Eastern Railroad Discussion > Former NS GP38-2 on CSX

FURX #5505, former NS GP38-2 #5505, built 10/1971 as N&W GP38AC #4116 works the Brunswick, GA yard job today. First photo shows it crossing the NS diamond on its way to the Brunswick Port.

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I still don't get it. Please, someone who understands this, please inform the rest of us. Why did Norfolk Southern get rid of these locomotives that were painted and numbered and in good working order only to turn around and buy all kinds of used locomotives from various other railroads or used locomotive dealers, etc. then send them through the shops and then spray paint numbers and initials on them. This makes no sense at all. Even if these engines needed repairs why get rid of them and now FURX is leasing them to CSX? What gives? This modern railroad world is strange to me. I guess I'm just getting too old to understand today's railroad management.

John a/k/a ClubCar in White Marsh, Maryland

All I know is those GP38's are better than the power we have!

CSX retired all of their 5500's that used to do this work, only to replace them with leased 5500's.

Here's my understanding: as part of the 5500s' rebuilding, NS sold them to First Union and leased them back. When the initial lease came up for renewal, First Union's new rate proposal was more than NS was willing to pay, so it passed.

We've had quite a few of them around Toledo, Fostoria, and Garrett on local jobs. They look awful.



Edited 1 time(s). Last edit at 03/03/15 18:07 by toledopatch.

I see those ex NS geeps used on local freights quite a bit between Huntington, WV and Russell, KY. Here's one I got back in December heading back to Huntington with a unique engine consist.

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nicely powered local ...

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The nose patch painter for unit 5503 was definitely better than the one that did 5505.

Jay

toledopatch Wrote:
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> Here's my understanding: as part of the 5500s'
> rebuilding, NS sold them to First Union and leased
> them back. When the initial lease came up for
> renewal, First Union's new rate proposal was more
> than NS was willing to pay, so it passed.
>

BINGO. Sale lease back is very common in the rail industry. Railroads would rather use the capital on other projects and pay a lease expense for use of their asset than have the capital tied up on that asset and take depreciation on it. Every so often a sale lease back will bite the railroad in the butt and they loose the asset at the end of the lease, either because they decided to play hard ball on the renewal or because the leasing company knew they would get a better price on the open market than the could get by re-upping the lease. You see this a lot on railcars - these FURX 38s are just the most visible example on locomotives. Story I heard on these FURX units is that CSXT offered a premium for these units in a short term lease that NS was not willing to match and First Union decided the short term gain and residual value after lease to CSXT was greater than the value of a continued long term lease to NS as the rate NS was willing to pay.

RFandPFan Wrote:
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> Out_Of_Service Wrote:
> --------------------------------------------------
> -----
> > nicely powered local ...
> >
> > Posted from Android
>
>
> Not local, this is the yard job at Brunswick.

I think he may be referring to my video.....

5568 and 5580 made a trip up the Winston Salem Southbound Rwy on 03/01/15 seen here south of High Rock NC.

Michael

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ClubCar Wrote:
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> I still don't get it. Please, someone who
> understands this, please inform the rest of us.
> Why did Norfolk Southern get rid of these
> locomotives that were painted and numbered and in
> good working order only to turn around and buy all
> kinds of used locomotives from various other
> railroads or used locomotive dealers, etc. then
> send them through the shops and then spray paint
> numbers and initials on them. This makes no sense
> at all. Even if these engines needed repairs why
> get rid of them and now FURX is leasing them to
> CSX? What gives? This modern railroad world is
> strange to me. I guess I'm just getting too old
> to understand today's railroad management.
>
> John a/k/a ClubCar in White Marsh, Maryland

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