Old 09-26-2007, 04:01 PM   #1
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Default CN Takes EJE

The following is a press release so I'll just quote the entire text.

Quote:
CN TO ACQUIRE KEY OPERATIONS OF ELGIN,
JOLIET AND EASTERN RAILWAY FOR US$300 MILLION
_____________________________________________

MONTREAL, and PITTSBURGH, Sept. 26, 2007 - Canadian National Railway
Company (CN) (TSX:CNR)(NYSE:CNI) and United States Steel Corporation
(NYSE:X) announced today that their respective Boards of Directors have
approved an agreement under which CN will acquire the major portion of the
Elgin, Joliet and Eastern Railway Company (EJ&E) for US$300 million
(approximately C$301 million). The acquisition will significantly improve
the fluidity of CN's rail operations in the Chicago region, rewarding
customers with faster transit times and more reliable service. Under the
agreement, U. S. Steel's Transtar subsidiary will retain railroad assets,
equipment, and employees that support the Gary Works site in Northwest
Indiana and the steelmaking operations of U. S. Steel. Transtar's remaining
operations will become the Gary Railway.

The acquisition is subject to regulatory review by the U.S. Surface
Transportation Board (STB). Both CN and U. S. Steel believe that if the
application is approved by the STB as filed, it should allow closing in
mid-2008.

EJ&E, a Class II railroad, operates over 198 main line miles of track
encircling the City of Chicago from Waukegan, Ill., on the north, to
Joliet, Ill., on the west, to Gary, Ind., on the southeast, and then to
South Chicago.

CN President and Chief Executive Officer E. Hunter Harrison said: "This
acquisition is good news for railroading in Chicago. Chicago is essential
to CN's rail operations, yet it presents us with major operational
challenges. This transaction will improve rail operations on the CN system
and the rest of the Chicago rail network by moving CN trains out of the
urban core to EJ&E lines on the outskirts of the Chicago metropolitan
area."

U. S. Steel Chairman and Chief Executive Officer John P. Surma said: "This
transaction is positive for all involved. Our EJ&E employees and customers,
and the communities in which we operate will benefit from the EJ&E being
part of a large Class I railroad, while U. S. Steel will be able to focus
on the railroad assets serving Gary Works."

Harrison said: "This acquisition not only will give CN an opportunity to
expand its service to the North American steel industry, but also will
drive new efficiencies and operating improvements on CN's network.
Streamlined rail operations and reduced congestion resulting from this
acquisition will benefit current CN and EJ&E customers, the City of
Chicago, nearby communities, and the overall rail network in the region."

CN plans to invest approximately US$100 million for integration, new
connections, and infrastructure improvements to add capacity on the EJ&E
line and allow network synergies to be realized over time. The acquisition,
which will be financed with debt and cash-on-hand, is expected to be
slightly accretive to CN's diluted earnings per share in the first year
following STB approval.

The combination of the two rail networks is straightforward and will allow
EJ&E's existing traffic to be moved more efficiently and at lower cost.
There are no shippers served only by CN and EJ&E (2-to-1 shippers) who will
lose direct rail competition as a result of the acquisition, nor will there
be any other adverse impacts on competition. As in past transactions, CN is
committed to keeping gateways open and honoring trackage rights agreements
with all connecting carriers.

Gordon T. Trafton, CN's Senior Vice-President, Southern Region, said: "This
acquisition will bring EJ&E's experienced railroaders into the CN family
and will bridge what has been the missing link to connect the Eastern,
Western, and Southern regions of CN's network. We will apply our proven
business model in implementing this acquisition using the measured,
step-by-step approach we have employed in our previous transactions to
flawlessly integrate these operations."

More information on the transaction, including a map of the areas served by
EJ&E and CN, is available at www.cn.ca/EJEacquisition or click on the EJ&E
Acquisition icon on CN's home page.

Franchise Facts for Elgin, Joliet & Eastern Railway Company
-----------------------------------------------------------
- The Elgin, Joliet & Eastern Railway Company is a Class II railroad owned
by United States Steel's Transtar subsidiary.

- EJ&E operates over 198 main line miles of track encircling the City of
Chicago from Waukegan, Ill., on the north to Joliet, Ill., on the west, to
Gary, Ind., on the southeast, and then to South Chicago.

- EJ&E serves steel mills, petroleum and chemical plants, and a diverse
group of distribution centers, handling a full range of commodities, from
bulk raw materials to finished products. Coal is also moved to utility
plants in Illinois and Indiana.

- EJ&E owns 58 locomotives and operates a fleet of general service and
specialized railroad equipment.

- Interline rail connections exist with all of the major railroads entering
Chicago, which gives EJ&E customers access to the North American rail
system.

