Was Chicago & North Western Not Sustainable?

[@LourdesReynoso-x7p]

I freaking love your content, please make some more videos 😮

[@killerbee6310]

I will...I will. A lesser man would have crumbled under the pressure by now...

[@Robert-ki7bz]

Interesting stuff. Thanks for sharing!

[@killerbee6310]

Well thank you for taking the time to comment.

[@paulbergen9114]

As a youngster I remember looking at old official guides and state highway maps and the Midwest was just so overbuilt and it took a bit of magic to get rid of a branch line. Even some of the big cutbacks in 82 covering Ashland Ironwood Bessemer etc 300 + miles doesn't right the ship. Then add in industries that either were going under or the higher paying traffic siphoned off by trucks. Plus the crew size on some of the smaller ones and with the infrequent service car utilization wasn't that good. Virtually The Perfect Storm. Thanks for sharing your perspective

[@killerbee6310]

I once asked at a CNW Stockholders meeting whether the reduced crew agreement would change the economics of the branch lines and help preserve them. The reply was that in most cases the economics were so bad that no, reduced crews was not enough to save them.

[@albundy8139]

Always appreciate a good history video! My grandfather worked for Chicago and Northwestern as an engineer and later electrical shop foreman in the 50's and 60's before retiring due to health issues, and it's my favorite railroad for this reason, so I always enjoy learning about it. Thanks again, cheers from just north of the Twin Cities!

[@killerbee6310]

Cool - and thank you for taking the time to comment.

[@25mfd]

what i find interesting are TWO things... first is, for all the numbers and graphs that they presented, the authors of the report left out the numbers and graphs that showed just how "badly" the crew consist issue was impacting the companys bottom line second, the authors FAILED to mention that the CNW all the way back on sept 27,1973, implemented a CREW CONSIST AGREEMENT... for those that don't know, a crew consist agreement is an agreement between the union and the carrier, where trains meeting certain physical characteristics may be staffed with ONE brakeman/switchman instead of TWO... and at the then time of the writing of that report (1987), the crew consist agreement had been in place for FOURTEEN YEARS... it would have been informative to see some numbers and graphs showing how much money had been SAVED on crew consists since the implementation of the agreement

[@killerbee6310]

Guess I stirred up a hornet's nest. My intent was to highlight the challenges being a smaller Class One in the 1980's in a territory with too much track and not enough traffic to sustain. I remember two comments by Wolfe - one was the railroad had to increase density. And they wanted to be the survivor. They were trying to accomplish these points by mergers and acquisitions - M&StL and CGW was the start, continuing with RI track and the attempted Milw Road merger. But in the end they of course got swallowed up (which we always knew would happen - it was just a matter of when)

[@25mfd]

@@killerbee6310 you did a good job with this vid... so what do you think went wrong with the cnw after the cgw merger???... do you think the cnw would have faired better if they had merged with the milw... speaking of the milw merger... i read in a milw road historical mag that the milw employees were NOT happy about a possible cnw takeover... not sure why but they weren't happy

[@killerbee6310]

@@25mfd Well, I do not have an inside scoop what was in senior management's mind. So all I can do is speculate. I was there from 1981 to 1987, so lived thru the Milw Road attempt. I agree with Wolfe that there was too much excess rail mileage in the region and that the CNW had to increase its line density. So their strategy of acquiring parallel competitors, abandoning the inferior parallel lines and shifting traffic all onto one remaining line was the correct strategy. But there was just too much track. It seemed everywhere the CNW went, the Soo-Milw Road also went. And both were hungry for business. The WC finally accomplished what everybody was trying to do, albiet on a smaller scale - being the only carrier in their area. This allowed them to go after a lot of log business, because now it was all a single line move and could be priced accordingly. I'm starting to go down the rabbit hole....

[@jeffreyolive8375]

@@killerbee6310 true but some of the branch lines had reduced crews and regularly had 200-300 grain loads per week. I remember checking charges on waybills. Could not see how some industries were not profitable.

[@25mfd]

@@killerbee6310 *The WC finally accomplished what everybody was trying to do, albiet on a smaller scale - being the only carrier in their area* well if you are working on a WC angle of this story, i'm ALL in * It seemed everywhere the CNW went, the Soo-Milw Road also went* definitely would have been a duplication of effort situation

[@boydwalker161]

Thankfully the C&NW line from Rapid City South Dakota to Winona Minnesota wasn’t abandoned and was turned into the DM&E. I chased many trains from Rochester Mn west to Byron and Kasson.

[@bestfriendhank1424]

Very interesting

[@Ninjadude80]

If the railroad was in such bad shape financially, how did they offer such a high sum of money to try to purchase the Milwaukee Road just 2 years prior?

[@killerbee6310]

Good point. I remember they claimed the last bid as a "knockout" - it was meant to be soooo high it would demoralize the Soo Line. So when the judge awarded the Milw Road to the Soo Line, there were some people at CNW exhaling a sigh of relief.

[@boydwalker161]

@@killerbee6310 I remember that and the Government wanting C&NW NOT to aquire The Milwaukee Road because they thought that C&NW would scrap every mile of Milwaukee Road track.

