Monday, March 12, 2007

Old Ribbons

As the 1960s turned into the 1970s, several things became clear. First, like the Rock Island (another large Granger road), the Milwaukee Road had been attempting to make itself more attractive to merger partners by maximizing short term profits. This translated into reduced money spent on such things as track, freight cars, and locomotives. It was a plan that, while slightly underhanded, seemed to make good business sense for a management that was becoming increasingly tired of railroading as an independent company. Simply take some of the money that would have gone into infrastructure and apply it to the profit statement instead. Within a couple of years, a different railroad would buy the 'very profitable' Milwaukee Road and none would be the wiser.

The second thing that became clear was that there existed a slight problem with this strategy for, also like the Rock Island, no merger partner came forward. So after many years of neglected maintenance, derailments and travel times soared across the west. What had been a strategy for merger had become a very big snare. The business increase across Lines West during the 1970s only served to magnify the problem, beating the few remaining years out of the tracks even more quickly. A rebuild was possible, with independent analysts showing that the only way for the Road to be profitable was through an extensive upgrade to its western extension (interestingly enough, counter to what management was claiming at the time). But the stomach to make that kind of investment had long evaporated in the headquarters building, and the bankruptcy judge agreed.

Today, little actual Milwaukee rail exists across the west. But in Palouse, Washington, a grim reminder of those final days still exists on the Milwaukee's wholly owned subsidiary, the WI&M. Although purchased and upgraded by BN after the Milwaukee's implosion, the line through town still shows some of the old effects of a failed merger strategy and failed upper management.

No comments: