Why did Conrail split into CSX and NS?

Question

Why did Conrail split into CSX and NS?

Answer 1

Sorry, but some of the answers above had some serious misrepresentations of the facts.  Leafing through my scrapbook, here's how it all panned out.

Conrail, CSX and NS, in the 90's, were all financially healthy, publicly-traded, and independent railways - none had anything to do with one another.

Around late-1996, CSX made a takeover bid for Conrail.  Norfolk Southern, which had made several takeover attempts in the past, wouldn't be outdone by this.  A bidding war ensued, which became very heated at times.

A publicity campaign also became part of it.  Conrail employees sided with CSX, as NS was, at the time, infamous for their treatment (or lack thereof) of their employees (witness the lack of bathrooms in locomotives).  Stockholders sided with NS, as they were offering a straight cash deal, versus the cash-and-stock offer of CSX.

After this lengthy bidding war, which lasted close to 18 months, CSX and NS agreed to jointly buy Conrail: 42% for CSX, 58% for NS.

The problems in digesting this large system split in two were many, and even to this day, both railroads are feeling the financial pain of the transaction.  NS seems to have mostly recovered, and CSX is on it's way, although they're still reeling from it all.

I kept a scrapbook of newspaper articles from the Buffalo News, from the initial bid, through the bidding war, through the regulatory mess, right up to the problems in dissecting Conrail.  It was definitely an interesting period in time.

Answer 2

do you mean CSF and NS?

try here,

http://www.google.com/search?hl=en&q=Con...

Answer 3

To elaborate after Budgie,

Some lines and equipment went to NS, some to CSX.  Notably today, former PC or Conrail cars were labled NYC if they were to be transfered to NS, and PRR to CSX.

However, certain trackage (detroit area and Philly to New York City) and locomotives retained the Conrail name and are considered "shared assets.  Conrail does live on.

As for the condition of the railroads before the whole fiasco, CSX was really cooking the books, and a purchase would have been a way for management to get out of the blame for the inevitable bad news.

Answer 4

Conrail didn't split into CSX and NS. CSX and NS split Conrail due to, Conrail was going bankrupt. I hope this helps....

Answer 5

According to my available info, they had nothing to do with each other, but for the following:

Conrail came into existence by an act of Congress after collapse of the Penn Central, via the Rail Revitalization and Regulatory Reform Act of 1975.  Penn Central holdings and Erie Lackawanna holdings were merged to form the new Conrail. In 1985 Norfolk and Western purchased Conrail.

The Norfolk and Western Railway merged with the Southern Railway to form Norfolk Southern Corporation, the parent holding company, though at that time the railroads were still operating independently, in1982.

The CSX Corporation was formed with the 1980 merger of the Chessie System and Seaboard Coastline Industries, the parent company of the Seaboard System Railroad, which, at that point in time, all had gobbled up no less than twelve smaller railroads.

Divestitures of one kind or another, the dates I don't have, has produced the rail company's as they are today.

Thanks for the good question.  I learned something by way of answer.

Answer 6

Conrail did not split into CSX and NS.  Conrail is still its own company.  NS owns 52% of Conrail, CSX owns 48%.

NS and CSX share assets, road, etc.  Conrail still operates its own audit commitee and deals with much of its own oversight.

Letting either NS or CSX have full control of Conrail would have made a near monopoly along the East Coast, namely the Northeast and New England.