- EJ&E employs 700 people in Illinois and Indiana.
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Old 09-26-2007, 04:48 PM   #2
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You know what? I'm really starting to hate CN.
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Old 09-26-2007, 04:55 PM   #3
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Quote:
Originally Posted by ken45
You know what? I'm really starting to hate CN.
Why? Sometimes flags must fall. It doesn't sound like we are losing any trackage due to this transaction.

I hope that they do get an increase in fluidity in Chicago; every bit helps in that area.
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Old 09-26-2007, 08:58 PM   #4
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Quote:
Originally Posted by ken45
You know what? I'm really starting to hate CN.
Janusz is right. We all hate to see flags fall, but at least its not the EJE Bike Trail.
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Old 09-26-2007, 10:20 PM   #5
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Quote:
Originally Posted by ken45
You know what? I'm really starting to hate CN.
I pretty much hate all foreign RR's. Exept for CP and Ferromex
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Old 09-26-2007, 10:42 PM   #6
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Quote:
Originally Posted by ken45
You know what? I'm really starting to hate CN.
I thought the same thing this past weekend in Duluth and how the DM&IR is no more. I wish I had a chance to 'fan that railroad before they went bye-bye...
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Old 09-27-2007, 02:30 AM   #7
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Hopefully this will be the end of the dreaded, "trip-killing" 45 mph EJ&E gons.

Somehow I doubt it.
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Old 09-27-2007, 02:39 AM   #8
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Quote:
Originally Posted by NSFan14
I pretty much hate all foreign RR's. Exept for CP and Ferromex

Gee, between you and Ken, no wonder I don't get 3,000 views
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Old 09-27-2007, 03:08 AM   #9
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Quote:
Originally Posted by JRMDC
Why? Sometimes flags must fall. It doesn't sound like we are losing any trackage due to this transaction.

I hope that they do get an increase in fluidity in Chicago; every bit helps in that area.
But to lose the orange & green to black & red, I'll never get over that!
30 years ago I would go over the Joliet yard going to grade school.
That's what made me a railfan.

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Old 09-27-2007, 05:31 AM   #10
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Quote:
Originally Posted by Northern Limits
Gee, between you and Ken, no wonder I don't get 3,000 views
HA! Don't worry Jim. I dig the Canucks.
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Old 09-27-2007, 08:57 PM   #11
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Quote:
Originally Posted by Northern Limits
Gee, between you and Ken, no wonder I don't get 3,000 views
Im sorry. Im just not much into foreign RR's. I try to stick with the american stuff.
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Old 09-27-2007, 10:13 PM   #12
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From Railway Age:

Gary, Ind., seen as international rail hub

Gary, Ind., will become one of two major U.S. hubs in Canadian National's system under the railroad's plan to purchase the EJ&E Railway, according to local newspapers. Canadian National CEO E. Hunter Harrison on Wednesday said Kirk Yard south of U.S. Steel Gary Works is a "critical part" of the railroad's proposed $300 million purchase of the EJ&E, which could cut train waits in Chicago by as much as a day. Kirk Yard will be upgraded and that will "free up capacity, land and real estate to expand our intermodal operations and projects for CN Worldwide," Harrison said. The railroad will invest $100 million for new connections and infrastructure, the company said. CN will no longer use the Indiana Harbor Belt Railway once the deal is complete.
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Old 09-27-2007, 10:44 PM   #13
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It's a terrible feeling. The J has been my favorite railway ever since I started liking trains.
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Old 09-28-2007, 05:12 PM   #14
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I will miss the J. I've always loved the fact that the J was kind of the "local" road around me. Curse you CN for buying all the good regionals and shortlines! *shakes fist* Who's next, the Iowa Interstate?
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Old 09-29-2007, 12:44 AM   #15
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Quote:
Originally Posted by Slopes09
Who's next, the Iowa Interstate?
I wouldnt doubt it!
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Old 09-29-2007, 08:37 AM   #16
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Quote:
Originally Posted by JRMDC
Why? Sometimes flags must fall. It doesn't sound like we are losing any trackage due to this transaction.

