NS Peavine talk

[OSRR]

The wrong people are losing their minds about it. If you work for NS you have every right to say what you want and be worried. The foamers worried about meaningless things like the steam program and the endless American Chopper special locos need to get a life. When you're dealing with the amount of money involved who knows what will happen.

I work for NS and don't want to see it happen. Yea, the steam program and heritage units are nice ( I think it shows character in the industry) but, bottem line they mean nothing for profit.

Rumors abound right now that corporate is realigning the divisions (I believe this is more than a rumor). They're trying to cut costs up top and work the division budgets around. The down fall of coal really hurt... didn't hurt near as much where I'm at but, it's noticeable in the drop in traffic. Right now, time freight and intermodel are keeping us moving.

[brc0227]

The Pocahontas division is gone. I do know that. Not sure what other divisional realignments are being planned. But the pokey is going to be merged into the lake and Virginia divisions early next year.

As for the 1000 miles of lines NS is looking to get rid of. Bit. I haven't heard of any lines being dumped. But doesn't surprise me. I figured that was one of the next steps in this process was to abandon, lease, or sell what they could on the low traffic or already out of service lines. Unless the CCET can work out a deal I would be surprised if the state of Ohio would consider buying the out of service portion of the Peavine. But you never know I guess. I look for the little used West Virginia Secondary to be on the chopping block as well. Have also heard a rumor that Williamson is going to be turned into a whistle stop/recrew point. And get rid of most of the mechanical personell and anyone else They can feel non essential. NS has already cut over 100 carman system wide in the last few months. With the potential for more to come.

As for the takeover. Being an employee of NS I hope to hell it doesn't happen. Harrison will guy this company if given the opportunity. And will leave alot of good people with little chance of ever working for the railroad again.

[OSRR]

The Pocahontas division is gone. I do know that. Not sure what other divisional realignments are being planned. But the pokey is going to be merged into the lake and Virginia divisions early next year.

As for the 1000 miles of lines NS is looking to get rid of. Bit. I haven't heard of any lines being dumped. But doesn't surprise me. I figured that was one of the next steps in this process was to abandon, lease, or sell what they could on the low traffic or already out of service lines. Unless the CCET can work out a deal I would be surprised if the state of Ohio would consider buying the out of service portion of the Peavine. But you never know I guess. I look for the little used West Virginia Secondary to be on the chopping block as well. Have also heard a rumor that Williamson is going to be turned into a whistle stop/recrew point. And get rid of most of the mechanical personell and anyone else They can feel non essential. NS has already cut over 100 carman system wide in the last few months. With the potential for more to come.

As for the takeover. Being an employee of NS I hope to hell it doesn't happen. Harrison will guy this company if given the opportunity. And will leave alot of good people with little chance of ever working for the railroad again.

Yea, Lake will go to Williamson. I've been hearing February for all that.

The Secondary rumor has been floating around for a couple years. Last I heard they wanted to sell it to the Ohio Central but, they had no interest in it.

They've already layed off around 50 or so in Portsmouth (Shops/Carmen/Transportation). I just heard a new rumor of 100 more come January... I certainly hope not but, I see it comin. On the Transportation side, when your extra board guys work twice a half and draw guarantee, it just can't last.

[brc0227]

They've layed off 56 carman in Portsmouth. Haven't touched maintenance of way yet. Only thing I've heard for transportation in Portsmouth is that they cut the extra boards. I know they layed off 3 carmen, 3 laborers, and 2 electricians in Williamson today. Layed off 5 carmen in Buffalo wednesday. They also layed off 6 carmen in Williamson 2 months ago. Along with carmen at Norfolk, decatur, Macedonia, and shire oaks as well 2 months ago. Just don't remember how many.

[midland sub]

Sounds like Jan 1 or sometime after 380/381 will be abolished on the WV Sec. Rates are going up on what's left and it will be routed south of Charleston. Once traffic is re routed Bannon to Thurston left in service until NS kills off ICI business at Thurston- then it will be Truro. From there to New Lex out of service. Some sort of deal with G&W on New Lex to Glouster. Glouster to Charleston out of service. Seems they will sit on the out of service parts for a few years then make a decision.

[brc0227]

That doesn't surprise me in the secondary. Many of us have wondered why they've kept it open this long with as little traffic as has been on it in the last 5 years or so.

