Will CSX become like Penn Central?

Folks,
I was reading on another board that CSX could become like Penn Central with the lack of Capital Spending etc. Do you think that will happen?

I am not saying at this time that it will but Penn Central could have been
a decent merger except that the PRR and its policies prevailed and they
did not believe in putting money back into the railroad.
The New York Central put money into maintenance and improvements and
over the long run, it can make a big difference.
The Penn Central downfall began with a takeover attitude but the
facilities were not ready for a takeover in 1969.
The problems started with various systems not being ready, cars all over
the places with no paperwork and nobody knew where they were going
and meantime receivers and agents (what few remained) did not have
any idea where there cars were either. Then the landscape began to be
dotted with derailed freight cars all over the place. It was kind of hard to
ride a long distance train anywhere on Penn Central and not encounter the
results of a freight derailment somewhere on your trip. Slow orders were
put into place all over the railroad and before long, it took way more time
to make a trip than it previously did. Of course these conditions made the
costs of operation to go up and up to a point where trains were being held
for power that was plodding along for long stretches at 10 MPH or was
stuck somewhere behind a train in trouble.
For the first couple of years, the Penn Central also had a horrible attitude
toward their employees and this did not help the situation one bit.
Their treatment of Amtrak and other passenger railroads are not helping
them either, they are getting on the wrong side of some right people.
I hope CSX is not headed this way but some indications do not look too
good.
I think the "jury is still out".
Noel Weaver

CSX would have to fall a long ways to be anywhere near what Penn Central was - I think most fans today have no idea just how bad the PC and early Conrail days were. And part of CSX's problems in upstate NY right now is two large-scale trackwork programs that are reducing its busy double-track route to single track.

FWIW, I think what would 'save' CSX from such a fate is that if its stock price fell far enough, that would give one of the bigger, more successful roads (UP or BNSF, or even CN or CP) an opportunity to buy the company cheap.

JD

RailBus63 wrote:CSX would have to fall a long ways to be anywhere near what Penn Central was - I think most fans today have no idea just how bad the PC and early Conrail days were. And part of CSX's problems in upstate NY right now is two large-scale trackwork programs that are reducing its busy double-track route to single track.

FWIW, I think what would 'save' CSX from such a fate is that if its stock price fell far enough, that would give one of the bigger, more successful roads (UP or BNSF, or even CN or CP) an opportunity to buy the company cheap.

JD

You might well be right, I don't know. I do know that this is how Penn
Central started the ride downhill and they went downhill fast once things
really got bad.
I was in the thick of it, we made a lot of money but we had some really
brutal trips, never had any idea that things could get so bad as they did.
Had the trracks been properly maintained all along, this massive job today
would not have been necessary.
Noel Weaver

Another factor in PC's downfall was the Enron style looting of the RR by the management for various pet non-railroad activities. If you read Daughen & Binzen's "wreck of the Penn Central" it is clear the management quickly lost interest in trying to operate the RR properly and saw it mostly as a way of getting their hands on prime real estate and a source of cash for their other operations e.g. Executive Jet, Penphil, etc.

AFAIK CSX is still primarily a transportation company and is not engaged in these kinds of activity (at least that we know of).

jonnhrr wrote:Another factor in PC's downfall was the Enron style looting of the RR by the management for various pet non-railroad activities.

PC did not divert funds from the railroads operations to pay for the diversified investments mentioned here. Investment funds came from the Pennsylvania Company, a subsidiary for holding and growing such investments -- a large nest egg that had been nurtured and grown for many years. Pennsylvania Company was the holder of the large amount of N&W stock that was sold off when PC was formed.

If they had used this money for funding the sinkhole of PC operations, the company would have fallen apart much sooner than it did.

Penn Central Company (the holding company that owned Penn Central's rail operations) did not actually go bankrupt, I believe. There are few real similarities between PC and Enron, other than the huge amount of publicity that both received.

Wreck of the Penn Central was sensationalization of the actual financial events that occurred, in my opinion.

Is the book still in print? I believe Mike Ward is trying to fix the RR unlike John Snow.

It's scary how many similarities I saw between now and Noel's first post

NO locomotives, no preventive track maintenance, etc. Not looking good.

By the way RailBus63, there has already been some rumblings about the CP looking to buy this area, but I don't think that would be good.

WebInfo wrote:Hate to break it to you guys since you get some glee out of the thought of a bankrupt CSX, but Businessweek recently called CSX "the most improved" company in the transportation sector and the leader in its section (railroads) for most improved finances and customer service.

CSX ain't going broke or bought out by anybody, so just get over it.

The press can print whatever the railroad feeds them and some do but the
facts still are that CSX's service is probably the worst of any of the major
railroads. Both transit time and yard dwell times are pretty bad.
I never said that they WOULD go bankrupt and I certainally would gain
NO satisfaction if they did. I only stated that the same things that started
with Penn Central and contributed to its downfall are creeping up here on
CSX.
I only stated basically that they need to change if they are to make it and
I have not seen too much to like lately.
I might be retired but I still have friends who work for CSX and are
depended upon them for a paycheck.
CSX is a big private employer in the capital region of New York State. Why would I want to see them go under?
Noel Weaver

Hi Mr. WebInfo......
How did you get an idea that people seem to have glee in the thought of CSX going under???

Charlie
CSX forum moderator

I just read yesterdaay on railnews.net that CSX has increased profits for the last 2 quarters, but their performance numbers are dropping. Their track speed is down, the time cars are in the yard is up. It was a lengthy report that did not have many good things to say about CSX, their customer satisfaction is actually dropping, not rising. Read the article and make your own conclusion about Plan One.

The CSX Conductor commented in part,

NO locomotives, no preventive track maintenance, etc. Not looking good.

I can't comment on the locomotives, other than the ongoing rainbow of lease and pool power, but up the post there's specific citation of major work underway in New York.

Also: I'm surprised no one has mentioned:

• The notorious "red team/green team" infighting between former PRR and NYC personnel that plagued Penn Central.
  
  The massive hemmorhage of money due to extensive passenger operations.
  
  The additional hemmorhage of money due to the shotgun wedding to the New Haven.
  
  The thousands of miles of little-used and often redundant trackage, including main lines, branches and yards. Maps of the PC look like spaghetti.

CSX has had none of these problems, so I can't see how there can be any comparison between it and PC.

oregontrunkline wrote:...CSX has had none of these problems, so I can't see how there can be any comparison between it and PC.

Correct -- but I believe the main comparison that has some validity is the insufficiency of capital investment in equipment and physical plant leading to operational deficiencies and problems with serving customers adequately.

oregontrunkline wrote:Also: I'm surprised no one has mentioned:

• The notorious "red team/green team" infighting between former PRR and NYC personnel that plagued Penn Central.

except now you have the "light blue" vs the "grey" (or dark blue) infighting by the former conrail people not accepting their place

crazy_nip wrote:except now you have the "light blue" vs the "grey" (or dark blue) infighting by the former conrail people not accepting their place

I get a kick out of the way this poster states his opinions and suppositions (consistently and openly anti-CR in these forums) about former Conrailers -- as if these statements were facts of common knowledge. (They aren't.)

As if he actually knew what the "place" of former CR people is, or even should be. (He doesn't.)

As if former Conrail people were solely responsible for the management policies and strategies that have resulted in the problems encountered recently on the property. (They aren't.)

As I said, I really get a kick out of it. It's so predictable.