WI: Southern Pacific merged with Santa Fe in 1986?

In the mid-1980s, the ATSF and Southern Pacific (two major US railroads) very nearly merged together to form a single entity (which would have been known as the SPSF, much like the later BNSF). They were, for a time, managed by the same corporate body, and even began to adopt identical paint schemes. However, the ICC (in charge of regulating American railroads) denied their application to merge, and they ended up going their separate ways. Both ended up merging into other, larger railroads (the BNSF and the Union Pacific), anyways. So...as this is an AH board, and not a RH one...what if that hadn't happened, and they had ended up merging? What would it have taken for that to happen, and what would have been the results?
 
It would have been a mess. ATSF and SP were rivals across nearly all of Santa Fe's trackage and at least two-third of Southern Pacific's. It would have done nothing except for ruin competition for rail traffic in California, Arizona, New Mexico, Texas, Oklahoma, Missouri and Kansas. The merger between them would likely end up being seen as a mistake soon, too - soon after the merger was denied, freight traffic began to rebuild on the Western Railroads, and while ATSF was in good shape to handle this, Southern Pacific was nearly bankrupt after the merger, and that was why they went broke and got sucked into the Yellow Borg (aka Union Pacific).

If you're looking for mergers for these, the best bets for both would be either struggling eastern railroads (though by 1986 you have CSX, Norfolk Southern and Conrail, which kinda kills that idea) or a Midwestern-biased railroad - but you'd need a POD much earlier than 1986 for that. You'd be running out of options by the middle of the 1970s.
 
It would have been a mess. ATSF and SP were rivals across nearly all of Santa Fe's trackage and at least two-third of Southern Pacific's. It would have done nothing except for ruin competition for rail traffic in California, Arizona, New Mexico, Texas, Oklahoma, Missouri and Kansas. The merger between them would likely end up being seen as a mistake soon, too - soon after the merger was denied, freight traffic began to rebuild on the Western Railroads, and while ATSF was in good shape to handle this, Southern Pacific was nearly bankrupt after the merger, and that was why they went broke and got sucked into the Yellow Borg (aka Union Pacific).

If you're looking for mergers for these, the best bets for both would be either struggling eastern railroads (though by 1986 you have CSX, Norfolk Southern and Conrail, which kinda kills that idea) or a Midwestern-biased railroad - but you'd need a POD much earlier than 1986 for that. You'd be running out of options by the middle of the 1970s.

Well, I'm glad someone replied, anyways. It's not like I'm married to the '80s, you know--I was just reading Wikipedia and got reminded about this thing and decided to ask about it (since, well, I don't know much about rail history).

So, are there any other interesting merger options, in the '60s or '70s period? Not necessarily involving the ATSF or SP, either?
 
Well, I'm glad someone replied, anyways. It's not like I'm married to the '80s, you know--I was just reading Wikipedia and got reminded about this thing and decided to ask about it (since, well, I don't know much about rail history).

So, are there any other interesting merger options, in the '60s or '70s period? Not necessarily involving the ATSF or SP, either?

Oh, this is something I thought about a lot when I was doing research for my Transport America TL. Southern Pacific was one of the largest of the railroads up until the 1960s. Unlike Santa Fe, Southern Pacific had a lot of branches and side lines and extra routes, many of which were rended redundant after WWII and with the growth of the Interstate Highway system and subsequent loss of a lot of rail freight traffic to trucks. Santa Fe, being effectively a single line from Chicago to Los Angeles with branches into Texas and to San Francisco, didn't have to go through all of the regulatory hoops that line closures entailed until the Staggers Act.

As for interesting merger options, my favorite plan of the Transport America bit was an alliance between four small fish in the big pond in the end of the 1970s, those being the Western Pacific, Denver and Rio Grande Western, Chicago, Rock Island and Pacific and Erie Lackawanna. IOTL, Rock Island went belly-up in 1980, Rio Grande got swallowed by Southern Pacific, Western Pacific became part of Union Pacific and Erie Lackawanna became part of Conrail. However, these four lines between them pretty much form an end-to-end line from New York to San Francisco, and as traffic growth in the end of the 1970s and into the 1980s was based on long-distance movements, containers and bulk commodities, I made the four lines forge agreements that would allow them to interchange rolling stock and set up route and traffic schedules that would allow them to more easily pass traffic to and from each other.

SP's best bet at long-term survival IMO if you butterfly away the third round of rail mergers (those being from about 1980 onward) would be to focus on the southern markets. UP and the above alliance would own the route across the Sierra Nevada and out of San Francisco, while BN controls the northwest and northern plains. Best bet for this is for SP to focus on its southern routes, particularly running from Los Angeles to Houston, Dallas, New Orelans and Memphis, where they pass off to the eastern railroads, as well as the lines to Chicago and St. Louis. Santa Fe is in pretty good shape all around, and if you butterfly away their merger with Burlington Northern (which in a lot of regards is fairly smart), they will still make a good living hauling between California, Texas and Chicago.
 
As for interesting merger options, my favorite plan of the Transport America bit was an alliance between four small fish in the big pond in the end of the 1970s, those being the Western Pacific, Denver and Rio Grande Western, Chicago, Rock Island and Pacific and Erie Lackawanna. IOTL, Rock Island went belly-up in 1980, Rio Grande got swallowed by Southern Pacific, Western Pacific became part of Union Pacific and Erie Lackawanna became part of Conrail. However, these four lines between them pretty much form an end-to-end line from New York to San Francisco, and as traffic growth in the end of the 1970s and into the 1980s was based on long-distance movements, containers and bulk commodities, I made the four lines forge agreements that would allow them to interchange rolling stock and set up route and traffic schedules that would allow them to more easily pass traffic to and from each other.

