Turn off westbound Interstate 80 at the Minooka exit, then travel south along a two-lane ribbon of highway that seems to lead nowhere, past the Dairy Queen and the railroad tracks, until you arrive at a small industrial park. A right turn takes you down a lonely blacktopped road, past modern factories and warehouses, leading to an abrupt halt as the road dead-ends in an empty field.
There, on either side, in two separate structures, is housed a company that’s a railroader’s dream.
Inside the two buildings are parts of diesel locomotives. Big parts, small parts. Locomotive truck assemblies. Control stands. Wheels by the score. Twelve-cylinder and 16-cylinder diesel engines. Rebuilt pistons, cylinder heads and liners.
And over in the corner of the main building, the ultimate coming together of all those parts: a shiny, bright red, rebuilt locomotive, all set to roll out to the southeastern Iowa petrochemical firm that owns it.
This year, if it’s anything like the last, at least 19 such rebuilt locomotives, all 90 to 100 days in the rebuilding, will find their way onto the tracks of short-line railroads and industrial complexes around the United States, thanks to the efforts of Minooka’s Relco Locomotives Inc. Relco not only rebuilds and remanufactures locomotives for short-line railroads, steel mills, petrochemical plants, grain facilities and other manufacturing concerns, but leases them as well. The firm operates the largest privately owned fleet of locomotives in the nation, and, with several service centers strategically placed across the U.S., is the only leasing company with the ability to provide service anywhere in the country.
“They’re an up-and-coming locomotive rebuilder, not just here in the Midwest but throughout the country,” John Paschke, the superintendent of the locomotive department of the Elgin, Joliet & Eastern Railroad, said from his office in Gary, Ind. “In the last few years, they’ve expanded greatly in the scope of the work they perform, in the size of their fleet and in their shop repair capability. That kind of expansion only comes as the result of building a good reputation in the industry.”
The 31-year-old company, which began in Joliet and moved west 10 years ago, was the brainchild of George Bachman, father of current president Don Bachman. George Backman had borrowed $8,000 to purchase and rebuild a locomotive and turned that investment into Relco (an acronym for Railway Equipment and Leasing Company), a business that owns and leases up to 150 locomotives.
“Back in 1962, my father was the chief mechanical officer with the EJ&E Railroad,” Don Bachman, 48, recently recalled. “He recognized then that there were good locomotives available to be rebuilt, and there was a need for them on the part of short-line railroads and industry.”
The company was a part-time venture for the elder Bachman for eight years. But in 1970, he left the EJ&E and began running Relco full time. Don Bachman, who had studied briefly at Joliet Junior College before entering the home construction business, joined his father and two other full-time employees in the business. The transition to full-time operation put Relco in a position to profit from two separate developments that, over the years, would significantly change the railroad industry.
The first was a decision by the Class I U.S. railroads, among them such giants as Santa Fe, Burlington, CSX, Southern Pacific and Union Pacific, to concentrate on fewer and larger locomotives. In response, the two biggest players in U.S. diesel locomotive manufacturing, General Motors and General Electric, began phasing out locomotives with less than 2,000 horsepower in the late 1960s.
The second development was the divestiture by the same railroads of small sections of track they had long owned. “These have typically been sections of track that the major railroads spun off because they couldn’t make money on them any longer,” said Bachman.
“As railroads downsized and these short tracks were made available, they were bid on by any number of entrepreneurs and smaller companies. As a result, there have literally been hundreds of new short-line railroads started in the last 10 years.”
These upstart short-line railroads, possessing anywhere from 50 to 100 miles of track, provided one potential market for Relco. Another market already existed in petrochemical plants, steel mills and grain facilities, some of which have as many as 150 miles worth of track winding through their complexes.
Both markets were identical in their need not for the large horsepower locomotives that GM and GE had begun to produce, but for the smaller horsepower product manufactured prior to 1969.
“Short-line railroads and industry never have needed the high horsepower locomotives,” said Bachman. “For them to use high horsepower would be like a small delivery service using semi-trailer trucks.”
Requiring first-class, low-horsepower locomotives that could be run economically, both short-line railroads and industrial companies faced but two options: buy a locomotive from an existing railroad and have it rebuilt or lease a rebuilt locomotive.
The situation was tailormade for Relco, which had two ways to meet their needs. They could sell industry and short-line railroads completely rebuilt locomotives or they could offer them leasing deals, adding full maintenance anywhere in the country.
Because other companies specializing in rebuilding or remanufacturing locomotives chose to offer service only on a regional basis, Relco’s business grew rapidly. But servicing those locomotives, which included doing preventive maintenance on every locomotive in the fleet every 30 to 90 days, kept the younger Bachman and his associates on the run.
“Back then, in the 1970s, we did everything out in the field, on-site,” Bachman recalled. “We got an airplane, and for about 10 years, two other pilots and myself not only flew the plane but serviced locomotives throughout most of the country. We had facilities in Louisiana and Texas that serviced locomotives in the South and West. But we covered the rest of the country, everything from North Dakota to Georgia, from Nebraska to the East Coast.”
The barnstorming came to an end in the mid-1980s after Relco’s establishment of additional service facilities in Pennsylvania, Georgia, Alabama, Indiana, Oregon and Utah.
