Newbie Conrail Questions

Hi all,

I've been involved with railroading for quite some time now, but always just ignored Conrail. (or stuck my head in the sand).

Completely ignored, I essentially woke up one day, and they were gone.

Can someone simply explain why they sold to NS/CSX? Why both?
How much were they sold for?

I thought they were making progress in becoming an independent profitable company? Didn't they want to stay independent after being under the Governments wing for so long?

When did they go public? What was the value of the stock in the end?

And what is this CSAO thing all about? Shared? why? Is there any good maps that detail where CSAO is?

The merger happend many years ago, so shy do I see so many Conrail engines? or is that a CSAO thing?

Thanks!

Tom_E_Reynolds wrote:And what is this CSAO thing all about? Shared? why? Is there any good maps that detail where CSAO is?

The merger happend many years ago, so shy do I see so many Conrail engines? or is that a CSAO thing?

As I've heard it explained, CSAO operates only in a couple of areas where being owned by either CSX or NS would put them at a huge advantage by basically cutting the competitor out of an important area.

As for the Conrail units, (nearly?) all the ones I've seen are actually owned by either CSX or NS, but remain in Conrail paint, with the exception of the numbers. Probably this is because it's easier & cheaper to leave them in CR paint until the paint fades or the unit goes into the shop for something and gets painted.

Welcome aboard, Tom! I hope you enjoy this forum. I learn something new everytime I visit.
Soooo, why was CR split? The answer is very simple: anti-trust legislation that prevents monopolies. CSX already had tracks in key markets like Detroit and Pittsburgh, while NS's former Nickel Plate line roughly parallels the Water level Route between Cleveland Buffalo. Splitting CR allowed each RR access to the New York/New England market.

CR had wanted to stay independent but the round of mergers/acquisitions that created BNSF and a greatly expanded UP really scared CR's management in the mid '90s. CEO David LeVan was worried that a transcontinental merger (UP-CSX, NS-BNSF or CN-BNSF) could bypass CR, and render it useless.

CSX made an offer to purchase CR in October, 1996. NS followed with a counter-offer shortly after that. The stock, which had been $55 a share when I bought two shares in the summer of '96, rose to $110 per share by early 1997. Not bad for a stock that had been issued at $28 per share in a decade earlier.

I hope this answers your questions, Tom. Feel free to ask more.

There's an excellent history of Conrail available from MBI...

http://www.amazon.com/exec/obidos/tg/de ... ce&s=books

-otto-

""CSAO operates only in a couple of areas where being owned by either CSX or NS would put them at a huge advantage by basically cutting the competitor out of an important area. ""

I now understand that North Jersey, South Jersey and Detroit are covered by CSAO. But was it really that these areas were "important", or was it a burden that neither company wanted?

The reason I am so harsh is that this was "bankruptcy corner" just 30 years ago, so I wonder if it was really a scheme to just re-create a smaller company (CSAO) to service the un-profitable areas, take the losses every year, while NS and CSX kept the mainlines and profitable ones?

Does anyone have a map that shows the CSX and NS areas? Someone just told me that they seem to map to the old PRR and NYC routes? Is this true?

""worried that a transcontinental merger (UP-CSX, NS-BNSF or CN-BNSF) could bypass CR, and render it useless. ""

How could they have been bypassed into the North East?

My understanding of CSAO,is that it is in answer to a condition the federal regulators wanted before they would give approval of the merger.That no large market that had two competing railroads before the split and merger,would be without a competive envirorment after.CSX and NS jointly control CSAO,so they want it to be profitable,just not so efficent that one or the other parents will not be able to justify swallowing it later.I believe the reason for the PRR,NYC property split was another regulator stipulation.Until recently regulators had the power to undue either corporations deal if it was deemed to impact service or competion in any market .Then hopefully,an Neo-Conrail or some other corporation would be able to opperate some symbalence of a railroad with either the PRR or NYC side.Good thing that never happend.The function of a board of directors is to create shareholder value,railroading was just one means to that end,Conrail succeded.

