Is GM wanting out of locomotive business?

friscobob Jul 29, 2002

  1. friscobob

    friscobob Staff Member

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    From the Trains.com News Wire:

    According to the leader of the Canadian Auto Workers Union, General Motors is wanting to sell its locomotive and defense units, both based in London, Ontario. General Dynamics has indicated interested in the purchase of GM Defense, but so far no serious bidders have come forward about EMD.

    The CAW is negotiating a new contract with GM and currently has a no sale/closure clause in their current contract, but according to CAW president Buzz Hargrove, there is no certainty such a clause would be incouded in any contract with a new owner of EMD.

    Neither GM nor GD are commenting on any sale news. It is speculated that the buzz about the sale may be in part to EMD's order sheet, which has only one major North American contract- the building of Union Pacific's SD70Ms. Sales of AC-powered units have been sluggish as General Electric's AC4400Ws and AC6000Ws have been the favorite of North American railroads.

    To check/verify this story, go to Trains Website and click on the News Wire section under "Railroading"
     
  2. pjb

    pjb E-Mail Bounces

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    For several years, as has been covered in "Railway and Locomotive Review" and elsewhere GM has had major problems allowing RR shop personnel to fix the problems that cropped up, and had to have far more money tied up in leasing than they liked. Several years ago UP bought locos from them to keep them in the game, because: they did not want to become dependent on a single supplier; did not like GE's comments that if UP personnel kept their noses out of the electrical control systems much of the problems experienced with GE ac locos would be obviated; and they hoped that by sustaining GM that GM would lick the "teething problems" they were having. However, in a manner somewhat reminiscent of Baldwin DEs , the constant fixing of control software and the circuits they directed just kept on happening.
    Historically, GM has been able to succeed when KISS principles held the key to mass producing products. There retreat in heavy equipment that has seen Euclid, and then GM heavy trucks parcelled out to others to operate reflects their inability to demonstrate flexibility in the face of competitors like Terex, Caterpillar, and foreign makers in heavy construction, and Paccar , and foreigners (like Volvo who runs the GM over the road truck business) in highway trucks. Their acquisition of HumVee production also reflects their recognition of what their limitations are. They will do very well with this product and increase per unit profitability doing what they do best.

    The time may be approaching when the requirements of current railroading policy by the 6Gorillas results in the locomotives used be so overbuilt. and equipped with both technological redundancy and complexity in their systems, that the railroad shop forces will be unable to actually do the work on the mainline power. This will come from both the cost of the diagnostic and remanufacturing equipment and the lack of skills available in their shop forces.

    Interestingly, this was a major factor in the passing of the steam locomotive. Fred Colvin , who was probably as knowledgeable a figure with respect to machine tools as the world has ever known, commented in "Sixty Years With Machines" , that railroads( with only the C&O and N&W as exceptions) had collections of ancient machine tools and workers applying hopelessly out of date procedures that could not maintain state of the art locomotives. His conversations with railroad mechanical people suggested this came from the gap between top managements understanding of how to generate profits by providing more efficient transportation to its users and by the accounts view that holding down servicing costs was paramount.

    As Phil Churella's look at the dieselization of railroads shows eliminating labor costs in maintaining steam locos and especially water service were powerful reasons to embrace the DE. He also shows that GM sold them by bypassing mechanical departments and going straight to the Boards of Directors. It is sort of interesting that we seem to be coming to that point again. In a few years. if the DE is still the main prime mover, we will see GE maintainance employees doing the work of the railroad based shop forces. Quien Sabe?
    Good-Luck, PJB
     
  3. Colonel

    Colonel Staff Member TrainBoard Supporter

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    PJB,

    An excellent post very interesting reading
     
  4. Alan

    Alan Staff Member TrainBoard Supporter

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    PJB, a splendid and extremely interesting commentary of the current state of play in the locomotive industry. Thank you.
     
  5. Hytec

    Hytec TrainBoard Member

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    I never thought of it from that perspective. Thanks
     

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