It takes a century to build a great railroad, a time span longer than mere lives and careers. Take a look BNSF, the work of the master Empire Builder, James J. Hill and his successors. A century and a half of building the best road and buying and maintaining the best rolling stock has produced a durable profit making machine worthy of the Oracle of Omaha’s investment. And invest they are, spending over a billion a year on track alone and another billion or so on rolling stock. Today and for the future, BNSF is a “franchise” and will be the major transportation provider for the western two thirds of the U.S. for decades to come.
Canadian Pacific hasn’t been so lucky, too far north of the main grain growing, coal mining, and east-west shipping lanes. So while BNSF gets to move grain, coal, and UPS trailers by the unit trainload, CP is stuck collecting business one car at a time. That’s the hand dealt by geography and history, and CP played it well, building a coast to coast and beyond empire of a railroad with ocean ships, hotels, and an airline to boot.
Meanwhile, CP’s twin separated at birth and raised on the other side of the tracks, Canadian National, grew into a pretty decent railroad. And being owned by the Canadian government, CN was an early target for privatization and was darn near given away. With the gift of a railroad worth billions, CN’s CEO, Harrison Hunter, had no problem chasing pesky carload customers away whilst using CN as collateral to buy Wisconsin Central and Illinois Central, giving CN a north-south mainline as it pawned off the east end of it’s own east-west transcontinental mainline. As customers cursed CN, paper profits and the stock rose. Then Mr. Hunter conveniently retired, probably just before he would have left under less friendly circumstances.
Meanwhile, the usual suspects- a gang of corporate raiders- took control of CP and dragged Mr. Hunter out of retirement to run CP in hopes he had another “turnaround” in him. Having found out which secretary to dictate his orders to and where his executive restroom is, Mr. Hunter has gotten down to the business of what he does best- bleeding a railroad to death. For starters, he’s shut down four hump yards- hump yards are those track filled giant bowls where railroads use gravity to switch cars- and when you’re by nature a carload road like CP, hump yards are the heart of your railroad. And after rumors of mass dismissals of the old CP management, Mr. Hunter has had the nerve to come right out and exclaim that he’s going to improve CP even more by laying off another 4000 workers. Meanwhile, the railroads that know how to run a railroad are hiring instead of firing, knowing they’ll have to have replacements ready for the wave of retiring baby boomers.
And true to form, Mr. Hunter just announced that the former CNW mainline from Tracy, Minnesota west across South Dakota and just barely into Wyoming and Nebraska is up for sale. Now the fact that Mr. Hunter has chosen Tracy as his point of amputation is exhibit one that he knows not what he is amputating… Tracy is a mere division point, a place where train crews from Waseca and Huron exchange trains, get some sleep, and head back home. There’s a tiny yard in Tracy, a grain elevator, and a shed big enough to cover a locomotive. But since the rail line that split off to the northwest to Watertown was torn out three decades ago, Tracy has played but a bit role on the line. Now one of the tricks of the trade of spinning off a short line is to not give the new owners enough track to compete with the selling railroad or connect with a competing railroad. Just 20 miles west of Tracy on the track that CP wants to sell is a short track connecting the former CNW line to BNSF’s main line from Willmar to Lincoln and points south. Yup, CP is going to give the new owners an easy turnoff to a competing railroad!
Now granted, there is a competing theory of the conspiracy variety that CP wants to snip the line at Tracy ’cause there’s frac sand to the east. True, but the frac sand is at least 80 miles east. And all of the known sources of frac sand in the Minnesota River valley are on UP’s, not CP’s, line. The nearest even wet dream of a frac sand mine along CP’s tracks is over 150 miles east of Tracy.
It tales a century to build a great railroad, but less than a decade to destroy and dismember one, witness the late great Milwaukee and Rock Island. Like the “brilliant” executives that bled those roads right into bankruptcy, Mr. Hunter doesn’t even know where or what he’s amputating. And just like dozens of other railroads and other once great bodies corporate bled, amputated, and sliced & diced like the Milwaukee and Rock Island, it’ll look good for awhile and the stock will skyrocket. And by the time even the stock market figures out that the corporate carcass of CP is dead and rotten, Mr. Hunter will be back enjoying not one but two well funded retirements…