[OSRR]

Sounds like Jan 1 or sometime after 380/381 will be abolished on the WV Sec. Rates are going up on what's left and it will be routed south of Charleston. Once traffic is re routed Bannon to Thurston left in service until NS kills off ICI business at Thurston- then it will be Truro. From there to New Lex out of service. Some sort of deal with G&W on New Lex to Glouster. Glouster to Charleston out of service. Seems they will sit on the out of service parts for a few years then make a decision.

Hmm.. Haven't heard anything about that one yet.

[chapmaja]

Do you really think CP is going to merge with NS? I can't get my hands around that one. I know CP wants them really bad but the red tape involved is tremendous to say the least. Total approval is unlikely on the entire package deal, shareholders will not go along with the new deal, and there are just too many questions. Will it even work? CP wanted CSX really bad and that deal fell though. I really don't see CP buying NS on the deal they are offering now.

Evans in Newtown is on the move. Place is really busy and they have gravel pits that are expanding in that area. I can see maybe they may be thinking about moving gravel by train. That guy is in a little trouble from earlier this year with the government when they came in a closed the place down. Not sure what is going on with that. It will be interesting to see how that materializes. Meanwhile at Plum Road it would be nice if that company would begin using rail transportation.

I read something interesting and it does make since.

EHH has really tried getting a beltway around Chicago for years and years. When he was at CN he wanted the IHB but could not get any of the owners to sell. CN ended up with the EJ&E.

Now EHH is at CP. CP wants the IHB badly and apparently is the largest used of the IHB in terms of overheard traffic. The ownership of the IHB is 49% CP, 25.5% CSX and 25.5% NS. CP wants NS largely for the IHB. By acquiring the IHB, they could have majority ownership of the IHB. In addition, it would give CP access to many major ports serviced by NS.

There currently are a number of CP-NS agreements in place for moving goods to and from Canada over NS lines.

I really think the government would have issue with the IHB being taken over by CP though, and might require a large stumbling block in the plan as it would relate the IHB.

[brc0227]

Do you really think CP is going to merge with NS? I can't get my hands around that one. I know CP wants them really bad but the red tape involved is tremendous to say the least. Total approval is unlikely on the entire package deal, shareholders will not go along with the new deal, and there are just too many questions. Will it even work? CP wanted CSX really bad and that deal fell though. I really don't see CP buying NS on the deal they are offering now.

Evans in Newtown is on the move. Place is really busy and they have gravel pits that are expanding in that area. I can see maybe they may be thinking about moving gravel by train. That guy is in a little trouble from earlier this year with the government when they came in a closed the place down. Not sure what is going on with that. It will be interesting to see how that materializes. Meanwhile at Plum Road it would be nice if that company would begin using rail transportation.

I read something interesting and it does make since.

EHH has really tried getting a beltway around Chicago for years and years. When he was at CN he wanted the IHB but could not get any of the owners to sell. CN ended up with the EJ&E.

Now EHH is at CP. CP wants the IHB badly and apparently is the largest used of the IHB in terms of overheard traffic. The ownership of the IHB is 49% CP, 25.5% CSX and 25.5% NS. CP wants NS largely for the IHB. By acquiring the IHB, they could have majority ownership of the IHB. In addition, it would give CP access to many major ports serviced by NS.

There currently are a number of CP-NS agreements in place for moving goods to and from Canada over NS lines.

I really think the government would have issue with the IHB being taken over by CP though, and might require a large stumbling block in the plan as it would relate the IHB.

The IHB is part of it. But there's alot more to it than just the IHB. Hunter has cut as deep as he can cut at CP. All those cuts will catch up to them eventually. Plus he won't have any more cuts to use to prop up their stock price. So acquiring NS will allow him to continue his strategy of cutting everything possible to prop up the stock prices for the short term gain of his shareholders.

[OSRR]

Do you really think CP is going to merge with NS? I can't get my hands around that one. I know CP wants them really bad but the red tape involved is tremendous to say the least. Total approval is unlikely on the entire package deal, shareholders will not go along with the new deal, and there are just too many questions. Will it even work? CP wanted CSX really bad and that deal fell though. I really don't see CP buying NS on the deal they are offering now.

Evans in Newtown is on the move. Place is really busy and they have gravel pits that are expanding in that area. I can see maybe they may be thinking about moving gravel by train. That guy is in a little trouble from earlier this year with the government when they came in a closed the place down. Not sure what is going on with that. It will be interesting to see how that materializes. Meanwhile at Plum Road it would be nice if that company would begin using rail transportation.

I read something interesting and it does make since.

EHH has really tried getting a beltway around Chicago for years and years. When he was at CN he wanted the IHB but could not get any of the owners to sell. CN ended up with the EJ&E.