I hope that they do get an increase in fluidity in Chicago; every bit helps in that area.
I hate any merge or take over . It may good for the business but I mean the paint scheme and the specific history will be mixed up . Recently our two railroads are deciding to merge , or say MTR is going to take over the KCR . I hate to see the 100 years old KCR takes over by the 30 years old MTR , and mixed the MTR style to the KCR , like train or other train station facitlies .
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Old 09-29-2007, 10:39 AM   #17
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Quote:
Originally Posted by Gordon Graham
I hate any merge or take over . It may good for the business but I mean the paint scheme and the specific history will be mixed up . Recently our two railroads are deciding to merge , or say MTR is going to take over the KCR . I hate to see the 100 years old KCR takes over by the 30 years old MTR , and mixed the MTR style to the KCR , like train or other train station facitlies .
Sure, we don't want to see the flags fall, but to say one hates the CN, as though they are actually some sort of evil or some sort of bad element in the industry, seems over the top to me. If you want to hate a business, hate a business that drains the public coffers by receiving subsidies despite their profits, or hate a business that tries to ruin competitors through illegal business practices. I know of no reason to hate CN, which was the original comment.
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Old 09-29-2007, 03:23 PM   #18
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Quote:
I know of no reason to hate CN, which was the original comment.
Here's one: their paint scheme. It's second only to UP in the least favorite category to see through my viewfinder...
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Old 10-02-2007, 08:15 PM   #19
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I'll be the first to admit that EJE makes sense to be merged into CN, but come on, they're the 5th railroad that I can think of that CN has gobbled up over the past few years, along with the DMIR, BLE, WC and of course the IC. The GT & DWP always were pretty much a US extension of the CN. IMO, it's just a bit out of hand, and I'm tired of CN just gobbling up railroads left and right. While the WC, DMIR, and EJE might make sense routing wise, you'll never convince me that the CN needed the IC or the BLE. It's just become a pet peeve of mine and CN keeps irritating that peeve. And sure, sometimes flags must fall, and most of them will eventually, but they're falling a little too fast for my liking, and some of them are falling for no reason IMO.

No reason to hate CN? Well, hate is a strong word, but they are my least favorite railroad by a mile right now. They're like neighbors who want to get too personal...you stay in Canada, I'll like you, you come into the US and start bugging me, I'll hate you.

And JRMDC, your response to this kind of has me curious. What was your reaction to the Conrail carve-up?
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Old 10-02-2007, 08:52 PM   #20
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Quote:
Originally Posted by ken45
And JRMDC, your response to this kind of has me curious. What was your reaction to the Conrail carve-up?
As a fan, not thrilled. Replacing blue with black, bad idea, all around. (Replacing blue with blue/yellow, I can live with that, but don't get me going about Dark Future, so boring.) Conrail (and Chessie! And PC!) were my RRs in my formative years. Love the blue! (Actually, Chessie is my all time favorite paint scheme, but CR was pretty nice.)

But never hate, or even any passion. There had been so much turmoil in the industry over the years that, frankly, it was just another transaction, albeit a major one. Sitting in the Pittsburgh area growing up, watching steel, watching the auto industry, I grew to expect major change and became comfortable with it. (BTW, my father passed on before his job disappeared.)

As a friend of the industry, mixed views at the time. Wasn't clear that you want to chop up a good thing, and Conrail had done a great job. (BTW, get the book "The Men Who Loved Trains" by Loving, great read about the industry and the bad times, turning into better.) So the uncertainty of such a big transaction was a concern. But it brought more competition on some/many lanes, a good thing. It made sense from a business/policy view, and that always carries a lot of weight with me.

As long as we are talking blue:
Image © Janusz Mrozek
PhotoID: 166365
Photograph © Janusz Mrozek

Image © Janusz Mrozek
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Photograph © Janusz Mrozek

and especially
Image © Janusz Mrozek
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Photograph © Janusz Mrozek
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Old 10-03-2007, 10:50 PM   #21
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Quote:
Originally Posted by ken45
I'll be the first to admit that EJE makes sense to be merged into CN, but come on, they're the 5th railroad that I can think of that CN has gobbled up over the past few years, along with the DMIR, BLE, WC and of course the IC.
Don't forget BC Rail!
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Old 10-05-2007, 04:23 AM   #22
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Quote:
Originally Posted by Ween
Here's one: their paint scheme. It's second only to UP in the least favorite category to see through my viewfinder...
Yeah, but when that is all the choice ya got, what ya gonna do?

And local VIA trains always has the sun on its tail.
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Old 10-07-2007, 02:21 AM   #23
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Well the only reason the WC was bought was to connect with the IC. So taking the WC and not the IC wouldnt have made sense. Sadly, though, all good things come to an end. Seems like "bad" things dont end as often though, huh? I still remember the day I heard the WC was bought (on my way to school) and I couldn't really fathom it. The WC was the reason behind my liking of trains, and it wasnt until 2003 that I really started going up to New Brighton to see them. By then, plenty of SD45s to go around still, but I didnt REALLY realize how much I actually loved the WC until the SD45s were all retired.

Change happens so quickly, I am seriously wondering how much stuff will come and go during my lifetime (im in 10th grade) and its a bit scary.
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Old 11-03-2007, 07:22 PM   #24
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Man have things changed around since I havent been here for a while. Miss a little miss a lot....

This is sad news that I am just finding out about. I really liked The J and it was nice to have a "local" railroad operating around here. I miss the WC too.
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