AH Challenge: Avert Conrail

I've never tossed one of these out, so I wanted to throw a challenge out there on a subject near and dear to my heart, railroading.

For background, Conrail was the result of a long string of disasters that hit the Northeast. One of the biggest ones was the Penn Central merger, which was probably too big and definitely included too many dysfunctional bits (internal infighting, the New Haven being added, etc.), but there were a host of other problems. So, with a PoD no earlier than 1945, try to keep the private railroad industry in the Northeast intact.

I'm going to put four conditions out there that need to be met:
-Conrail, or some quasi-public equivalent controlling most or all of the major railroads in the Northeast United States, is not to be formed. I say "most" because of the number of extremely close calls that happened with either Southern, Chessie, or another railroad picking up one or two sections of railroad. Likewise, simply splitting the public entity in two isn't an option, either. A bailout is allowable, but a full or nearly full takeover is not.
-Likewise, neither the liquidation of the railroad industry in the Northeast nor the complete consolidation of the industry in the region is an option. Liquidation would be a colossal failure (and nearly happened IRL), while a total merger (or near-total merger) seems exceedingly unrealistic under most circumstances. One or two "big mergers"? Sure, but nothing pulling everyone under one roof.
-The Interstate Commerce Commission can't simply be abolished nor can it suddenly "get religion" and decide to let the railroads do as they please (here, I invoke realism...the ICC was usually stepping in on behalf of politically powerful constituencies).
-In general, "acts of God" should generally be in line with IRL. If you want to get rid of Hurricane Agnes, something should take its place. Simply wiping out a bunch of natural catastrophes might keep everyone afloat, but...well, just doing that isn't fun, is it? I'll include at least some merger troubles in this...no railroad mergers ever seem to go perfectly well (the Conrail breakup was a mess for a week or two), though a total meltdown isn't terribly lucky, either (though it can happen).

Bankruptcies and mergers are allowable (and were a fact of life in the region at the time), and the liquidation of a smaller line (or two) would be as well. However, do be realistic...a 1946 merger of every line in the region isn't going to happen. In 1976, maybe, but not 1946.
 

Hoist40

Banned
To support a big rail network you need lots of customers and with US railroads its freight that pays for things so you need to keep industry using the railroads.

One thing would be to cancel the Saint Lawrence Seaway project which diverted a lot of tonnage from the NYC, PENN and other railroads which operated between the Great Lakes and the Eastern Seaboard.

Another would be to tone down the labor and tax demands on companies in the North East which might have slowed down their either moving out of the North East or going out of business.
 
Biggest butterfly to avoid here is Penn Central. That behemoth had no prayer of survival, the poor decisions by its management in 1968-70 were just the last in a very long string of mistakes made by the industry. The ICC was never going to allow a merger between the Pennsy or New York Central and a western railroad, and you'd need to consolidate to a considerable degree just to allow them to survive.

With a POD after 1946, you can make many butterflies. You could have the ICC neutered as the Staggers Act did, or you could have the railroads get new customers to sustain operations through various ways. The Pennsy was a pioneer in trailer on flatcar and container service (they called them Trail Van service, the name persisted through Conrail), so you could have that expand further. Hoist40's comment about union demands is also true, the days were ridiculously short and companies had to operate many lines that weren't profitable, but abandonment of most would need to be ICC approved and they were glacier-slow at that.

Saving some of the smaller lines is easy. Erie Lackawanna, for example, by 1970 was pretty much a line from New York to Chicago, with branches to Indianapolis and St. Louis that went into Conrail. Most of the former EL was abandoned, of course, though today part of it is the line Steamtown runs on out of Allentown, PA. The EL could focus on its long-distance runs from the NY area to Chicago and St. Louis, and if they did an agreement for traffic transfer to one of Western roads (The Santa Fe the most likely candidate), they could survive fairly easily.

