Welcome to the Akron Railroad Club Blog

March 2, 2009
The photo line is ready to capture an eastbound Norfolk Southern manifest freight with BNSF motive power during the July 2012 Akron Railroad Club picnic.

The photo line is ready to capture an eastbound Norfolk Southern manifest freight with BNSF motive power during the July 2012 Akron Railroad Club picnic in Bedford.

The Akron Railroad Club has about 80 members who meet monthly in Akron, Ohio, to share their passion for railroad operations and history.  On this blog you will find information about our meetings, activities, how to join us, and news about railroads and railroad oriented organizations.

ARRC logoOn the feature pages you will find information about popular Ohio railfan hotspots within a few hours drive from Akron, stories about railfan outings, trip reports and information about railroad operations and radio frequencies.

Many features are amply illustrated with photographs.  Take a look around and enjoy yourself. There is always something new to read so come back often.

Better yet, come to one of our monthly meetings or join us at one of our many events. We look forward to meeting you and joining us. Dues are $16 yearly and include a subscription to the monthly newsletter, the Bulletin. We meet on the fourth Friday of the month at New Horizons Christian Church, 290 Darrow Road in Akron. Visitors are always welcome at our meetings.

Next Meeting: March 24: Program by Craig Sanders.

Next Activity: February 25: Pizza Party and Member’s Night

Railroading as it Once Was: Another Form of Type of Blue Locomotive in the 1970s Northeast

February 22, 2017

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You’re looking at an October 1978 view of the sanding facility at Mechanicville, New York. Boston & Maine No. 1734 rests under this wooden structure that had to make the workers nervous to climb on. This would be a great modelling project for someone into that aspect of the hobby. Details abound including that MU hose hung on the side of the building and the coating of sand dust on the perch above the unit.

Article and Photograph by Roger Durfee

AAO Still Trying to Move the Passenger Needle

February 22, 2017

A message showed up in my email inbox the other day from All Aboard Ohio, a passenger advocacy group, that has released a report titled, “Ohio Passenger Rail Assessment of Needs.”

The report was timed to coincide with the Ohio legislature getting to work in hammering out the state’s budget for the next two years.

ohioAAO is trying to push legislators to “begin planning, constructing or completing $23.6 million worth of passenger rail improvements” over the next two years.

Much of that work involves upgrading stations served by the state’s three Amtrak trains, the Capitol Limited, Lake Shore Limited and Cardinal.

Some of the funding would also be used to plan potential future intercity rail routes, including a proposed Chicago-Fort Wayne-Columbus route that has never seen Amtrak service.

As AAO sees it, more than $80 million in state funding could be available under state law to be used for passenger rail development without paying for the operating costs of any actual trains.

An AAO news release about the report was written in the typical optimistic tone of rail passenger advocates and sought to put the best possible face on intercity rail.

It focused on such facts as how Amtrak covers 94 percent of its costs through revenues and set a ridership record in fiscal year 2016.

It also reiterated a tactic that AAO has used in the past of trying to shame Ohio policy makers into taking action by noting how neighboring states and the Canadian province of Ontario are investing millions in the development of intercity routes and services while Ohio spends zilch.

The state capital of Columbus is the largest metropolitan area in the western hemisphere without passenger rail service.

Some folks in Phoenix might quibble with that although the Valley of the Sun does have a light rail system that is seeking to expand.

Rail passenger advocates tend to be an optimistic lot. They have to be. If they acknowledged the long and difficult road ahead they might throw up their hands in frustration. AAO is no exception.

“We look forward to continuing our dialogue with Ohio’s policymakers in achieving realistic, near-term improvements to our state’s transportation system,” said AAO Executive Director Ken Prendergast. “We urge Ohioans to contact their state lawmakers in Columbus today and inform them with a short, polite message that they want better passenger rail service in Ohio.”

AAO has around 500 members and even if all of them contacted their legislators it is doubtful that it would have much effect on what the legislature is likely to do in terms of supporting intercity passenger rail.

Ohio has never spent a dime on funding intercity rail service, unlike neighboring Indiana, Michigan and Pennsylvania.

