Could a merger of___&___ saved the two railroads?

Question

the CNW (Chicago North Western) and the Milwaukee Road both are no more. (fallen flags) I wounder if a merger of the CNW and Milwaukee or a bought out of Milwaukee by CNW. could have saved the Milwaukee Road and make them a big player today with high Intermodal traffic from the west.

I am just wounder if I mean no disrespect to Milwaukee Road I just like to think of what could have been.

could it have worked or not. Why?

Answer 1

As Rango said, the loss of the Milwaukee Road is as dumbfounding as it is unfortunate.  There was simply no reason to abandon its main line to Seattle (it was the only profitable route on the system at the time of the bankruptcy as its branch lines back east in granger country, the system left intact after 1980, just didn't make any money), and Rango's assessment that BN people were at the head of management at the time of bankruptcy seems to explain why the route was pulled up.

In any event, to answer your question, sure the merger would have worked and would have been profitable once the new railroad was able to shed all of its unprofitable branch lines in the east.  The idea of the two jointly merging was seriously considered in the 1960s but eventually fell through (read the story in the second link below for more).  Of note, however, if anything the Milwaukee would have purchased the North Western as it was given the opportunity to outright purchase it in the 1970s but inexplicably decided against doing such.  

The bottom line is this, having studied the disastrous decisions made by the Milwaukee Road in the 1970s, if it had been properly managed the railroad would likely still be around today in one shape or form.  In terms of the lucrative intermodal traffic that is so profitable today in the railroad industry, it was just beginning to take hold in the 1970s and the Milwaukee was simply out gunning the BN for this traffic out of Seattle (it held something like 80% of the container volume leaving the Port of Seattle at the time).

Couple this with a profitable connection the Milwaukee could have made with the Southern Railway at Louisville, Kentucky to move freight westward (the Southern, at the time, was the most efficiently run railroad in the country) and its hard to say what the rail map would look like today in the west had the railroad not been run into the ground as it was.

In any event the above poster, Rango, is one of the lucky few who not only got to operate trains over the fabled Pacific Extension but also when electrics were still plying the route.  I'm sure he has plenty of good memories he could tell of his days on the Rocky Mountain Division (and/or Coast Division).

Answer 2

Sure it could have worked, the Milwaukee was a profitable railroad, it was inside skullduggery and conivings by the BN that caused it.

At the time of bankruptcy all 5 of our top operating executives were directly off the BN or it's pre-merger predecessor lines. It was the first chapter 13 bankruptcy in history where the president and CEO were left in place by the bankruptcy courts.

At the time of bankruptcy the Milwaukee owned a larger percentage of it's rolling stock then any other class 1 railroad in the country as opposed to leasing.

So, given the fact that there was no economic reason for it to happen, that is a hard question to answer, the back room dealings would still have taken place so it probably would not have mattered.

Or to put it in shorter terms, it could have worked, but would it have??