Near-total consolidation is tough to get around. If you butterfly Penn Central, then the Pennsylvania is gonna have to complete with the EL and NYC across routes, and that would be a tall order. What might work there is for the New Haven to sink and Pennsylvania picks up some of its routes for a song, takes over the entire Northeast Corridor and focuses on moving loads, both of merchandise trains and of heavy commodities like coal. NYC could make it, but again, having both of them would mean Chessie has to be reduced to a minor player in the area and the EL has to barely stay afloat, any more than that and you saturate the market. The trucking industry and reduced industrial (particuarly coal and steel) traffic pretty much doomed Reading Lines, Lehigh Valley, Central of New Jersey and Boston and Maine - these will have to consolidate to some extent, no matter what, and most of the former CNJ and LV pretty much disappeared even under Conrail. When I wrote Transport America, I had President Eisenhower reward the railroads for their busting their arses in WWII by making sure they got considerable subsidies to go into improvements in their infrastructure - Penn Central was the poster child for letting this deteriorate to a terrifying level - and improvements to their operations. Even with that, with the advent of trucking systems and diesel locomotives, major financial difficulties for the railroads were inevitable.

With a 1946 POD, you could have the US choose to massively expand the coal-to-oil technology that they themselves had pioneered during WWII, which would be a major source of coal revenue for the railroads (you can't really move coal any other way).

Into the 1950s, Washington provides subsidies and money to improve the railroads' operations, which in the 1950s is mostly used to replace steam locomotives with diesel ones. The first trailer-on-flat car trains appear in the late 1950s. Falling passenger traffic is answered on several of the best passenger trains by continual service improvements and the marketing of the trains as a more comfortable way to get where you want to go rather than the faster airlines, a trend that is heavily added to after the advent of the Boeing 707 and Douglas DC-8 airliners in the late 1950s. As the last steam engines are cycled out of service in the late 1950s, rail car fleets begin to be rebuilt as well, with hundreds of thousands of cars built in the 1960s, and on main lines concrete ties, stainless steel rails, CTC and improved traffic management systems improve the speed and frequency of train operations.

The Virginian Railroad is bought by the N&W in 1959, the first of a long series of rail mergers. By now, New York Central, under Alfred Perlman, was jumping into the idea of railroads as an integrated transport business with both feet, and one of the NYC's good purchases was the purchase of the Schneider National trucking company in 1964. The company also sought mergers of its own, but ICC problems and the vast amounts of commuter traffic in the New York area hampered this. Regardless, the NYC saw a slow but steady rise in its traffic in the 1960s, and its deals with National, allowing for truck drivers to only have to take trucks to terminals, proved to be a highly successful enterprise. The NYC scored a big coup when they got approval in 1968 to build a tunnel under New York Harbor for its trains. The NYC also got help from an unlikely helper - Pan American World Airways, who starting in 1966 began helping the railroad improve its passenger service. While the NYC's high-end long-distance passenger trains, most notably the 20th Century Limited, New England States and the Motor City Challenger (the renamed Detroiter) all kept their fleet of passenger cars and equipment, the company, on the advice of Pan Am, began introducing the "Intercity Express" trains, using powerful CODAG propulsion systems to give the trains a top speed of over 125 mph, which began operating on shorter routes in 1968. These fast trains proved to be a major help to both domestically route-deficient Pan Am and to the passenger operations of the NYC.

By contrast, the Pennsylvania Railroad stuck to the idea that it was a railroad first and foremost, focusing more of its efforts on long distance heavy trains. Unlike the NYC and its extensive improvements to passenger operations, the PRR largely ignored that section of the business after about 1955, though it expanded its New York commuter operations in the 1960s. A boom in coal traffic helped with finances, but the PRR was starting to fail by the early 1970s, and the extensive damage done to their operations by Hurricane Agnes in 1972 put an end to their wishes to stay afloat. Losing several major freight contracts because of problems in shipping in 1967-71 added to their problems, and the PRR declared bankruptcy in September 1972, which caused the dominoes to crash. Reading Lines, Central of New Jersey, New Haven, Lehigh Valley and Boston and Maine followed within weeks. Erie Lackawanna and New York Central squeaked through, but the mighty Pennsy looked to be headed for collapse.