Now EHH is at CP. CP wants the IHB badly and apparently is the largest used of the IHB in terms of overheard traffic. The ownership of the IHB is 49% CP, 25.5% CSX and 25.5% NS. CP wants NS largely for the IHB. By acquiring the IHB, they could have majority ownership of the IHB. In addition, it would give CP access to many major ports serviced by NS.

There currently are a number of CP-NS agreements in place for moving goods to and from Canada over NS lines.

I really think the government would have issue with the IHB being taken over by CP though, and might require a large stumbling block in the plan as it would relate the IHB.

The IHB is part of it. But there's alot more to it than just the IHB. Hunter has cut as deep as he can cut at CP. All those cuts will catch up to them eventually. Plus he won't have any more cuts to use to prop up their stock price. So acquiring NS will allow him to continue his strategy of cutting everything possible to prop up the stock prices for the short term gain of his shareholders.

That's what scares me if he get's NS. I may very well be out of a job.

[brc0227]

The IHB is part of it. But there's alot more to it than just the IHB. Hunter has cut as deep as he can cut at CP. All those cuts will catch up to them eventually. Plus he won't have any more cuts to use to prop up their stock price. So acquiring NS will allow him to continue his strategy of cutting everything possible to prop up the stock prices for the short term gain of his shareholders.[/quote]

That's what scares me if he get's NS. I may very well be out of a job.[/quote]

I'm in the same boat in mechanical. If Hunter gets control of us he'll shut down very program shop on the system.

[heypal6878]

I have been reading several financial papers this week articles about CP wanting to merger with NS. Matter of fact CNBC even did a spot on it. CP doesn't stand a chance of getting NS it won't be allowed because it will form a monopoly. CP wants NS badly but everybody saying it won't happen. Now the other option looming is Buffett will he make a move? Will he top the offer from CP. If his rail company tries a deal on NS it would be the best of two evils. If you look of the companies Buffett owns he rarely makes major changes. He may trim down a little work of making more profit but I really don't think he will be cutting normal worker but more of the paper pushers jobs. Face it the rail companies need on hands workers, crews, the men and women that make the rails more. NS is very top heavy, many of the older guys have retired, replaced by university grads that don't have the experience and haven't built up the relationships that the old guys that were with the company for years have worked hard to get. This is what has been pointed out in several articles I read this week.

NS doesn't want any part of CP so that deal is dead in the water. Now with Buffett watching closely I would say he may put a bid in for NS. Crammer says that NS is a strong company and they don't want any kind of Merger. Three is a good possibility that nothing happens and all bids will be off in a few months.

All this merger talk has drove the share price up yet looking at want the guys who follow the market say the price will begin to fall back very soon as a merger is very unlikely from CP and NS doesn't want to sell out to anyone.

[brc0227]

Here's the issue though. Yea NS doesn't wants a merger with anyone. Especially Harrison and CP. But money talks. And the shareholders at NS would be much more easily swayed if the money is right. And with CP trying to convince our shareholders that NS management is incompetent. Who knows what will happen in the end. In the end I do agree with you that the STB won't allow a merger. But if cp and the NS shareholders attempt a merger with the whole voting trust arrangement. The STB could deny the merger and we would still end up with Harrison as CEO of NS. And even if none of this comes to fruition. Harrison has still made his mark on CSX and NS. By forcing them to cut way deeper than they probably would have of CP had never pursued either railroad.

[redcrumbox]

Now with Buffett watching closely I would say he may put a bid in for NS.

heypal6878, let the bidding begin. Take a moment and look at the STB hacks, one being involved with the ICC Termination act, another involved with a BNSF intermodal yard, and lastly, a former UTU hack and sitting chairman when Warren bought BNSF. With nearly 400 pages of regulations covering rules of a merger, anything is possible nowadays. Like maybe the CCET gets the 'vine' after a merger. Remember, never say never.

[midland sub]

You know the CCET could lease the rest of the Peavine to Vera tomorrow if there was a reason to. At best you might see another 11 miles to Plum Run to go along with another customer starting up next year. It's supposed to be a captive move where the cars won't leave the CCET so we're guessing it's going to be a Plum Run to Batavia or Alton move.

[OSRR]

You know the CCET could lease the rest of the Peavine to Vera tomorrow if there was a reason to. At best you might see another 11 miles to Plum Run to go along with another customer starting up next year. It's supposed to be a captive move where the cars won't leave the CCET so we're guessing it's going to be a Plum Run to Batavia or Alton move.

