Illinois Central Gulf - Why Was It Done?

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Illinois Central Gulf - Why Was It Done?

Postby MILW261 » Mon Sep 10, 2012 9:21 pm

What was the reason given the merger of the Illinois Central and the Gulf, Mobile, and Ohio into the Illinois Central Gulf? Was it simply the elimination of a competitor (IC wipes out GM&O) or something more complex?
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Re: Illinois Central Gulf - Why Was It Done?

Postby v8interceptor » Fri Jan 04, 2013 12:31 pm

MILW261 wrote:What was the reason given the merger of the Illinois Central and the Gulf, Mobile, and Ohio into the Illinois Central Gulf? Was it simply the elimination of a competitor (IC wipes out GM&O) or something more complex?

I am no expert on railroad mergers but note that in the 1960's and 1970's there were a number of industry mergers of lines running parallel to each other and competing head-to-head. The prime example would be Penn Central (and look how well that worked out). It was difficult in the pre-Staggers act environment for the newly combined RR to efficiently dispose of underused or duplicated trackage so efficiencies of scale were offset by having a lot of low revenue mileage to operate and maintain.
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Re: Illinois Central Gulf - Why Was It Done?

Postby Allen Hazen » Sat Jun 01, 2013 10:50 pm

Re: "The prime example would be Penn Central (and look how well that worked out)."

Well, to be fair... you should also look at Seaboard Coast Line and Burlington Northern, which seem to have worked a bit better. Management of the IC and the GM&O would have been aware of L&N's takeover of the NC&StL and Southern's takeover of CofG: for IC to merge GM&O would have seemed like an obvious, thoroughly conventional, move.
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Re: Illinois Central Gulf - Why Was It Done?

Postby mtuandrew » Sun Jun 02, 2013 10:12 pm

Was the Southern ever a contender for purchasing the GM&O? They had an interest in the Mobile & Ohio way back, and would have benefited from direct New Orleans - St. Louis access.
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