It received a federal grant to help develop the Cleveland-Columbus-Cincinnati corridor, but Gov. John Kasich killed the project shortly after winning election in 2010 and the federal government took back the grant and reallocated it elsewhere.

Ohio’s apathy, indifference or hostility – choose which word you think fits best – toward intercity rail development is not likely to change this year.

Kasich is still governor and is unlikely to change his views toward intercity rail service. Nor is the current legislature likely to be any more open to rail than is the governor. They are not going to be shamed or moved to action.

There may be some small victories, such as state funding of existing station improvements, but little to nothing else.

So AAO works to develop support for a rail a little at a time. Like I said, it’s going to be a long struggle.

CSX CEO Ward to Retire on May 31

February 21, 2017

On Tuesday CSX Corp. announced that Chairman and Chief Executive Michael Ward and President Clarence Gooden will retire, effective May 31.

Fredrik Eliasson, a 22-year veteran of the company and current Chief Sales and Marketing

Michael Ward

Michael Ward

Officer, has been appointed as President effective Feb. 15.

The Jacksonville, Fla.-based railroad in a statement described the changes as an “orderly transition” of senior leadership, adding it is continuing discussions with Hunter Harrison and activist investor Mantle Ridge regarding Harrison becoming CEO at CSX.

CSX said that the elevation of Eliasson to the president’s post was not intended to affect the discussions with Harrison of Mantle Ridge, which owns less than 5 percent of CSX stock.

“On behalf of CSX’s Board of Directors, I want to thank Michael and Clarence for their many years of dedicated service and contributions to our company,” said Edward J. Kelly III, Presiding Director. “Michael has helped build CSX into one of the nation’s leading transportation and logistics companies, and Clarence has similarly provided valuable leadership across CSX’s sales, marketing and operations teams. We wish both the best in their retirements.”

Eliasson, 46, will maintain his current responsibilities in his new position. He has served as executive vice president and Chief Sales and Marketing Officer since September 2015, and prior to that was Chief Financial Officer from 2012-15. He joined CSX in 1995.

In an other development, Ward said today that 1,000 CSX management positions would be eliminated in a cost cutting move.

The job cuts will affect positions at CSX headquarters in Jacksonville, Florida, as well as various field offices.

Massively Overshadowed

February 21, 2017

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One in a series of posts of photographs that I made last summer.

The driver of this Norfolk Southern track car had authority on the Sandusky District as far as the mini plant in Bellevue.

That wasn’t the driver’s final destination. As I recall, the track car needed to get into the yard, but the dispatcher had traffic to run so the truck sat and sat and sat.

One of those trains was an outbound move with a pair of Union Pacific units in the motive power consist.

Those UP engines also overshadowed an NS high-nose GP38-2 that was trailing them.

I wondered what it would be like to be sitting behind the wheel of a track car and seeing this massive train coming at you.

It must have made for an interesting site provided, of course, that it was on another track and stayed on that track.

Article and Photographs by Craig Sanders

We’re Having a Pizza Party on Feb. 25

February 20, 2017

The Akron Railroad Club’s February meeting will be the annual member’s night and pizza party. It will be held on Saturday, Feb. 25 in the social hall of the New Horizons Christian Church.

ARRC logoThere will be a $5 cover charge and doors will open at 5:30 p.m. The pizza will be furnished by Marcos with serving to begin at 6 p.m.

Sometime after 6:30 p.m. we’ll start the member presentations. There is no theme other than it should be railroad related.

We will have the club’s equipment to present slides, digital images or video. All of the club’s audio visual equipment will be available for use as needed.

We chose February for the member’s night because of a schedule conflict at the church for Feb. 24, the normal night of our February meeting.

The church wasn’t available that night because of a large youth group program. We could have Feb. 17, but the social hall wasn’t available on that date because it would be set up for a spaghetti supper the next day. We could meet that night but in a Sunday School room that could get crowded.

The third option was Saturday night on Feb. 25, which the officers elected to make the annual member’s night.