Another change came about in 1983, when Bachman and his father decided to expand Relco’soperations. The Joliet facility they’d used during the company’s first two decades simply didn’t offer the available space for expansion, so they began scouting new locations. Minooka, with its rail lines and its abundant space, provided the answer.
Chief among its advantages is its close proximity to Chicago, the rail capital of the nation. According to Bachman, the largest concentration of locomotives in the United States is located within 200 miles of Chicago, meaning Relco doesn’t have to go far to find shippers in need of locomotives.
A second advantage of the Minooka location is its proximity to the juncture of Interstates 80 and 55, two of the nation’s principal highways. Those arteries facilitate a steady flow of trucks into and out of the Relco facility.
“Not only can we get parts faster, but our own trucks can go out more easily to service locomotives,” Bachman said. “We own one semi-trailer truck and a fleet of 27 service and crane trucks. We frequently travel to our customers to provide service or, if necessary, major repairs. So the closeness to major roadways is especially important.
“In addition, we still operate a plane, which we keep just six miles away at the Joliet Park District Airport.”
At the time of the move in 1983, the company had seven employees in the shop and another three in the office. Today, with contracts to rebuild or remanufacture locomotives for the government since 1987, Relco has more than tripled that size.
“Now we have 25 employees in the shop and another 10 office workers,” said Bachman. “We brought most of our employees with us from Joliet in 1983, but we also added a lot of people from Ottawa, Morris, Minooka, and New Lenox.” Relco’s other service facilities around the country bring its total employment up to 65.
Among the newer employees are the two oldest of Bachman’s three sons. Doug, 26, is vice president of finance and administration, and Mark, 24, is a district manager of field maintenance.
The fact that his sons have followed in his footsteps is not surprising to Don Bachman, who acknowledges that railroading runs in the family. Not only did Don’s father work for the EJ&E railroad but his grandfather was an engineer on the Rock Island line.
Also helping to meet the personnel needs of the growing company has been the Grundy Area Vocational Center, a skills training program run by the county.
“It’s been a very good program for us,” said Bachman. “We have people here who’ve gone through their engine repair program, their office skills programs and their welding programs.”
And in turn, say Grundy County officials, Relco has been good for the region in general and Minooka in particular.
“Relco has been an excellent neighbor to Minooka,” said Patricia Hibner, the executive director of the Grundy County Chamber of Commerce and Industry. “Their presence in the industrial park piqued interest in Minooka and helped sell additional space there.”
But more important in Hibner’s view is that the hard-working philosophy of the company founders seems to sit well with Minookans.
“The work ethic of the Bachmans is very congruent with the considerable work ethic of this traditional farming community,” Hibner said. “They complement the work force, and the work force complements them.”
Today, the rebuilding, remanufacturing or repair of customer-owned equipment comprises 40 percent of Relco’s business. The remaining 60 percent comes from the rebuilding, remanufacturing, leasing and servicing of its own locomotive fleet.
And according to Bachman, quality service is the key to the success of the latter segment of the business. “We’ve worked very hard to build a quality reputation,” Bachman said. “That comes from not only providing customers with good locomotives but from having a good support system backed by reliable service. You can have the best locomotives imaginable, but it doesn’t mean much if you can’t provide the service.”
Dan McGowan, Relco’s vice president of operations, takes the talk of service a step further. As the man in charge of field maintenance of the company’s leased fleet, he’s in the field three to four days a week, 28 weeks a year. The largest part of his job is making sure Relco’s customers are satisfied with the service provided.
“What’s really helped us grow is our relationships with customers,” he said. “People talk about customer service a lot these days, but we’ve been doing it for 20 years.
“By setting up service districts in various parts of the country, we’ve been able to give our customers consistency. They deal with the same person over and over.
“And when they need service, we don’t tell them we’ll be there in two or three days. It’s more like hours. Last year, we even were out servicing a locomotive in Indiana on Christmas Day.”
One of Relco’s longest-standing customers is Amoco Chemical Company of Joliet, which has leased locomotives from Relco for more than 15 years.
“We ship product in rail cars and need a locomotive to transport those cars from our complex to the main line,” said Jerry Pierard, materials management supervisor for Amoco Chemical. “That locomotive gets a lot of work; it’s almost never sitting idle.”
For that reason, Pierard values the quality of the locomotives Relco leases and especially appreciates the firm’s prompt service. “If we have a problem with a particular locomotive, they’re Johnny on the spot,” he said. “It’s been a good partnership between Relco and Amoco Chemical. We’re very, very satisfied with both the equipment and the service.”
With more and more short-line railroads coming on line and with the major railroads increasingly less willing to roll into an industrial complex to take product out, it appears Relco’s business will continue to boom in the years ahead.
“The general trend in railroading today is that manufacturers have to come up with their own (loco)motive power, and they seem to have a growing interest in subcontracting out everything but their core business,” said Bachman.
“They turn over the supply of locomotives and the maintenance to us, and that allows them to concentrate to a greater extent on their own business. So I’d say we have a very substantial potential to continue growing.”
With the company on the fast track to continued success, it appears Don won’t have to stay at the helm as long as his father did. The elder Bachman retired three years ago at age 75 to run a cattle ranch in south central Iowa.
“It’s my plan to have an organization able to function without me long before that,” Don Bachman said with a chuckle. “In fact, we have a good organization right now. That’s our best asset.”