That would be interesting; OTL, of course, we have a pretty strong East/West divide in the railroads (in the US, anyways), whereas here you would have this extra North-South divide (especially since a good chunk of the OTL Norfolk Southern's northern trackage might belong to this behemoth...?).

SP's best bet at long-term survival IMO if you butterfly away the third round of rail mergers (those being from about 1980 onward) would be to focus on the southern markets. UP and the above alliance would own the route across the Sierra Nevada and out of San Francisco, while BN controls the northwest and northern plains. Best bet for this is for SP to focus on its southern routes, particularly running from Los Angeles to Houston, Dallas, New Orelans and Memphis, where they pass off to the eastern railroads, as well as the lines to Chicago and St. Louis. Santa Fe is in pretty good shape all around, and if you butterfly away their merger with Burlington Northern (which in a lot of regards is fairly smart), they will still make a good living hauling between California, Texas and Chicago.

Which is fairly smart, the merger or butterflying it? Also, I'm not sure how avoidable the mergers are, although you would probably know better than I do; it seems like sort of just the end of a very long consolidation of US rail service into a few geographical units with relatively limited overlap.
 
That would be interesting; OTL, of course, we have a pretty strong East/West divide in the railroads (in the US, anyways), whereas here you would have this extra North-South divide (especially since a good chunk of the OTL Norfolk Southern's northern trackage might belong to this behemoth...?).

Keep in mind that I had the alliance of smaller lines stay seperate in terms of managerial policies and most other aspects, just have them co-operate to keep traffic moving in order to keep UP and SP (using its Donner Pass line) at bay. In Transport America, Northeastern railroading ended up very differently - New York Central cut down its lines substantially in the 1970s and thus was able to survive, while the Pennsylvania, Reading, Lehigh Valley, Boston and Maine and Ann Arbor were the original portions of Conrail. Milwaukee Road, which had been desperate for a merger since the early 1960s, forced its way into Conrail as well, making Big Blue the first trans-continental line, though across the Northern Plains and Pacific Northwest Conrail plays second fiddle to the Burlington Northern. Erie Lackawanna and Delaware and Hudson are part of the Alliance.

As far as a north-south divide, you'd have to butterfly away the Chessie-Seaboard-L&N deal which created CSX, and also butterfly away Norfolk Southern. Killing NS is easy - Southern gets cold feet because of Norfolk and Western's labour troubles in the end of the 1970s and backs off. N&W would probably then, however, seek to join the alliance - with Chessie all over its territory, Conrail to the north and Southern to the south, they'd have a tough road. Erie Lackawanna wouldn't like that, however - but if you can make Norfolk a bigger international port than OTL, you could make N&W a major player in the alliance. What might help there too is Rock Island getting some coal traffic in the 1980s boom and having it exported, and sending it over N&W rails to Norfolk, which is one of North America's larger bulk export terminals. CSX is harder, because Seaboard and Atlantic Coast Line were two companies fighting for the exact same turf, and Louisville and Nashville was owned in large part by Atlantic Coast Line since the turn of the century. Seaboard System IMO is just about inevitable, but keeping Chessie out of it is possible, though not easy, as they will be slugging it out with N&W, New York Central, Conrail and the Alliance. Tough competition to say the least.

Which is fairly smart, the merger or butterflying it?

The merger itself. BN-ATSF is pretty much an end-to-end merger, and the two have very little overlap in territory, most of it in the Midwest were competition is stiff as it is.

Also, I'm not sure how avoidable the mergers are, although you would probably know better than I do; it seems like sort of just the end of a very long consolidation of US rail service into a few geographical units with relatively limited overlap.

The problem with that is that customer service tends to go to shit, and as the railroads are trying to maximize operating profit, at a time when traffic is growing (which has been pretty much constant since the late 1980s) having only a few lines tends to cause problems with congestion and customer service. It's part of the reason there are now many smaller lines with lots of traffic now, they are largely sucking up the stuff that the big boys can't carry. If you have real competition across markets, customer service becomes more important (you don't want to lose to the other guys, right?) and as you will have at least two mainlines instead of one, your traffic capacity goes up.

My area of expertise on this is the Pacific Northwest, because I worked there as a BN trainman in the early 90s. Once upon a time, there were three separate railroads over the Cascade Range - Northern Pacific, Great Northern and the Milwaukee Road. The merger of Northern Pacific and Great Northern into BN in 1970 eventually led to the Northern Pacific line over Stampede Pass being closed in the mid-1980s, and when Milwaukee Road pulled back from the Pacific Ocean in 1980, BN bought that line too but quickly found it was in too rough a shape. As a result, from 1984 until 1997 - when traffic through the ports of Seattle and Tacoma grew like a friggin' weed - the only paths for traffic were over Stevens Pass or south to Portland and up the Columbia River valley. (Why in the hell BN chose to rely on the steepest pass of the three, I don't know. The Stevens Pass was one I was usually on when working for BN, and it was a single-track, twisty, rather steep route that usually needed helper engines in both directions, not to mention it has an eight-mile-long tunnel in the middle of it.) They rebuilt the Stampede Pass line because of the traffic congestion, and even today its not tall enough for double-stack containers. If there had been a rival to BN in the area, those problems would not have happened - customers would have ditched them quite quickly.
 
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