[@beeble2003]

Presumably that money would have been borrowed. The advantage for CNW is that, if they could buy one of their parallel-line competitors, they'd have two lines' worth of traffic. They could put all of that traffic on the better of the two lines and close the other one. That would essentially double their income while keeping their costs the same, and then they'd be able to pay back the money they used to buy MILW.

[@bobozo389]

I always wondered what happened to the CNW. Very interesting info!

[@jeffreyolive8375]

Mismanagement through the 70’s were more responsible for CNW financial problems than crew size. By the time of this report which starts out stating 4 and 5 person crews where in the summary relates most went to 3 person crews. Top heavy management and spinning off short haul branches which became profitable after becoming local regional lines.

[@killerbee6310]

Yes, they definitely were talking out both sides of their mouths. I asked at a stockholders annual meeting if reduced crews would improve the economics of light density branch lines and stem the abandonment of them. The reply was the economics of many lines were so bad that the reduced crews would not make a difference.

[@jeffreyolive8375]

@@killerbee6310 many of the branch lines already were 3 man crews. With the amount of switching required on them the cost of the brakeman would be covered by the improved efficiency. I don’t think the management at CNW cared about efficiency and its effect on cost and employee morale.

[@25mfd]

*Top heavy management and spinning off short haul branches which became profitable after becoming local regional lines* TRUTH!!!!!! look at the ex-cnw fond du lac wi, yard area and the green bay wi, yard area... neither one of those places is closed up... CN now runs BOTH and they are doing pretty good

[@Ninjadude80]

@@25mfd Agreed! The Fox river valley was the most industrial area of WI, and yet somehow CNW claimed it couldn't make enough money there to justify keeping those lines. Of course sale of those lines blew up in their face in 1993 when Wiconsin Central bought the Fox River Valley Railroad. The CNW threw a fit when it knew it would no longer handle all that FRVR bridge traffic between Butler and Chicago!

[@northwoodsguy1538]

​@@Ninjadude80My Dad worked out of Appleton in those days doing switching at Kimberly and Combined Locks. Management said it was a money maker. Then old Wolfe sold the lines. After he died they tried to undo the sale. No go too far along.

[@thomasmackowiak]

Thank you for the insights into the problems that the Chicag0 & North Western Railroad was facing after the deregulation of the railroads in the early 1980s. (Posted 19 August 2024 at 2301 CDT.)

[@killerbee6310]

Yes, it was a tough environment then in the upper midwest - too much track for the traffic.

[@oldclip70]

After looking at this, was employee owned CNW a sham?? But let’s be honest, UP was going to save CNW come hell or high water. UP needed access to Chicago. Rock Island was dead, BN wasn’t preferred, IC Spun off the Iowa division, and the Milwaukee Road was pulled up after bankruptcy in 1977. UP helped CNW with 2 aspects 1. Preferred route for perishables from PFE (SP & UP) 2. Mail trains from US Mail. One aspect that was not mentioned was the impact of the 1981-82 recession. CNW was hit the hardest with traffic down by 14.4 %: That’s more than SP, BN, D&RGW and WP. Otherwise, thank you for sharing. This gives me something to think about.

[@killerbee6310]

No, I do not believe it was a sham. I started in 1981, and many times somebody would point at a clerk and say "he's a millionaire. Bought all the stock he could." Many average Joes did quite well. CNW stopped using the "Employee Owned" slogan after employees starting cashing in and the percentage of outstanding stock being held by employees got less and less. And we knew that eventually CNW would end up in UP's camp - it was just a matter of when.

[@southsidetom]

From 1977 thru 1991 interest rates over 9%. In 1981 was the highest above 16%. Would be nice to have 5yrs prior next to this to see how poorly it was managed through the inflation and recession years.

[@UnionThugg]

Much of this complaining they had was the result of deregulation. The issues surrounding the Milwaukee merger centered around abandonments and the poor relationship the CNW had with its unions. This propaganda certainly didnt help. By the time this was put out, the UP already had its fingers well into the CNW. When the vultures came calling in 1989, and UP had to pony up the bucks to keep it out of foreign hands, everyone knew what the plan was. 6 years later, the shenanigans were over. In the upper midwest, in 10 years' time, we lost the Milwaukee to the Soo in '85, the Soo to CP in '90, GBW/FRVR to WC in 1993, CNW to UP in '95, and BN into BNSF also in '95.

[@killerbee6310]

Ya, as I keep saying, too much track in the upper midwest back then. Someone had to go so no one shed any tears when the Rock went under. Still didn't help. And yes, at least the North Western was honest about all the track that would be abandoned if they got the Milwaukee Road, as more restructuring was still needed then.

[@btraindavidlemke312]

Seems like the only line that was worth anything,was the West line from Chicago to the UP. If UP didn't hand them interchange,CNW would have looked like the CRIP.

[@killerbee6310]

That and the Power River Basin coal.

[@johnschultz9023]

I'm curious as to the facts presented by the company. Are they blaming anything to cover up their poor management? This is suspicious since this was before contract negotiations.

[@killerbee6310]

Yes, this report was obviously to try to get everybody on their side

[@25mfd]

*I'm curious as to the facts presented by the company. Are they blaming anything to cover up their poor management?* as usual, these companies always look to blame the workers

[@spuwho]

CNW should have merged with KCS

[@killerbee6310]

Actually CNW fed a lot of the grain destined to the Gulf to the Katy when I was there in the early 80s.