Word: conrail
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Dates: during 1980-1989
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Such impressive figures bolster the White House argument that privatization could save taxpayers billions of dollars annually at the federal level. The Administration's most important initiative in that direction has been its proposal to sell Conrail, the Government-owned railroad formed from the remains of the bankrupt Penn Central, to Norfolk Southern, a private railroad, for $1.2 billion. Said President Reagan in a talk two weeks ago: "Government ownership is no way to run a railroad. When the private sector can deliver better service for less money than the public sector, as it can with Conrail, then the Government...
Transportation Secretary Elizabeth Dole set off howls of protest last week when she announced that the winner of a lengthy bidding battle to buy 85% of Conrail is Norfolk Southern railroad of Norfolk, Va. (The remaining 15% is owned by Conrail employees.) The $1.2 billion purchase would unite two of the three dominant eastern railroads and forge the largest U.S. freight line, with 34,000 miles of track. The third big railroad, CSX, which runs the Chessie and Seaboard lines, complained that the merger would create a giant that would flatten rivals like pennies on a rail. Some companies...
...comparison, Conrail has made a full-throttle recovery. Formed in 1976 from the bankrupt Penn Central and six other failed lines, the Consolidated Rail Corporation cost the Government about $7 billion before it began turning a profit in 1981. The line earned an estimated $500 million in 1984, up from $313 million in 1983. To reach that goal, Conrail cut its work force from 100,000 to 39,000, trimmed track mileage from 17,500 to 14,000 and turned over passenger lines to state authorities in New York, New Jersey, Connecticut and Pennsylvania. The company won major concessions from...
...Transportation Department received 15 bids for Conrail and last September narrowed the candidates to three: Norfolk Southern, the Alleghany Corp. of New York City and an investor group led by Hotelier J. Willard Marriott Jr. Two weeks ago, all 19 of Conrail's unions voted to recommend the Alleghany bid because the firm promised a more lucrative wage- and-job-protection package...
Opponents vow to fight the plan in Congress, which must approve the sale. Chairman Hays Watkins of rival CSX promises that the sale "will be resisted by every resource at our command and in every forum where the challenge can be brought." Conrail Chairman L. Stanley Crane, a retired president of Southern Railway who took over in 1981, opposes the sale to any of the bidders because he thinks the asking price is too low. He wants instead to sell the company through a public stock offering. Republican Senator John Heinz of Pennsylvania agrees with that plan because it would...