In the February eBulletin: Super Memories of a Super Bowl Sunday Winter Outing in Lake County

February 20, 2017

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It was one of those railfan outings that we are still talking about years later

On the day of the 2014 Super Bowl, Ed Ribinsksas, Marty Surdyk and I ventured out to railfan in Lake County in what turned out to be some of the most spectacular winter conditions we’ve ever encountered. Rain had changed to snow and covered everything in a blanket of white that lasted throughout the day.

A story about that outing and a gallery of photographs is the cover story in the February 2017 issue of the Akron Railroad Club eBulletin that is being distributed this week.

To obtain a copy of the issue or to subscribe, send an email to csanders429@aol.com

Individual copies and a subscription to the eBulletin are free. The February issue also has the latest news from the railroad industry over the past month.

Numbers, Numbers. How Much is Hunter Worth?

February 20, 2017

When E. Hunter Harrison retired early from Canadian Pacific, news accounts noted that he left millions of dollars on the table in exchange for a limited waiver of a non-compete clause so he could pursue the CSX CEO job.

As it turned out, Harrison did no such thing.

On TransportationThe hedge fund Mantle Ridge agreed to pay Harrison the money he gave up at CP.

Mantle Ridge in turn wants CSX to reimburse it for the cash it guaranteed Harrison for walking away early from CP.

CSX claims that Harrison is seeking a four-year contract worth $300 million. That $75 million a year would make him not just the highest paid North American Class 1 railroad executive but also place him among the highest-paid CEOs in America.

By comparison, the man Harrison wants to replace, Michael Ward, earned $2.9 million in 2015. Another retired Class 1 CEO, Charles “Wick” Moorman, who agreed to take Amtrak’s top job for $1 a year, although he is also eligible for performance-based bonuses of up to $500,000 a year.

But Mantle Ridge counters that Harrison’s compensation package would actually be worth $200 million of which $120 million are stock options.

Such is life in the rare air of the corporate suite where eye-popping salaries are justified by saying a CEO brings a “unique skill set” to the job.

Executive compensation experts interviewed by Trains magazine said Harrison’s pay demands are at the high end of the scale, but not unreasonable by CEO pay standards.

Once the news broke that Harrison was seeking the top CSX job, the value of CSX stock jumped $10.4 billion, an increase of 30 percent.

Ben Branch, a finance professor at the Isenberg School of Management at the University of Massachusetts, told Trains that CSX stockholders might think Harrison has a “dramatic plan” for improving the company.

“It’s rare,” Branch said. “You don’t have many situations where a CEO almost single-handedly is expected to deliver dramatic improvement.”

Jason Shiel, a managing director of finance firm Cowen and Company, told Railway Age the pay demanded by Harrison is a negotiating point and he is likely to receive less, although not necessarily much less.

Harrison is known for his scheduled precision railroading operating philosophy, which some railroad industry analysts say is similar to what CSX practices now.

Ultimately, some think Harrison’s long game is to engineer a merger that creates North America’s first transcontinental railroad. It is an idea he been peddling for years and failed to pull off last year when he proposed a merger between CP and Norfolk Southern.

For us mere mortals whose primary connection with CSX is watching its trains pass by, all of this talk about eight- and nine-figure executive compensation is nothing more than a parlor game.

The numbers baffle ordinary people who have no chance in their lifetime of ever earning a salary exceeding five figures a year. Most of us can’t fathom how you become a CEO of a Fortune 500 company.

For most CSX employees, having Harrison rather than Ward at the top will make little difference.

They will continue doing what they have been doing even if there may be some changes in how they do it.

Yet it is likely that some may find themselves victims of Harrison’s expected cost cutting.

In the eyes of Harrison and other high-ranking and well-paid railroad executives, labor costs are just another number to be reduced in order to please Wall Street.

How those reductions affect individual CSX employees financially and emotionally won’t be a subject of discussion at the special CSX board meeting. It never is.

All they talk about are numbers and for most of us that is all Harrison’s pay demands are.

