufacture a thing, just money!

From this article: http://www.nytimes.com/2013/05/08/business/media/ge-capital-puts-on-a-lending-roadshow.html?pagewanted=all&_r=0

"According to Mr. Winoker (who follows GE for Sanford C. Bernstein & Company), GE Capital generated 47 percent of total earnings for General Electric last year (2012), up from 28 percent in 2009; he also said commercial lending and leasing — a large part of which is to midsize businesses — was responsible for about a third of GE Capital’s profit last year."

GE 2012 annual report, the last page of the very spartan earnings statement.

http://www.ge.com/ar2012/#!report=2012-financials

daniel

GE's locomotive, turbines, aircraft engine etc businesses are closely integrated with the finance business. Aggressive interest rates make deals happen.

That said, aggressive development of LNG engines for locomotives seems to be part of GE's focus on energy right now.

I have to admit the CSX 3000 series GEs are Cadillacs. Still, the SD70ACe has guts. Just doesnt have the feel of a new gevo.

I think the RRs will always throw EMD orders to prevent monopoly practices by GE.

Posted from Android

Lackawanna484 Wrote:
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> GE's locomotive, turbines, aircraft engine etc
> businesses are closely integrated with the finance
> business. Aggressive interest rates make deals
> happen.
>
> That said, aggressive development of LNG engines
> for locomotives seems to be part of GE's focus on
> energy right now.


The Big 6 don't need these (GE Capital) services. All six are large enough to finance equipment on their own.

As an example, when NS can borrow money at prime, what advantage does GE Capital bring to deal? GE Capital does not subsidize the manufacturing side of GE and make the kind of money that they do. Besides, this was more of a factor when the Rock Island, MILW, etc where in business. This may help with sales like the FEC or Iowa Interstate but this is a small percentage of the business.

Still, EMD made GMAC whole on these deals, not the other way around.