What does this customer produce?

I'm assuming CCET will make money from these moves... how does it compare to cars that leave the system for their destination?

[heypal6878]

Midland from what I understand the CCET is happy with the Peavine as they have done a good job with the Ag and the paper plant at the old Ford plant but like to get more business on the line. I know they have been contacting other business out that way to land more contracts for rail transportation however there isn't much out there and what is out there NS kind of gave them the shaft years ago.

Currently the CCET has mass amount of tankers and grain cars sitting on the side tracks in Afton to Batavia and east. This is good money during the winter downtime for the company. I forget how much do they get for one tanker or gain car for storage? Another thing is the rain company responsible for any vandalism say like spray painting to the cars while they sit there? Always wondered about that.

I do know anything can happen with a merger but it appears that the CP merger is unlikely. As far a Buffett making a move I can see a bid coming there. Do you think that the reason CP wants NS so bad now is because of the increase business NS will be getting when the Canal trade opens up in the next few months? I mean NS will be hauling goods north, south and east. With coal and oil shipments down this Canal business is a good fit during the downturn and one CP would like to have.

[OSRR]

Midland from what I understand the CCET is happy with the Peavine as they have done a good job with the Ag and the paper plant at the old Ford plant but like to get more business on the line. I know they have been contacting other business out that way to land more contracts for rail transportation however there isn't much out there and what is out there NS kind of gave them the shaft years ago.

Currently the CCET has mass amount of tankers and grain cars sitting on the side tracks in Afton to Batavia and east. This is good money during the winter downtime for the company. I forget how much do they get for one tanker or gain car for storage? Another thing is the rain company responsible for any vandalism say like spray painting to the cars while they sit there? Always wondered about that.

It still interests me that a small startup with such a small amount of business was able to afford GP49s... maybe they were goin real cheap. I don't claim to understand the finances of a starting shortline (or even a running one).. thats not to say I wouldn't mind to know.

[midland sub]

Let me answer this in one post.

CCET is part of a company called Frontier Rail. They have rail operations scattered all across the US including Ohi-Rail in northeast Ohio. They for the most part are into small contract switching and transloads. The larger operations typically are low traffic and generate a lot of their revenue by car storage fees. The locomotives for the CCET came from Frontier and I believe they might still be owned by a subsidy of Frontier with a few other investors. Owner lives and works in the state of Washington. I think ownership has been here a few times at best. There's been several changes at who is in charge of the CCET since it began almost 2 years ago.

New traffic sounds like it's going to be something for Evans Landscaping. Maybe stone from Plum Run to somewhere on the western end of the CCET and a corresponding back haul. Evans allows CCET to use a spur into one of their properties to store the 2 locomotives and that caboose they had no idea they were getting. Evans does a lot of different things other than landscaping, one side is the demolition business which could be the back haul. Being it stays on the CCET they will set the rate and do the billing for Evans to whatever profit margin they will need to justify the move. That's all I know about it other than it was something that's been looked into since day one.

Heypal you are correct they have tried. Winchester took the lead on getting the 600 loads of soybeans moved by leasing the 100 grain cars. Now what the future holds for Winchester is a good question as with the horribly low grain prices now who knows when the next will move. The biggest issue CCET faces we've discussed before. It's they have no control over rate structure for anything interchanged at Clare. I believe CCET is given a flat fee per car handled from NS. NS sets the beyond Clare. If tomorrow NS decides they no longer want to deal with the grain traffic coming out of Winchester they will raise the rate and kill the traffic. Same as with Huhtamki. That's what makes it so difficult in creating new traffic. There's only so much CCET can do. Anyone in marketing at any rail company will tell you there's tons and tons of potential new customers. It's once they do the numbers of what it's actually going to cost and what equipment is available to move it that the trouble begins. Remember not every rail spur that no longer sees service was always driven off by the railroad. A lot of times the company stopped themselves due to all sorts of issues non rail related. So for someone like the CCET to push and get a new customer it might only last a couple of moves before the customer says hey this is enough. I cannot really afford it, or it takes too long or their business changes. There's really not much traffic to develop like the potential with Evans that stays just on the CCET.

As for the merger talks, blah blah blah. No matter what happens or who ends up in charge there's major changes coming in two weeks. These changes are coming because of the threat of merger and takeover. Even if Ackman said on Monday he was dropping the push for the merger almost everything planned to begin Jan 1 would still happen.

[brc0227]

Keep us informed Midland if you hear of anymore possible changes other than what was mentioned above.