Berkshire Hathaway to sell railroads it didn't know it owned

[Omaha Steve]

Source: Omaha World Herald

Berkshire Hathaway recently discovered it owns two short-line railroads that it must sell because of its 2010 acquisition of BNSF Railway.

Warren Buffett's Omaha-based company said in a letter last month to the Transportation Department's Surface Transportation Board that the BNSF deal should have been subjected to the board's scrutiny because two Berkshire subsidiaries own the small railroads. The Surface Transportation Board reviews rail mergers, purchases, construction and rate disputes.

Agency officials appear satisfied with Berkshire's plan to sell the two small railroads by the end of the year, but Director Lucille Marvin said in a letter that the board is still weighing further action.

Buffett's company didn't immediately respond to a message. But in correspondence disclosing the problem to regulators, Berkshire officials suggest the company's size was the reason the short-line railroads were overlooked until now.

FULL story at link.



Read more: http://www.omaha.com/article/20121003/MONEY/121009925/1685#

[benld74]

1. Pennsylvania, B&O, Reading, and Short Line?

[elleng]

3. HA! No, these-

Berkshire said its MidAmerican Energy utility subsidiary owns the CBEC railroad that brings coal over six miles of track to its power plant south of Council Bluffs.

The White City Terminal Union railroad that serves an industrial park near Medford, Ore., is owned by Railserve Inc. That company is part of the industrial conglomerate Marmon Holdings Inc., in which Berkshire has owned a controlling interest since 2008.

Berkshire said the White City line is only 12 miles long and has two employees and two locomotives. It generates about $250,000 in revenue annually.

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We, in my joib at Interstate Commerce Commission, would have noticed this, and might have called him on it.

Friends, who retired with me when ICC was sunset and STB established, probably laughing about this today!

[mahatmakanejeeves]

7. I've been to Medford, and

even I haven't heard of the White City Terminal Union railroad. I went through the old tunnel on the California-Oregon line on a hy-rail.

[davidpdx]

8. I grew up in the area and am familiar with White City

There is a large VA Hospital there as well.

[Brother Buzz]

2. The Rent Is Too Damn High

[Honeycombe8]

5. Awwwwww. That brings back fond memories of playing Monopoly with my siblings when we were kids.

That & the rich guy w/the top hat on the cards and the jail square.

[Fuddnik]

4. It's not easy being filthy rich.

[Honeycombe8]

6. It's Berkshire that owns them. Not Buffet personally. nt

[PavePusher]

9. I really can't understand why this is even a problem.

Homo Sapiens - The only species that invents crimes out of something that isn't harming anyone.

[DallasNE]

10. Its Silly Season

The irony is that the logical buyer for CBEC Railroad is BNSF as that is who they interchange with. The Medford, Oregon railroad may even be in the same position although their interchange could be with UPRR. The purpose of the law that governs this is to encourage competition. Whether Berkshire-Hathaway owns these railroads has zero bearing on competition and considering that BNSF would be the logical buyer for at least one of these railroads shows this to be silly season.