EMD Sale Confirmed

The SD70ACe looks like a good start...

I predict that the railroads won't let EMD exit the locomotive business. They really won't want to be at the mercy of a single supplier. My 2 cents...

trainiac wrote:The SD70ACe looks like a good start...

I predict that the railroads won't let EMD exit the locomotive business. They really won't want to be at the mercy of a single supplier. My 2 cents...

Do you think they're going to buy a bunch of engines they don't need or don't want to keep that from happening?

Yeah, things don't work that way. How many people did you see run out and buy a car from American Motors to keep it from being bought up by Chrysler, just so there'd be 4 domestic auto makers instead of three?

If anything, the US government may step in and tell the new owners that they may have to keep locomotive production going to keep GE from having a monopoly on the market. But don't quote me on that.

<i>If anything, the US government may step in and tell the new owners that they may have to keep locomotive production going to keep GE from having a monopoly on the market. But don't quote me on that.</I>

Doubtful. There's lots of other companies who can make locomotives out there.

My guess, though it's not at all a certainty, is still that EMD's production days are numbered. There's just little economic reason to bother with it when renewal parts are already engineered and ready to make money. remember, the buyers want a return on investment, they're not a bunch of rich railfans. If EMD needs to invest a big sum of money for engineering of new locos, then they're not going to be building anymore.

trainiac wrote:
The SD70ACe looks like a good start...

I predict that the railroads won't let EMD exit the locomotive business. They really won't want to be at the mercy of a single supplier. My 2 cents...


Do you think they're going to buy a bunch of engines they don't need or don't want to keep that from happening?

OK, maybe I am clueless, so don't jump on me yet... But who says future EMDs won't be needed or wanted? It also just seems to me that having a SINGLE large supplier without competition would be a disadvantage to the railroads in terms of the price and quality of what will be offered. As far as I can see, competition with EMD was a major part of what brought GE's locomotives so far forward.

Doubtful. There's lots of other companies who can make locomotives out there.

Unless I'm mistaken, there haven't been any companies other than EMD and GE who have been able to get a strong foothold on the mainline freight locomotive market in recent years. Will another company be able to take EMD's place should they disappear?

(If I'm totally wrong with all of this, I'll back out and won't meddle any more with this.)

<i>OK, maybe I am clueless, so don't jump on me yet... But who says future EMDs won't be needed or wanted?</i>

I suppose if EMD was a cash cow for GM, they'd hang on, not sell them.

<i> It also just seems to me that having a SINGLE large supplier without competition would be a disadvantage to the railroads in terms of the price and quality of what will be offered.</i>

So what? Most US stuff, at least passenger, is so customized that it ends up being single supplier anyway.

<i> As far as I can see, competition with EMD was a major part of what brought GE's locomotives so far forward. </i>

Neither are exactly leaders in the industry technologywise. From what I've heard, a lot of what was keeping EMD alive was overseas orders, and the Europeans have been either progressing quickly with their own designs, or phasing out the applications where EMD's stuff was competitive.

<i> Unless I'm mistaken, there haven't been any companies other than EMD and GE who have been able to get a strong foothold on the mainline freight locomotive market in recent years.</i>

Alstom, Bombardier, SLM, Seimens, and a few others I can't think of right now. The first two already have a foothold in the US market.

<i> Will another company be able to take EMD's place should they disappear? </i>

Maybe. It's a function of the size of the order being large enough to recover the costs on a product that's unmarketable virtually anywhere else. If any foreign firm can make money on US freight locomotive manufacturing, they will enter. Otherwise, GE will be it and the industry will be faced with either adopting modified versions of European designs, or paying GE's premium for whatever GE feels like making.

It's sure a boost for GE. But the industry could always walk away from GE...

<i>
(If I'm totally wrong with all of this, I'll back out and won't meddle any more with this.)</i>

No no, keep asking questions. It's only by asking questions that you learn. :D

If only GE supplies locomotives and there is enough demand for something they don't provide, there is a good chance another builder will enter the locomotive market to provide their goods.

Thanks for your reply, Nasadowsk!

>>>If anything, the US government may step in and tell the new owners that they may have to keep locomotive production going to keep GE from having a monopoly on the market. But don't quote me on that. <<<

Antitrust laws don't work that way. The government has no power to force a company to maintain a part of its business. (exceptions are regulated industries, such as a public utility, but even in that case, only if the government also ensures that the company does not lose money; otherwise it would be an unconstitutional taking without just compensation.

Note that even if GE were to be left as the only remaining locomotive manufacturer, and thus a monopoly, that is not illegal. What would be illegal are certain not all, such as offerign a superior product) actions by a competitor (e.g. GE) to become a monopoly *or* if one becomes a monopoly legally (as in EMD goes out of locomotive business after the sale to build ship diesels only or somesuch), then using monopoly power to exact so-called "monopoly rents" is illegal. The price can't be raised to above a reasonable price that would prevail but for the monopoly.

It is interesting how completely Wabtec gets ignored as a locomotive builder in these discussions.

Why is that 'interesting'? Wabtec's a rebuilder/also ran. The MP-36s are overweight dinosaurs, what else has MK done?

And I'm not knocking the former MK, just railcar building was NOT a strong point of them.

Seems to me that WABTEC and its' predecessors' have more time in the diesel locomotive business than either FM or Baldwin. Actually, even Alcos' foray into mass production of diesels only lasted 25 years-while MK got into the loco business baack in 1971. Hmmm....

Nasawhoski, you make the kind of comments that belie all types of things- none of them being intellect or knowledge of the subject matter.

Nasadowsk wrote:
Neither are exactly leaders in the industry technologywise.

That doesn't seem like a particularly factual statement, at least not in the broad sense. Granted, EMD held onto the 2-stroke way too long, and GE took too long working the bugs out of their prime movers, but both HAVE advanced the technology. And I mean recently, not just decades ago. Especially in the area of electronic controls and AC traction at high horsepower.

I disagree with statement that EMD "hung onto the 710 too long". Why? The 710 is probably as reliable a locomotive prime mover ever designed and the railroads seem perfectly happy with it . UP is getting unequaled availibility rates and overhaul intervals out of a design you want to throw away. If I ran a railroad, I would keep buying 710's until they were outlawed by the EPA. Meanwhile, the H is still out there on the back burner and I suspect that by the time it is needed, all the bugs will be worked out like GE appearently has done with the GEVO. I do find it kind of hilarious that the "obsolete" 2 stroke is still rolling down the assembly line , while the "modern" FDL is dead. The ONLY reason to give up on the 710 would be if the horsepower races rekindles or the government's misgiuded regulations finally raise the bar to unreachable heights. It may be true that the 710 will never be able to clear the next EPA hurdle, but I wouldn't bet against it yet. It seems to have cleared the first two hurdles without even breaking a sweat. I'll take tried and true over new and unproven ANY day of the week!

I agree--I don't view the 710 as "outdated". It's actually more fuel-efficient than the FDL.