Your Dec. 7 article (“Railroad jammed by merger loses track of itself,” Business) treats the difficulties related to the Union Pacific/Southern Pacific merger as inherent to all rail mergers, even the pending sale of Conrail to CSX/Norfolk Southern.
What’s missing from the article is any sense of the factors that make the Conrail transaction a different kind of merger altogether, with little in common with the Western rail merger that was the subject of your story.
Some mergers are actually consolidations, two overlapping systems that downsize their way to greater efficiencies, leaving a trail of abandoned track and “excess” employees along the way.
In contrast, the Conrail acquisition is a “one-plus-one” merger. It’s the kind of transaction that takes two entities that operate in geographically distinct areas and adds them together, extending the new system’s reach and offering more rail options. The result: An increase in direct, single-line service–the kind that reduces delays due to unnecessary freight transfers, reducing transport time and shipping costs to the benefit of shipping customers.
The Conrail transaction won’t involve the deep downsizing that has been a key part of other corporate mergers. In fact, the merger will create more than 100 jobs in Illinois and includes more than $70 million for upgrades and improvements that will directly benefit Chicago-area shippers and consumers.
Other factors that set the Conrail transaction apart include a lengthy planning period as part of the federal review process. CSX Transportation is making the most of that time by conducting an exhaustive, time- and talent-intensive planning period to anticipate every aspect of the Conrail integration. And in contrast to the Western rail mergers, neither CSXT nor Norfolk Southern is in the process of trying to “digest” a previous acquisition.
