Word: conrail
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Dates: during 1980-1989
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...conceding that "it's time now for me to go," intends to retire, and Schmidt will run the new corporation from Chicago. An ambitious executive who grew up in a blighted Chicago neighborhood and once sold peanuts, baby pictures and encyclopedias, Schmidt is considering an effort to buy Conrail, the big Government-owned Eastern system, and link it to the Southern Pacific and the Santa Fe. That grand plan would put Schmidt in charge of the largest U.S. railroad and the first transcontinental line owned by a single company. -By Charles P. Alexander. Reported by Lee Griggs/Chicago and Russell...
Slowly, however, a transformation has taken place. The Government spent nearly $3 billion to computerize rail yards, upgrade facilities and repair creaky tracks. With the passage of the Northeast Rail Service Act in August 1981, Conrail was permitted to halt traffic on 2,600 miles of uneconomical track, about 15% of its total route network. Some 22,000 freight-service employees, including 5,000 who had job or severance guarantees, were cut from the payroll at a cost of more than $130 million. Last January, Conrail handed its unprofitable commuter service in New York, New Jersey, Connecticut and Pennsylvania over...
While it was getting leaner, Conrail was also getting stronger. With deregulation, it has been able to cut prices and grab business from other carriers. Last year, for example, it hauled 875 carloads of water-purification chemicals that used to travel by truck from a Du Pont plant in Delaware. Conrail also snagged a fuel-hauling contract from Lake Ontario barge operators and moved 6,583 carloads of fuel oil for the Niagara Mohawk Power Corp...
Much of the credit for Conrail's resurgence goes to Chairman Crane, 67, who took over the line in 1981 after spending nearly his entire career at the Southern Railway, the last three years as president. A short, wiry expert in operations, Crane charged up employees with a sense of purpose and firmly established company goals...
Thanks to Conrail's impressive recovery, it is expected to show a profit of about $1 billion over the next five years. One interested buyer is a group of the railroad's employees, who say they plan to make a bid by June 14. But whatever price the Government gets for Conrail, it will not match the $7 billion investment...