MILW/Rock - proposed bankruptcy consolidation?

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MILW/Rock - proposed bankruptcy consolidation?

Postby mtuandrew » Sun Sep 04, 2016 12:02 pm

This thread in Conrail makes me wonder - were there ever serious proposals to create a western version of Conrail from the Milwaukee and the Rock Island? It wasn't the same kind of situation, the western US retained essentially all its necessary rail service without these two, but I could see some people being interested in a forced consolidation. (And many railroads against such a consolidation.)
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Re: MILW/Rock - proposed bankruptcy consolidation?

Postby ExCon90 » Tue Sep 06, 2016 4:18 pm

My own feeling is that the only thing that led to the formation of Conrail was that there were no railroads in the whole region that were not in some kind of trouble. John Fishwick of the N&W had proclaimed that a "firewall" from Buffalo to Pittsburgh was needed to keep the Eastern railroad disease from spreading. Phillipsburg, NJ enjoyed the distinction of being served by six railroads (CNJ, EL, LV, L&HR, PC--what was the sixth?), all of them bankrupt. As you point out, there were few significant places served by the CRI&P and MILW that were not also served by at least one other railroad, and it seems that the scope of the problem was not yet generally realized.
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Re: MILW/Rock - proposed bankruptcy consolidation?

Postby mtuandrew » Tue Sep 06, 2016 6:24 pm

ExCon90 wrote:six railroads (CNJ, EL, LV, L&HR, PC--what was the sixth?)

RDG - had to think about that a bit myself.

In hypothetical world, a MILW/CRIP forced merger ca 1980 would have been a formidable competitor to BN + Frisco, even with the poor track conditions and relative "pea vine" Pacific Coast Extension and Golden State Route. Lots of track to shed where they overlapped, lots of major markets accessed, lots of potential on-line traffic once it got its act together, and lots of potential overhead traffic passing from SP and UP to CSX, NS, and Conrail. That's probably why it didn't happen - most major midwestern and western lines would have suffered at Federal hands.

Sure fun to think about a merger of equals ca 1970 though!
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Re: MILW/Rock - proposed bankruptcy consolidation?

Postby vermontanan » Wed Sep 07, 2016 8:01 pm

mtuandrew wrote:In hypothetical world, a MILW/CRIP forced merger ca 1980 would have been a formidable competitor to BN + Frisco, even with the poor track conditions and relative "pea vine" Pacific Coast Extension and Golden State Route.


Hardly.
CRI&P+MILW would have basically equaled the CRI&P routes and the MILW between Chicago the Twin Cities and maybe some in South Dakota.

Just because the low point in the histories of these two railroad occurred at the same time, people like to erroneously lump them together like they were similar. So not the case. The Rock Island had lots of routes not worth keeping, that's for sure (track in Louisiana and Arkansas, and St. Louis to Kansas City as examples), but it had some really great routes that survive to this day, such as Dallas/Fort Worth to Minneapolis/St. Paul, Chicago to Omaha, and Kansas City to Santa Rosa, NM. Much of this trackage is now UP. For whatever was wrong with the Rock Island, it is proof that strong routes survive - no matter what. If a route is worth saving, it will be saved.

The Milwaukee Road is the same in that strong routes survive, so most if its didn't. Of course the main difference is that with most of its routes were considered to possess insufficient value to save, so they weren't. Were the CRI&P and MILW to merge, it is true it would have a better route from the Twin Cities or Chicago to Texas than the BN had, but that's about it, and that would entirely Rock Island trackage. The Milwaukee's Pacific Extension, the highest-cost route to the Pacific Northwest, would have remained the high cost route with an inadequate branch line network and limited access to Canada even with the Rock Island as part of the system. BN would still have the superior route from the Pacific Northwest to the Midwest, and the MILW-CRI&P routing from, say, Portland to Dallas would be an exercise in circuity. Basically when you look at the shortcomings of such a system against the BN, just about all of them are associated with the Milwaukee Road.

The Rock Island and Milwaukee Road perhaps had similarities with regard to the why of bankruptcy in the 1970s, but the value of their route structure was not similar.
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Re: MILW/Rock - proposed bankruptcy consolidation?

Postby CPF363 » Fri Sep 09, 2016 1:18 pm

A CRI&P-MILW merger might have worked if a with money was also involved. If CP (Soo Line) purchased the Milwaukee Road ten years or so earlier in the mid 1970s, integrated it into their Soo Line Railroad, then looked to merge with the CRI&P in and around 1980, that might have produced a competitive CRI&P-MILW-SOO-CP system. They could have also looked into bringing the Illinois Central into the fold later that would have put that much more traffic on a consolidated Chicago-Omaha line and the Louisiana and Arkansas traffic could have used the direct IC main line to Chicago. The new merged system could have maximized all of the systems for the long haul, e.g. Gulf-based traffic west to Vancouver competing with BN. CP might have also have been more inclined to work a deal to acquire Conrail's Michigan line forming a continuous line from east to west via Chicago along with a connection to the merged network to the Gulf.
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Re: MILW/Rock - proposed bankruptcy consolidation?

Postby Engineer Spike » Fri Sep 09, 2016 8:07 pm

What should have happened did happen. There were enough strong carriers in the region. SOO/CP, BN, and Northwestern. SOO and Northwestern covered Wisconsin fairly thoroughly, and all covered Twins-Chicago. God knows there are enough Chicago-Omaha carriers, and Chicago-KC, and Chicago-StL. Rock was often called the poor man's Burlington, since they went most of the same places, yet on a poorer route. Only in the south central states was Burlington inferior to Rock Island. Much of that was made up for in the Frisco merger.

Most viable parts of both Milwaukee and Rock were taken over. The Pacific Extension was a looser. Other carriers have routes to the PNW, beside BN, like UP, and SOO/CP. Montana's BN dependence has even been lessened by MRL.
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Re: MILW/Rock - proposed bankruptcy consolidation?

Postby John_Perkowski » Mon Sep 26, 2016 2:49 pm

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Re: MILW/Rock - proposed bankruptcy consolidation?

Postby Engineer Spike » Mon Oct 10, 2016 4:02 pm

I think that Gilbert will agree that the free market forces worked perfectly in this case, any sentimentality for Milwaukee aside. Like I mentioned, the strong carriers took over the best parts of Milwaukee, and Rock Island. In most cases one or more of the others served most all of the locations, not leaving customers high and dry.

Who would have bankrolled the resurrection of these two bankrupt roads? The government had its hands full with Conrail. The Nixon, Ford, and Reagan administrations were kicking and screaming as it was. The east had no alternative, since D&H was the only solvent road.
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Re: MILW/Rock - proposed bankruptcy consolidation?

Postby CPF363 » Sun Oct 16, 2016 8:22 pm

vermontanan wrote:Were the CRI&P and MILW to merge, it is true it would have a better route from the Twin Cities or Chicago to Texas than the BN had, but that's about it, and that would entirely Rock Island trackage.

Ben Heineman wanted to create a Midwestern north-south rail system with his attempt to merge C&NW with the Rock Island in the late 1960s.
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Re: MILW/Rock - proposed bankruptcy consolidation?

Postby Engineer Spike » Fri Sep 01, 2017 9:14 pm

Ben was just trying to find someone to pawn off Nortwestern's rail operations off on. I don't think that he gave a damn about the health of the rail industry.
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