GE Explores Exiting From the Railroad Business

[mahatmakanejeeves]

Hat tip, Trainorders: Eastern Railroad Discussion > G.E. explores exiting RR business

GE Explores Exiting From the Railroad Business

Under pressure to streamline, new CEO looks to shed century-old locomotive division

By Thomas Gryta and Dana Cimilluca

https://twitter.com/tgryta
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https://twitter.com/danacimilluca
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Updated Oct. 26, 2017 1:50 p.m. ET

General Electric Co. is looking to exit from the railroad business, one of its oldest, as new Chief Executive John Flannery seeks to streamline the conglomerate. ... The Boston-based company is exploring options for the GE Transportation division, according to people familiar with the matter, as a major part of Mr. Flannery’s plans to divest more than $20 billion worth of assets in the next two years. ... The company, the people said, is looking to partner, spin off or possibly sell the operations, which primarily produce diesel-powered locomotives and railroad equipment. An outright sale could trigger a big tax hit since GE has owned the business for a century and it is valued so low on its books, ​one person said.

Although GE is one of the world’s biggest makers of freight locomotives, the business is cyclical and has been suffering lately from slack demand. In the first nine months of 2017, the unit’s revenue slipped 8% and profits fell 15%. The division accounted for $4.7 billion of GE’s total revenue of $123.7 billion last year. .... GE’s diesel locomotives are primarily assembled in Fort Worth, Texas, and western Pennsylvania. The division had about 10,000 employees at the start of the year, 2,000 fewer than the prior year. In July, GE said it would stop locomotive production at a plant in Erie, Pa., and shift the work to Fort Worth.
....

GE mainly produces freight locomotives, which sell for millions of dollars apiece. It eclipsed rival Electro-Motive Diesel, now a unit of Caterpillar Inc., as the biggest seller of diesel locomotives in the early 1990s. Rivals like Siemens AG , Alstom SA and Bombardier Inc. mostly compete in the passenger market.
....

Last month, GE agreed to sell its industrial-solutions business to Switzerland’s ABB Ltd. for $2.6 billion. The unit, which makes electrical equipment for utilities, was started around 130 years ago when Thomas Edison patented the first circuit breaker. ... In March, GE struck a deal to sell its water business to France’s Suez SA and one of Canada’s largest pension funds for around $3.4 billion.

Write to Thomas Gryta at [e-mail] and Dana Cimilluca at [e-mail]

[Wellstone ruled]

1. This one is going to get real ugly

real soon. GE will dump this business just like they did to EMD,and that one was to get rid of Union Jobs in order to show a major profit to satisfy Wall Street.

The real truth in this situation is this,UP and BNSF have Hundreds of Locomotives parked because of one thing. Coal and the lack of Power Companies using Coal. Normally,used Loco's are republished and sold to or leased to smaller Rail operators,well not happening any more. All the Major Railroads have successfully sold off or created new companies to operate their less than profitable Rails. And there is just a glut of New and Used Locomotive Power that needs to be worked off. Going to take years until this is accomplished. Until the Scrappers show up to the train yards,looks like this will be around for some time.

[A HERETIC I AM]

3. Roughly 290 Union Pacific locos stored on a spur between Tucson and Benson, AZ (Vid)

This vid is over a year old, but they're still there. I passed by this spot 4 days ago.

Here's a Google maps link of the location;

https://goo.gl/maps/1Wi6tSVUKXL2

[Wellstone ruled]

4. Bnsf has a couple of hundred

dead line at Bill Wyoming as well as several hundred Coal Hoppers.

BTW,UP is rounding up all their SD-40-2's for the Scrappers .

Norfolk Southern has implemented what is called larger Trains meaning less personnel and fewer trains. Since their Coal Haul Contracts have been drying up,their P & L's are taking a major hit. Notice also,the increase in derailment activity. Cutting back on Maintenance?

[mahatmakanejeeves]

5. All you had to say was "Bill"; "Wyoming" wasn't necessary.

There's only one. I've been there, but it was 24 years ago.

CSX still has some SD-40-2s (I'm pretty sure they're -2s) running. I see them on the freights every now and then. I live not far from the tracks. I heard a northbound freight hammering past the Braddock Road Metrorail stop this morning as I was waiting for my bus. CSX likes to slip a northbound container train through the VRE commuter trains in the morning.

I saw this train yesterday morning as my Yellow Line Metro train was crossing the Potomac River. The train was probably headed to Philadelphia, as it was single-stack. Baltimore's Howard Street Tunnel isn't high enough for double-stack trains.

Whatever was powering this morning's train, at least one unit was turbocharged.

Thanks for writing.

[Wellstone ruled]

6. Notice the Dead Line two years ago.

Message from a Rail Fan said he counted two hundred as of July this year. The one and only Bill.

[democratisphere]

2. GE is no longer the company that it used to be and makes very shortsighted

decisions. Perfect example of a great American company destroyed by wall street greed.