Into this fight came Perlman's "Green Team". Many of these people left the NYC for the Pennsylvania as the Pennsy was broke, and the new boss, former Santa Fe Chairman John Shedd Reed, came into the business in 1974. Reed proposed a huge, government-assisted program in which the Pennsylvania and its broke rivals would be consolidated into a major company, with stockholders in all the railroads being given stock in the new company, and the government's money being limited to loan guarantees, not grants. The message was simple - we need the money to survive now, but get us the resources we need and we'll fix this mess.

President Ford and the United States Congress figured this was the best way to save rail transport across a considerable portion of the railroad's territory, and agreed to plan, providing a massive $525 million in loan guarantees to the railroad, and proposing a substantial cut in the railroad's territory. The new firm would leave out big portions of the Readling Lines and Lehigh Valley, and nearly all of the Central Railroad of New Jersey. A second route along the Atlantic Coast would be assembled from the lines of the New Haven, allowing the Northeast Corridor north of Boston to be passenger and mail service only. It was a big and audacious plan, but it looked like it working would be likely, and the plan went into action in September 1975. The new Pennsylvania Railroad shed over half of its branch lines, but gained in its long-distance routes, and massively expanded their involvement in trucking business. The introduction of cheap, durable fiberglass skids to make ship in less than carload amounts added to the railroad's traffic, and expanded computer systems made that movement easier still. Many of the ideas were ripoffs of the work at the NYC, but as the 1970s went on, the Mighty Pennsy returned from the ashes, returning to profitability in 1979. Many of the lines not picked up the revitalized Pennsylvania were sold to smaller operators, who figured they could make them work themselves, while other lines wound up being rebuilt by several companies, including Canadian Pacific, Chessie System and Norfolk and Western, across the 1980s and into the 1990s.

Perlman had hardly retired from the New York Central in 1977 when he got the stunner of a lifetime. His protege and successor, Robert Flannery, announced in January 1980 that the NYC was in negotiations to buy out the Milwaukee Road, which had been economically failing for the best part of two decades. The real prize for this was the Milwaukee's Pacific Extension - a route which would fulfill the long-held dream of a transcontinental railroad which Perlman and his mentor, Robert Young, had dreamed of. The ICC, realizing that the Burlington Northern's dominance of the Northwest could not be broken any other way, approved the deal, and the company's stockholders approved that the NYC would purchase the Milwaukee, with the the Milwaukee's name being changed to the American Pacific Railway, and the two companies both using dark green and white paint schemes, with the NYC using mostly-green with white trim and lettering, and the American Pacific using the opposite paint.

Erie Lackawanna survived, wedged between the giants in the Pennsylvania and New York Central, but with the boom in heavy freight transport starting in the late 1970s, EL began effectively a feeder for the Western railroads, the Santa Fe in particular, while traffic moved both ways. The EL's survival was assured by its improvements in the 1970s, as they too went to heavy rail, concrete ties, heavy ballast and high-end signalling systems, allowing the EL's "express freight" trains to begin operating at speeds of 80 mph in 1981. The electrification built on the lines in the 1970s helped this.
 
It took me a few days to get back here (last night in Accounting was rather exhausting), but...TheMann, I am truly impressed. Your proposal also raises the interesting specter of whether some of the railroads might not have been able to, if not merge with trucking companies, at least work out agreements to coordinate with them.

The PanAm bit is also interesting, and I could see some slick management at PanAm attempting something like that to try and undermine their domestic rivals (particularly if it began to look like any of them were looking to make a serious play at international competition). Obviously, they couldn't invest directly under the existing regime of the time...but offering direct connections (including short "bus hops" in New York, Boston, Washington, etc.) would seem to have been allowable even under the ICC's misrule (the railroads were allowed to do some short bus operations within a major city...bus pickups throughout New York and San Francisco heading to Newark and Oakland, respectively, were the norm for a very long time).

