The reason to "erase" the image of the Frisco was an attempt to congeal the components into one homogeneous group acting as a single entity rather than fiefdoms of us versus them mentality. I don't think it worked.
I've been through a couple of acquisitions during my years in the private sector. As a general observation, the acquiring company is generally well-advised to eliminate as many remnants of the acquired company as possible, for the simple reason that most mergers are not really mergers, they are takeovers. As a result, customer service, employee morale, etc., all suffer in the short term. On the first day, if it were me, I would buy out the CEO, CFO and VP of human resources, thank them for their services and send them on their way with a golden handshake. In BN's case (and in the case of the UP-MP merger), the acquiring company wound up with some pretty savvy new people, but in the end, the successor companies were still going to be BN and UP. GS
Ethan, I guess I'm not the youngest person on here after all. While Canadian Pacific-Kansas City Southern is the first merger between Class I railroads since Conrail was split in 1999, I would argue Canadian Pacific-Kansas City Southern doesn't count as a "mega-merger" because Kansas City Southern is under 10,000-miles even with the addition of Kansas City Southern de México. Anyway, I'll try my best to answer your questions: Santa Fe didn't pursue Frisco because Santa Fe's President John S. Reed was notoriously skittish about merging with anyone. Reed was a good railroader but was very much opposed to mergers because of Reed's attachment to "his" railroad. Prior to Reed's arrival, Santa Fe held merger talks with Frisco, but these were terminated when MoPac attempted a hostile takeover of Santa Fe. MoPac made merger offers to a number of railroads during the 1960s-70s and only settled on a merger with Union Pacific after Santa Fe turned them down a second time. Burlington Northern had run-through operations with a variety of railroads prior to 1980. However, Burlington Northern's run-through operations paled in comparison to those of Union Pacific, which had more run-through operations than any railroad. I imagine the lack of Burlington Northern-Frisco run-throughs (aside from a single BN-SLSF-SCL run-through) prior to the merger was due to Frisco's longstanding relationship with Union Pacific. Another reason is Burlington Northern's run-throughs with MoPac were mostly coal, while Union Pacific's run-throughs with Frisco were merchandise traffic. A lot of Burlington Northern guys complained about Frisco management "taking over" Burlington Northern. Any sort of favoritism towards the ex. Frisco by management would've gone over with Burlington Northern employees about as well as a lead balloon. As it was, many Burlington Northern employees in the Pacific Northwest complained bitterly about how "the Frisco clique" sold off the former Northern Pacific west of Billings, tore up the "High Line" and had a generally antagonistic approach to dealing with employees and shippers, at least from their point-of-view. Gabriel G.
Keith, Not to dismiss the feelings of Frisco employees, but they were hardly alone in their animosity towards their new employer. Rob Krebs reported that at a meeting with employees in Havre, Montana in 1996, he encountered Burlington Northern employees who were still angry Great Northern and Northern Pacific had merged in 1970. Railroad employees have a degree of loyalty to their employers that's unmatched in most industries except, perhaps, the airline and automotive industries. Gabriel G.
My perspective. Railroaders's, about any era hate change, no loathe change. I did at one time, have a certain amount of loyalty to the brand, but thats been waning for a some time, especially in the last 5 years. What is loathed is the smiles from mngmnt and how much things will be better, all the while what was actually happening, are losses in jobs and essentially services, families being forced from their schools, friends and homes to other locations, sometimes working under worse contractual environs. The biggest reasons for mergers is to streamline operations = losing jobs. The down sizing of terminal operations, see the carrier walk away from, or drive away on line customers with long ties to these potentially displaced employees. Its true that a railroad will step over $100 bills to pick up a nickel. Unless you have lived it, I have, 2 times, you really dont understand what is involved, from a railroaders aspect. Cant say it never ends well, but it almost never does. I've met Rob Krebs, I respected him, I think he did try to do a good job. Board members were sometimes not happy with him because he was spending a lot of $$ building capacity into the trunk routes. An interesting note on Mega mergers from the STB. Page 31 of the board’s decision, there is a 105-word passage that – aside from a potential Canadian Pacific-KCS merger, seems to slam the door shut on future Class I combinations, in three sentences, the board explained why we’ll never see a transcontinental merger under current review rules: “Neither Applicants nor the Board can perfectly predict future strategic responses to a CN-KCS transaction. However, a simple geographic analysis of the rail network would suggest that a carrier in CP’s position, i.e., one that would be the smallest carrier by far after a CN-KCS combination, might need to look for potential strategic alliances, which might in turn trigger yet more strategic responses by other rail carriers,” the board wrote. “Approval of a CN-KCS voting trust could speed up downstream consolidation movements prior to the Board even having had an opportunity to assess them based on the record yet to be developed in this proceeding.” I think basically saying they dont want this domino to fall, starting the same effect on others class 1's in the US. This may lead one to consider if this decision will drive Class 1's to spin off more less density lines. But how much more fat can be trimmed these days?
Tom, I did not mean to come off as cold or uncaring with regards to the employees who lose their jobs or are dislocated as a result of mergers. As you mentioned, job cuts and forced transfers do little to improve employee morale and are usually the reason employees feel as though they had things better before the merger took place. I once read a quote from a contract lawyer who said something along the lines of: "The key to a good contract is to make sure both parties feel as though the other guy got a better deal than they did." While I fundamentally disagree with that way of thinking, I think that's true of a lot of railroad mergers. Frisco employees felt as though they were screwed over by Burlington Northern, while pre-merger Burlington Northern employees felt as though Frisco management had taken them over. Gabriel G.
Tom, Thank goodness. Sometimes I worry I come off as too "academic." At one time, I was very much in favor of transcontinental mergers, but I'm not so sure anymore. Would merging the industry into two giant systems really be worth it if the price was re-regulation? I don't think so. On the contrary, I think we'll start to see Class Is bulking up by going after successful Class II and Class III railroads. Think what Canadian National did with Wisconsin Central, Canadian Pacific with the Dakota, Minnesota & Eastern/Iowa, Chicago & Eastern and what CSX is trying to do with Pan Am. Gabriel G.
Here I will respectfully disagree, well for now . Remember the same American hero that went to Canada to save their RR's with their version of PSR? He was busy down sizing the whole RR, taking out double track, and terminals at every opportunity, downsizing infrastructure and capacity. Well the our right honorable friends to the North are now busy replacing a great deal of the mistakes of PSR and as you indicate, are now gobbling up what they see as gaining tonnage and physical plant, at the end of the day growing potential and earnings. On the other hand we in the US are still in the throws of PSR, parking trains (no power, no crews, no place to put the trains, limited capacity). We have not wised up, and I fear we have farther to regress, before we hit bottom and realize the huge mistakes made. Matt Rose disagreed with many principals of PSR and some say led to his voluntary exodus. Consider Winston Churchill's pithy quote "You can always count on Americans to do the right thing - after they have tried everything else".
Tom, Thankfully, I think the transition you're describing will happen sooner rather than later, especially as railroads begin to view carload traffic as a source of growth to offset the decline of coal. Norfolk Southern is currently experimenting with a 21st century version of LCL, which suggests the transition has already begun. Expect to see a whole bunch of shortlines and regionals disappear over the next decade. Gabriel G.
