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Eastern Railroad Discussion > Rumor Time
Date: 04/12/05 06:44
In the past few weeks we have been hearing that the Richmond, AACA Yard, parts of the North End would be turned over to Baltimore managment. While waiting 6 hours for the yard master to find engines for my train I asked the train master what the scoop was. He said that he's hearing "take over" of all of the northern region of CSX plus south of Richmond to Collier Yd and Hopewell. There also a letter floating around the office that seems interesting, it's off a business web site but I can't tell which one the copy I have isn't very good. I'm having to type the contents due to the copy being so bad. Lets see if this one comes true !
CSX Control move may suggest takeover~~AG Edwards
CSX Corp's agreements to provide for minimum three year terms of employment for some of its executives after a change of control could suggest a possible takeover, said AG Edwards Donald Broughton on Friday.
In a filing with regulators on Thursday, CSX said it entered into change of control agreements with seven of its executives, including Chief Executive President and Chairman Michael Ward and Chief Financial Officer Oscar Munoz.
In the new agreement, the difinition of "change of control" was altared to completion of such a move from shareholder approval of a deal. It also eliminated the opportunity to defer certain lump sum serverance payments.
In a research note, Broughton said Friday of the filing" "We are at a loss to come up with a reson for this change other then the anticipation of a potantial takeover."
A CSX spokeswoman was not immediately available for comment.
He noted that recent railroad metrics indicate the company's operating performace is not improving. Terminal dwell times, or how long trains are in a station, rose sharply over the holiday to 52 hours during the week ended Dec 31 from 35 hours. Broughton said.
"Despite lousy operating performance, the stock might see temporary upside associated with takeover speculation," he said.
CSX recently implemented a new operating plan aimed at boosting its performance, decrease middle management and rounded out it's new management teams. But it has struggled with some disruptions as the railroads finished a record year in terms of volume in 2004, driven by a rebounding U.S. economy and surge in global trade.
Date: 04/12/05 07:20
Re: Rumor Time
I would imagine that if the CSX corporate people - from the 1980s through right now - had done what was suggested all along: LISTEN TO THE FIELD EMPLOYEES ON HOW TO MAKE THE COMPANY RUN LIKE IT SHOULD BE RUN - that none of this would have ever been necessary to begin with. It's been discussed over and over again, at many levels of railroad management, field operations, unions, stock speculators, regulators, the FRA (yes, I've been privy to some of those, and BOY were they eye-opening...), the railfan press, and more. No need to rehash it again - but then, maybe we all should speak up? Whatever happens to giant railroad corporations like CSX will certainly affect everyone across America, if it's anything like what happened to the likes of Penn Central, UP/SP [merger], and so forth and so forth and so forth.
(This is beginning to sound a lot like what was occuring, overall, in the railroad industry exactly a century ago - [shades of the early 20th Century Robber Barons...] and it's a shame we still haven't learned from all of those mistakes way back then.)
Those who have had the years and years of EXPERIENCE running railroads know EXACTLY what needs to be done - I know: I've been a sub-contractor employee to CSX and NS - and often with Amtrak, and members of BOTH sides of my family were career railroaders.
Why won't they just LISTEN to you guys?
Date: 04/12/05 07:25
Re: Rumor Time
The AG Edwards letter has been floating around for over 3 months.
If a takeover does happen on the Northern Lines look for the CN to move in and set up shop.
Date: 04/12/05 13:32
Re: Rumor Time
We are hearing the same rumour up here in Ontario.
Although,it was the whole outfit,I could see CSX getting parted out.
Date: 04/12/05 15:17
Re: Rumor Time
> If a takeover does happen on the Northern Lines
> look for the CN to move in and set up shop.
I keep wondering why the "Northern Lines" are the target. Hell, in terms of speed and maintenance, the Northern Lines are the 2005 Lexus, the "original CSX" territory is the 1977 Ford Pinto. Who in the hell wants to get rid of the Lexus in favor of the Pinto?
When SOO overpaid for the MILW, they at least had the common sense to sell the old SOO to the startup WC.
Yes, CSX was dumb to pay what it did, but unless a buyer can be found who is willing to overpay (be equally dumb), then CSX would take a huge finacial loss on the sale of these lines.
Date: 04/13/05 07:20
The rumor of CN taking over any part of CSX just ain't gonna happen.
The railroads are now roughly balanced. Two big ones in the West, two in the East. CN and KCS down the middle, with CSX and UP having a big presence there, too.
Combining CN with CSX would unbalance that equation and create a big duplicate route between Chicago and New Orleans, which is what the IC, now CN recently rid itself of. The IC not only ditched the GM&O, it pulled up a lot of its second main, so why bother with a new route? And combining CN with the northern part of CSX would force CSX to compete against its former routes.
How would NS react to the CN getting the CSX Northern Lines? How about the STB for that matter, who allowed the UP, NS and CSX to kibbosh the perfectly logical BNSF-CN merger proposal, because they weren't ready for the inevitable defensive mergers that would follow?
Don Phillips, I believe, wrote that it will eventually be BNSF+CN+KCS+NS vs. UP+CSX+CP. I'll stick with that prediction. Maybe that would revive the TP&W or the Kankakee Route as a bridge line to avoid Chicago. That would be pretty cool.
Date: 04/13/05 14:24
Re: Wishful Thinking
It sounds to me like the "old CSX" camp is getting pretty bummed out at their lack of success after the Conrail integration, when compared to NS, and are finding it somewhat therapuetic to circulate rumors which involve severing said "trouble" territory.