One thing I'm impressed by in particular: You also averted Amtrak in the process of this. Granted, the proximate cause of Amtrak's formation was the Penn Central disaster...but at the same time, enough of the other roads were doing just well enough on their passenger operations to make joining Amtrak an open question (basically, as I understand it, the big operating holes tended to be in "flyover country" on territory run by UP, SP, etc...Seaboard, Southern, and Santa Fe all dithered considerably on joining, while D&H more or less joined on "their terms" and had their paint scheme kept for a train or two for quite some time).
 
It took me a few days to get back here (last night in Accounting was rather exhausting), but...TheMann, I am truly impressed. Your proposal also raises the interesting specter of whether some of the railroads might not have been able to, if not merge with trucking companies, at least work out agreements to coordinate with them.

That came to be in the 1980s in any case. One of the big reasons rail freight traffic skyrocketed between 1980 and 2000 was because the trucking companies found that high fuel prices, union driver wages and the shortage of long-haul drivers made moving freight onto the rails very profitable. Here, I just had it begin that much sooner. If you see any modern intermodal train of today, you will see a lot of logos for both ocean shipping and trucking companies. That's not coincidence.

The PanAm bit is also interesting, and I could see some slick management at PanAm attempting something like that to try and undermine their domestic rivals (particularly if it began to look like any of them were looking to make a serious play at international competition).

The Pan Am bit was not so much to undermine rivals as PA taking a backdoor route to having a half-decent domestic route network. Pan Am was always horribly deficient in that regard, which is why they began the series of expansions and buyouts that they went through in the 1980s. Until 1978, Pan Am had severe difficulties getting a US network, so my figuring was that if NYC's fast passenger trains could provide a reasonable alternative, then that might be a way of improving matters. Here, Perlman's "Green Team" got the job done, and Perlman's experiment with the M-497 amounted to far more than a publicity stunt. Overall result, NYC's rails and rail engineering combined with Pan Am's customer service knowledge equals a high-class, reasonably-successful program in the 1970s.

One thing I'm impressed by in particular: You also averted Amtrak in the process of this. Granted, the proximate cause of Amtrak's formation was the Penn Central disaster...but at the same time, enough of the other roads were doing just well enough on their passenger operations to make joining Amtrak an open question (basically, as I understand it, the big operating holes tended to be in "flyover country" on territory run by UP, SP, etc...Seaboard, Southern, and Santa Fe all dithered considerably on joining, while D&H more or less joined on "their terms" and had their paint scheme kept for a train or two for quite some time).

I wouldn't say I avoided Amtrak. I think Amtrak is nearly inevitable, but in this case I had the NYC's ideas about high-class liners on rails catch hold, and the idea becomes profitable in the 1970s, with the most famous passenger trains from the other railroads (Super Chief, City of San Francisco/City of Los Angeles, Southern Crescent, Empire Builder, Admiral, Sunset Limited, Coast Starlight) eventually all becoming that way in the 1980s (more as a show of prestige than profitability, though most more than break even) and regional services becoming common. Amtrak here is not a direct operator so much as an organizer, co-ordinating passenger train operations between the railroads and acting as their unofficial supporter in Washington. Metroliners or trains like them are by 2012 a very regular sight in the Midwest, with electrified trains in some places and CODOG-powered units in others. True High-Speed Rail (as in 150 mph+) has existed in the Northeast since 1997 (The old Northeast Corridor route has been passenger-only since 1985) and the Colonial and Federal Express are now run as fast passenger trains with better amenities and 125 mph speeds. It also exists in Texas (The Texas TGV became operational in 2000 - it's biggest shareholder is Southern Pacific) and is under construction in California.

