Western Railroad Discussion > CN acquires WC!!!

See the whole story at
http://www.cn.ca/cnwebsite/cnwebsite.nsf/public/en_News20010130

I wonder if the STB will treat this one as a minor transaction (is WC a major RR?).

JF

well...I tried to follow the links to listen to the conference call without success. has anyone else had any luck?

Ok the Canadians have two US railroads now- who do you suppose is next? Watch out UP!

Jason

I personally hope BNSF aquires KCS before the borge absorbs them up out of the middle of nowhere....UP can have Guilford if all I care...hehehehehehehehe, J/K...
Drew

The Canadians have a lot more than "two" U.S. railroads -- don't forget the previous absorptions of GTW into CN and Soo Line/MILW and D&H into CP.

What I find ironic in this proposal is that most of WC's trackage is original Soo Line (or subsidiaries), so in a boiled-down sense the trackage CP didn't want is now highly sought-after by CP's primary competitor.

If this occurs they will standarize the fleet and the WC sd-45 and f-45's and the F-7/9's will probally be gone also

I do find myself wondering how much of the WC's peripheral operations will last very long under the CN umbrella. The Algoma Central and the Upper Peninsula operations, for example, look like surefire spinoff candidates. And I wouldn't count the F-units out just because the Algoma passenger operation seems to be pretty successful.

Ok so how many people saw this one coming?

So I guess we can expect CN-painted engines with small "WC" on the cabs...

Wonder if CN would keep the SDL39's.

rustedflange wrote:
>
> Ok so how many people saw this one coming?



Everyone.

BobE

Stockholders got hosed on this one, works out to a little more than 1/3 the price of WCLX at its recent peak ($44 in 1997). I'm betting Surf Board will see this as a minor deal and approve.

CN is a smart outfit, I wouldn't be surprised to see some savvy PR comments to reassure the public and the regulators real fast, like:

Guaranteeing the Circus Train operation
Guaranteeing the Algoma Agawa Canyon train
Maybe a new Upper Peninsula tourist train or Fall Foliage train
Maybe promise a few engines to Green Bay Train museum and offer some rights to operate
Maybe a shippers' board of advisors, with a lot of pulp and timber and paper mill representation.

This also has a lot of benefit as a bypass on the west side of Chicago for trains from the canadian west to the US midwest and gulf states. WiscCentral avoids some of the bigger barriers there

I wouldn't be so certain that CN would have a fire sale so quickly wish WC's rolling assets. They have to run the railroad with something, and after doleing out the cash for the rails, I doubt they are going to have excess cash around to go and buy 150 more C44s. As far as rail assets go, it's obivous that CN wants the Twin Ports to Chicago connection, but WC's upper peninsula - Algoma Central route may be just as viable. In case this winter hasn't proven it yet, things can get pretty screwed up east of and around Chicago. I think it would be of great benefit to CN to have another Chicago - Eastern Provinces link. The mere fact that CP detoured Chicago to Toronto traffic via Winnipeg this winter says how important this could be. It's hard to say what this could mean. WC earned its stripes by being a customer-oriented carrier. Soo Line declared WC's mainline a traffic wasteland, but WC turned it into a profitable operation. CN is like any Class I, they want the long haul traffic and local traffic comes a distant second. I think the STB needs to take a long hard look at that fact before granting approval.

Kyle

Hello,
I would suspect that the E&LS will take over a lot of the WC operations in Michigan's UP (Ishpeming-Baraga, Trout Lake-Munising, and Pembine-Powers-Iron Mt).
Any thoughts?
Mark

Will CP likely extract any conditions from CN in exchange for their blessing (eg, 100% control of the Detroit River Tunnel or more trackage rights)?

First off, I wouldn't count the SD-45's down just yet. With many of them recently rebuilt. I don't think it would make THAT much sense for CN to drop a wad of cash replacing those 100 or so units. Aren't many of them up to -3 standards? As for the second question, yes. I do forsee the E&LS taking over alot of the northern Wisconsin / Upper Michigan operations. I also forsee the WSOR gaining something out of this deal. I.E. operating lines in the Oshkosh area and possibly the ex- GBW. Remember, WSOR does have a line up to Oshkosh. Albeit severed at hwy 41.

I wouldn't mind seeing a much bigger E&LS but I doubt that would ever come to pass. The only reason E&LS can keep the lights on now is because the state of Michigan has allowed them an additional five year grace period on the track rehabilitation loan E&LS recieved. The state does not want the E&LS to fail and trigger the Ontonagon mill to close. What may be feasible would be for E&LS to aquire the segement from Nestoria to Baraga (Sidnaw to Nestoria was purchased 1991) and run pulpwood from Baraga to paper mills in the Iron Mountain, MI area.

Hello,
while I'd enjoy seeing a bigger E&LS (my favorite RR) I'd hate to see it grow at the expense of the WC. I'd also think that the state of Michigan might step in and buy the tracks and turn around and lease them to the E&LS. I can't see any company buying the Baraga branch, White Pine branch, or the Munising branch as they are all long with one or two customers and pulp loads. They also don't have much in the way of expandable growth,
Mark

I don't think CN will be in a big hurry to repaint the WC locomotives considering what the past and current status is of IC and GTW locomotives. I could see some sort of WC renumbering in cases of number conflicts with CN or IC locomotives. And you can be assured that some of the WC's locomotives will be purged, such as some of the older non-rebuilt ones and high maintanence ones. And as for the Fond Du Lac shops, I have a feeling they could be downgraded on some ways. The GTW's Batle Creek shops were closed and all of the locomotives there were reassigned to the IC's suburban Chicago shops for maintanence. CN seems to do all of their rebuilding and overhauls at either AMF in Montreal or Transcona in Winnipeg. I just hope that CN doesn't sell off alot of the WC's branchlines. I know that WC's union represented employees might get a better deal under CN. The WC's paint scheme will be missed in the future though. Now is the time to get out and start taking pictures of pure WC trains.

See my comments on the International Discussion Board.

Mike McInerney

Guys, you're going all crazy about this seeing it's a done deal. You should remember what the STB is still in that 15 month hiatus on rail mergers. Besides, except for the BNSF merger between Burlington Northern and Santa Fe, all the other takeovers have proven that bigger ain't better! I'd rather be back in the 80s-90s as a kid-highschool and early 20s when the Super 7 knew how to run things compared to now. Especially UP.