What We’ve Lost over Time on the EL in Kent

February 18, 2017

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Sometimes when a railroad becomes a fallen flag, much of the rails and other infrastructure disappear and only memories are left. Compare this view of the Erie Lackawanna trackage in Kent in the late 1960s with what the Wheeling & Lake Erie operates now. We are looking toward West Summit Street and into downtown Kent. What a difference almost half a century makes.

Article and Photograph by Bob Farkas

 

Mantle Ridge Disputes CSX News Release

February 18, 2017

Hedge fund Mantle Ridge took issue with some facts contained in a CSX news release issued earlier this week on the subject of E. Hunter Harrison becoming the railroad’s CEO.

CSX logo 3Mantle Ridge head Paul Hilal said he wrote to the CSX Board of Directors to take issue with the news release, in particular the size of the compensation package for Harrison and Hilal’s demands for governance changes for the CSX board.

“We owe it to the shareholders to get a deal done promptly. Let’s do it,” Hilal wrote. “If you are willing, we are glad to meet in person and hammer this out this weekend, hopefully delivering good news to the shareholders early next week.”

In the meantime, Harrison told the Wall Street Journal that he was frustrated with what he described as “chest pounding” between his investment partner and CSX, which has resulted in a stalemate in the negotiations for him take over as CSX as its CEO.

The newspaper reported that CSX had offered the CEO post to Harrison, but that Hilal, a principle at Mantle Ridge, has refused to give in on compensation and governance demands. Hilal, who is representing Harrison, has conducted most of the discussions with CSX.

Mantle Ridge holds less than 5 percent of CSX stock but wants to name six directors to the railroad’s board of directors and reduce the number of directors to 12,

In the news release, CSX said it is reluctant to allow a shareholder with such a small share of its stock to dictate the composition of its board. CSX also has described the demands to give Harrison a $300 million compensation package as “extraordinary in scope.”

The Journal said that during a recent meeting with Mantle Ridge, some CSX shareholders objected to the number of seats on the board that Mantle Ridge wants.

Hilal reportedly said during the meeting he needs to control six seats so that Harrison “has control and can execute his plan.”

CSX reportedly is objecting to paying Harrison the $89 million he gave up by leaving early as Canadian Pacific’s CEO in return for receiving a limited waiver of a non-complete clause.

Hilal contends that the compensation deal that Mantle Ridge is seeking from CSX is $200 million and includes $120 million of stock options, about half of which are tied to “very real” performance measures.

Another sticking point is the 72-year-old Harrison’s refusal to agree to have a physical exam by an independent physician.

Harrison told the Journal he was willing to negotiate his pay with the CSX board,

In his letter, Hilal contended that Harrison wants $32 million per year over four years – or $128 million – of which $20 million per year is performance-based.

“His package is worth very little unless he performs spectacularly,” Hilal wrote. As for the changes on the CSX board, Hilal said he is only seeking a seat for himself.

Harrison would occupy another seat along with four other independent directors who would be agreed upon by CSX and Mantle Ridge

“Why are we asking that new directors be added? As we’ve discussed, precision scheduled railroading requires dramatic operational and cultural change,” Hilal wrote. “Change like that starts at the top, with significant new blood on the board not wed to the old ways or legacy decisions and with no ties to any previous strategy or anyone.”

The Andersons Rail Business Did Well in 2016

February 18, 2017

The Andersons reported this week that its rail business led its 2016 revenue even though on the whole the Maumee, Ohio, company said it was disappointed in its results overall.

OhioDuring 2016, The Andersons said its rail business earned $32.4 million in pretax revenues while the ethanol business was second, generating about $24.7 million in revenue.

The company said that it sold underperforming facilities and closed some grain facilities.

The rail operations include locomotive and railcar sales and leasing as well as rolling stock repairs.

Lease income fell to $2.9 million in 2016 from $4.5 million in 2015. However, The Andersons said revenue from car sales and the repair business rose.

In 2016, the company reported $4.7 million in car sales compared to less than $1 million in 2015. The railcar repair business generated $2.1 million last year, compared to about $1.5 million in 2015.