It should also be pointed out that in this world, short-haul airliners have a much more difficult time with customers - why take a cramped Southwest 737 when you could take a more comfortable Regional passenger train, when they don't finish that far apart? - and the smart ones have answered this by continual service improvements. The average long-distance train is expensive than an airline ticket for the same distance, and of course it takes longer, but by 2012 the luxury trains are all double-deckers, with many glass-roofed cars. Every passenger has at worst a two-bed room (most have their own) with a shower, sink and toilet. All of the trains have on-board internet access and power, on-demand entertainment at all seats, excellent food service (Santa Fe's Super Chief tops this list - you can order a Porterhouse steak, smoked salmon, pan-roasted duck breast or Lam T-Bones? You can....) and much greater comfort, and that's before one mentions the view.
 
Point taken on the intermodals...I know that CSX's relative prosperity has been due to heavy intermodal work.

As to the Amtrak bit: Though the ICC would invariably have opposed it, I've long wondered why some of the railroads (particularly out west) didn't try to merge their passenger divisions in some manner, sharing resources (such as facilities in major, jointly-served cities) to cut some of their losses. Particularly where endpoints were the same (Chicago-Los Angeles, for example), I've always been a bit surprised that more aggressive moves weren't made to merge those services somehow (not unlike the railroad-owned Pullman company...the sleeper-operating business, that is).

In all fairness, Amtrak seems to be clawing their way back in the direction of luxury service IRL (I highly recommend the steak, regardless of train, and the crabcakes on the Capitol Limited are excellent...though the plastic bowl-sized salad cannot help but look awkwardly small in the new china salad bowls)...but I'll shut up before I start fawning here. Suffice it to say that Amtrak's current management finally seems to have managed to "get the picture" on needing solid OBS once and for all lately.

In essence, though, I'd honestly describe your world as increasingly being ours...simply lacking a very stupid detour over the last 40-50 years, what with all the headaches that the airlines are running into and the associated costs there (and the trend towards improving passenger service availability). Of course, there are exceptions (the Texas TGV, CAHSR), but overall the trend is towards some degree of re-convergence, at least on the passenger side of things (you did pull some irrevocable-but-beautiful merger changes, I must say).
 
Point taken on the intermodals...I know that CSX's relative prosperity has been due to heavy intermodal work.

That's part of it, but CSX also benefits from the fact that are the dominant player along most of the Atlantic Coast lines, and have big advantages by being the major player in several major ports, Mobile and Miami being two of the big ones. CSX also got the half of Conrail that is better for intermodal traffic, along the former NYC Water Level Route east of Cleveland, the NYC's Big Four line (Cleveland-Indianapolis) and the PRR's Panhandle Route (Indianapolis-St. Louis). This route is very good and very efficient for the servicing of port facilities in New York and Boston. NS wanted a better route to Chicago and greater trackage in the coal fields, and they got that, at the expense of Conrail's intermodal operations, which primarily ran on the Water Level Route unless they were headed to Philadelphia, Baltimore or Washington.

As to the Amtrak bit: Though the ICC would invariably have opposed it, I've long wondered why some of the railroads (particularly out west) didn't try to merge their passenger divisions in some manner, sharing resources (such as facilities in major, jointly-served cities) to cut some of their losses. Particularly where endpoints were the same (Chicago-Los Angeles, for example), I've always been a bit surprised that more aggressive moves weren't made to merge those services somehow (not unlike the railroad-owned Pullman company...the sleeper-operating business, that is).

I'm not sure many of the railways would have been fairly keen on the idea either, though your point is valid. It might have helped to run combined services, but then you have the problems of whose track do they run on, whose rolling stock, what timetables do they run on, what priority do these passenger trains get (Before the BNSF Merger, Santa Fe boss Robert Krebs was real mean towards BN for not getting his trains to their destinations on BN rails on time) and many other factors, including union agreements and service protocols. It's a lot of hassle, and Amtrak had the ability to start with a clean slate. That makes matters easier.

