Canadian Pacific trying to merge with CSX

[I-10east]

^^^Well, I guess that Micheal Moore had it wrong then.

[simms3]

Welcome to capitalism??

Which many think is only a 'Republican thing' but it's also a cutthroat 'invested shareholder' thing. CSX is literally one of the four major railroads like Monopoly in the US. IMO they will be fine without any CP deal. Shares aren't through the roof, but it's far from a 1929 downward spiral, as they remain stable.

You are a conservative, right?  And conservatives believe in the free markets, private property rights, and de-regulation, generally speaking, right?

So to that end, piping away on your thoughts on what some other company should or should not do with their time, resources, and money, especially as it pertains to something as "harmless" as a merger

(as opposed to say not using their resources to maintain their rail lines, resulting in catastrophic accidents that affect innocent lives or long term environmental damage, or using their resources to condemn your home without proper due process to build an unnecessary railroad to nowhere for political gain as an indirect kickback),

is really hypocritical.  Start complaining once you have a financial stake in the game (i.e. you own shares, and not just one), or if the merger will somehow result in some sort of bodily, financial, or emotional distress to you/your immediate loved ones and dependents.  Or don't complain at all what another company chooses to do or not to do with its resources.

[spuwho]

To I-10....I am not trying to advance the demise of CSX. I am explaining why CSX is the preferred target of stock hawks and now another railroad.

They underperform compared to their peers and their management has shown resistance to outside scrutiny and governance.

BNSF is currently the model that people refer to for business efficiency in rail. Warren Buffett bought them out and took them private. So they arent as visible as they once were. But he bought them becuase they are well run.

CSX has made some improvements since the whole board debacle with TCF, but compared to their peers they still lag.

I dont think this is a "growth at any cost" moment, this is someone who has found a higher return through some efficiencies.

It is impossible to know where a HQ will be post ANY merger, so assuming it wouldnt be in Jacksonville is premature and reflects a lack of confidence in the city more than anything.

[I-10east]

You are a conservative, right?

Nope!

[I-10east]

They underperform compared to their peers and their management has shown resistance to outside scrutiny and governance.

From what I hear, Canadian Pacific isn't exactly ran like well oiled machinery either. 

[spuwho]

I agree...CP was run poorly. That is why they went through a management shake up and they have a new management team with a history of shaking things up and making prompt turnarounds.

[Tacachale]

I would rather see a Fortune 500 company stay in Jacksonville, than see some other company buy them out and move the HQ. Better yet, if there's a merger, I would rather see the new, bigger company be based in Jacksonville.

[Lunican]

This seems unlikely however it would trigger an avalanche of mergers, leaving only 2 or 3 major North American railroads. Combining these systems would be a major undertaking and would get a lot of scrutiny from the STB.

You could even end up with BNSF-NS-CN and UP-CSX-CP one day. I'd bet on Omaha and Fort Worth as headquartes cities.

[spuwho]

There is a good recap of the merger options written by Mike Blaszak, who was a transportation attorney for the Santa Fe buyout years ago.

http://trn.trains.com/news/railroads/2014/10/analyzing-the-merger-puzzle

Not sure if this is behind a paywall, but its a good summary of the crystal ball on the merger players.

[mtraininjax]

literally no one thinks this.

That is for darn sure out here on this board.

Look at what CSX has as its bread and butter - coal. The coal it sends to utilities and exports to Europe and South America is not the same as the coal mined in the Dakotas, the eastern coal is dirtier and has more issues with it. If Obama has his way, it will cost utilities a mint to change to adopt to the pollution targets and doing so might be best served with cleaner coal and other changes, so CSX will have fewer buyers of coal. They move other items but the bread and butter of the Chessie system was coal.

Norfolk southern has a similar issue as it has the same issues with coal on the east coast. I see them dancing with UP for that east west deal, BNSF is already a monster. Either way, the short-line railroads are the real winners here, as the biggies will have to give up a lot  to get a deal done.

If CSX goes away from Jax, so be it, like Simms said, CSX is really just a transportation utility so be it if they get sold and moved out of Jax. Hey, we got GE and we're building valves for the oil industry! Woo Hoo!

[I-10east]

 

[Ocklawaha]

This seems unlikely however it would trigger an avalanche of mergers, leaving only 2 or 3 major North American railroads. Combining these systems would be a major undertaking and would get a lot of scrutiny from the STB.

You could even end up with BNSF-NS-CN and UP-CSX-CP one day. I'd bet on Omaha and Fort Worth as headquartes cities.

I think that's about right Lunican, though I'd give Kansas City Southern to CP RAIL before they go anywhere else. Part of this, including the more or less recent CN takeover of the Illinois Central was to give them access to warm water ports. Most rail traffic flows east-west, but Canadian grain and oil, flows south, Mexican assembly products flow north. Kansas City Southern is a lightweight as far as corporations go, but has done some pretty freakin' amazing things over the last 20 years including beating UP in a Mexican buy-out, then cobbling together a 'system' through buying up connecting shortline links and purchasing then rebuilding long abandoned right-of-way stretches through south Texas.

CP RAIL on the other hand is recovering from years of some very bad decision making at the top which culminated in sacking the CEO. They now seem to be getting their act together and a try for CSX is just the second volley in what is almost certainly going to shake out as two great continental systems. In any case, unless this city get's its own act together and REALLY goes to work to woo CP, UP, CSX AND KCS executives we'll soon have another big empty tower downtown.

[spuwho]

I might add the KCS was voted as an exception to the Class 1 merger rules the STB passed when BNSF and CN tried to merge.  The exception passed 2-1. 

It just means that anyone attempting to buy or merge with the KCS will not be subject to the Class 1 super-merger rules and will be judged solely on merit.

And KCS will lose their Mexican monopoly with TFM in less than 10 years when Texas Pacifico rebuilds the International Bridge over the Rio Grande at Presidio that Santa Fe originally built and reconnect with Ferromex. That route also takes them to the car suppliers/manufacturers in Chihuahua and on to the Pacific port of Topolobampo, Sinaloa.

This means China Inc. could bypass US West Coast Ports completely and route traffic to KCMO directly.

But I digress.