Tom_E_Reynolds wrote:""worried that a transcontinental merger (UP-CSX, NS-BNSF or CN-BNSF) could bypass CR, and render it useless. ""

How could they have been bypassed into the North East?

NS and CSX had access to deepwater ports in VA and Philly that could have bypassed CR and allowed a merged transcontinental RR to receive goods in the East and ship them cross country in single line service. CN-BNSF woiuld have been harder because of the seasonal weather problems in the Canadian maritimes, but CN is operating there now so that might have worked, too. Unfortunately, New York City/northern NJ is the best port on the East Coast, but it is far from the only good choice.

One of the reasons Conrail wound up being the subject of a bidding war between CSX and NS was that it had been TOO sucessful. I never really liked Conrail that much as I saw them as the destroyers of the predecessor lines and all those Cornell Red Lehigh Valley units and colorful Reading GP 30's and EL E units ( ok we can forget the PC black) but I must say that I grew respectful of, if not fond of, Conrail dress blues. The people who brought Conrail from streaks of rust to profitability deserved better than what they got, the cannibalization of their railroad by two predatory behemoths. I still see some the blue units here in South Jersey and I go out of my way to photograph them, not because of any inherent beauty but out of respect for what hard work could accomplish. Vivat Coraill in aeternum.

Ok. I accept the fact that a transcontinental railroad could have by passed CR by useing a port in Philly. (I actually live 40 miles west of Philly). Thanks for the explaination.

That said, what did they get out of it by selling?

CR had wanted to stay independent but the round of mergers/acquisitions that created BNSF and a greatly expanded UP really scared CR's management in the mid '90s. CEO David LeVan was worried that a transcontinental merger (UP-CSX, NS-BNSF or CN-BNSF) could bypass CR, and render it useless.

So did CR Management move to the new NS or CSX then? Were they saved?

Are there any good maps that show what exactly what parts of CR went to NS and what went to CSX? (and CSAO)

Tom_E_Reynolds wrote:Are there any good maps that show what exactly what parts of CR went to NS and what went to CSX? (and CSAO)

http://www.deskmap.com/images/rr_merger.gif

Heres a map showing what lines went to what road. Red is CSX, green is NS. I have a nice poster-size map that I bought last year showing it in better detail, I'll see if I can find where I got it.

What a great map! Exactly what I wanted to see...now if I just zoom in a little closer....

Tom_E_Reynolds wrote:That said, what did they get out of it by selling?

Profit. The shares went from about $55 in the summer of '96 to $110 each in early '97.

Tom_E_Reynolds wrote:So did CR Management move to the new NS or CSX then? Were they saved?

Many went to CSX, some went to NS and a few received those legendary "golden parachutes" that only upper management gets- severance packages in 6 or 7 figure range. NS has made really good use of their former CR execs- it has helped them adapt from a primarily coal-hauler into a diversified intermodal railroad.

FWIW, even though I missed the distinctive colors of EL and LV, CR's dress blues looked very spiffy on their engines. The scheme has aged quite well.

P.S. nice map, LCJ!

http://broadway.pennsyrr.com/Rail/Conrail/ has the official maps prepared by Conrail for the split. The main map is a bit small but the blowups are high quality. A few of the colors seem wrong though - for instance, why is the Trenton Cutoff (Morrisville Line) shown as going to CSX east of Norristown? http://pacerfarm.org/cgi-bin/sta01.cgi?div=MOR shows it as all-NS. Also CSX is shown getting the full Chicago Line.

SPUI, great links!

What ever happened to your abandoned NJ railroad PDF? Is it available for download?

Tom_E_Reynolds wrote:SPUI, great links!

What ever happened to your abandoned NJ railroad PDF? Is it available for download?

http://commons.wikimedia.org/wiki/New_J ... ilroad_map has a slightly modified version. Their image server seems a bit slow right now.