In all fairness, Amtrak seems to be clawing their way back in the direction of luxury service IRL (I highly recommend the steak, regardless of train, and the crabcakes on the Capitol Limited are excellent...though the plastic bowl-sized salad cannot help but look awkwardly small in the new china salad bowls)...but I'll shut up before I start fawning here. Suffice it to say that Amtrak's current management finally seems to have managed to "get the picture" on needing solid OBS once and for all lately.

As a one-time regular rider of the Coast Starlight between Los Angeles and Seattle and having also ridden the Acela Express, Empire Builder and Pacific Surfliner, Amtrak CAN do a very good job of passenger service, they just need to actually do it. Amtrak's management for a long time was focused on the idea that they had to be operationally self-sufficient. That ended when David Gunn was calling the shots (In my Transport America TL, which covers much of this, Gunn takes over Amtrak from Graham Claytor Jr. in 1993, after Claytor's highly-successful time as Amtrak's boss), because Gunn was quite happy to bash heads with Congress to get the point across that no form of transport in America has no subsidies, and Amtrak shouldn't be expected to have none either, a point that Gunn's successors hammered home repeatedly as well.

In essence, though, I'd honestly describe your world as increasingly being ours...simply lacking a very stupid detour over the last 40-50 years, what with all the headaches that the airlines are running into and the associated costs there (and the trend towards improving passenger service availability). Of course, there are exceptions (the Texas TGV, CAHSR), but overall the trend is towards some degree of re-convergence, at least on the passenger side of things (you did pull some irrevocable-but-beautiful merger changes, I must say).

I wouldn't quite say that, but the point is valid. In my Transport America TL, I didn't avoid Conrail (but kept the NYC and EL out of it), and the rail mergers halted after Santa Fe-Southern Pacific failed. Thus, no Norfolk Southern, CSX Transportation or BNSF, NS is still made up of Norfolk and Western and Southern Railway, CSX is still Seaboard Coast Line, Louisville and Nashville and Chessie System and BNSF is still Burlington Northern and Atchison, Topeka and Santa Fe. I'd say the same would be true here, though in addition here Big Blue never comes, instead replaced by the Pennsy's Brunswick Green and Tuscan Red, though the Pennsy here I am envisioning having a number of locomotives painted in a heritage paint scheme inspired by its successor railroads - light blue for Boston and Maine, dark blue for CNJ, yellow and green for Reading Lines, dark red and white for the Lehigh Valley, same as what Union Pacific did with its heritage units. In OTL, there are large portions of the country where mergers and consolidations have all but eliminated rail competition, but that is not the case in Transport America and almost certainly would not be the case here.
 
Here's the link:

https://www.alternatehistory.com/discussion/showthread.php?t=168298

I found it enjoyable myself, but his lack of focus on the public transit side and the ignoring of the 1980's era California HSR plans have kind of dimmed it's perception to me.

Truthfully FDW, I could do the public transit stuff for Toronto (where I live now), Seattle (where I lived then) and maybe Los Angeles, but I wouldn't know where even to begin outside of that. And I didn't know of the 1980s California HSR plans when I wrote that.
 

FDW

Banned
Truthfully FDW, I could do the public transit stuff for Toronto (where I live now), Seattle (where I lived then) and maybe Los Angeles, but I wouldn't know where even to begin outside of that. And I didn't know of the 1980s California HSR plans when I wrote that.

I could point you to some potential resources on the Public Transit front.
 
Hmm...another question did come to mind in the vein of this. In the early 1960s, a different merger pattern was mooted than what historically occurred. What do you think the result would have been if C&O-B&O (which became Chessie, and obviously eventually CSX) had merged with the NYC and the Pennsy had merged with Norfolk and Western instead of those two merging with one another? Would that simply have bought time (with the coal lines propping up two "zombie railroads", perhaps until the 1980s when the collapse in oil prices combined with weaker or no deregulation would have brought the roof in), or is there a decent chance that buying some time might have gotten the eastern roads through the tough spots and let them stagger on without an outright collapse for a long time?
 
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