Last Train Leaving EVTAC Started Fire EVELETH, Posted 10:04, May 16, 2003 -- The fire near Zim on Thursday was started by sparks from a Duluth Missabe & Iron Range Railway train. The train was carrying what could be EVTAC's final load of taconite pellets to the Twin Ports. DM & IR has had to lay off 86 people because of the temporary shutdown at EVTAC. The Eveleth mine was one of the railroad company's largest customers. Many current and former steelworkers showed up to see the train's final run. ”It's very historical, and mining on the Iron Range for years has been very cyclical, with mines opening, playing out, closing, and with some of the larger pellet plants, it’s the Lifeblood of the railroad,” said Dave Schauer, DM&IR Historical Society. As mining tradition dictates, a tree was placed in the final car carrying taconite as a symbol of the shut down. EVTAC stopped taconite production on Wednesday.
Here's more on the DM&IR saga. Apparently, they are up for sale now: Two of the Northland's largest and most deeply rooted bulk transportation companies are up for sale. Duluth Missabe & Iron Range Railway Co. and USS Great Lakes Fleet Inc. employees recently learned their parent company soon could be sold. Both are owned by Great Lakes Transportation LLC of Monroeville, Pa. John Giles, president and CEO of Great Lakes Transportation, said the company's owner, Blackstone Capital Partners, has been approached by a prospective buyer. However, Giles declined to identify the interested party during a Tuesday phone interview from company headquarters. "As a result of this unsolicited interest, Blackstone has decided that the time is right to explore a sale of GLT," Giles wrote in a letter workers received late last week. Blackstone is a New York-based investment banking firm that acquired a majority ownership interest in the businesses in 1988. In addition to the DM&IR Railway and the Great Lakes Fleet, Blackstone also owns two Pennsylvania shipping businesses: the Bessemer & Lake Erie Railroad Co. and Conneaut Dock Co. All are included under Great Lakes Transportation LLC's corporate umbrella and "are on the table," Giles said. Giles told employees he wants them to be aware of the situation, although he's unable to answer many basic questions. "There is a lot that I do not know at this time," he wrote. "For instance, I do not know who will come to 'kick the tires.' I suspect we'll see financial buyers (others like Blackstone) and industry buyers (other railroads). I also don't know how long this will take, nor do I know the eventual outcome." Great Lakes Transportation has a big footprint in the region. The Great Lakes Fleet, based in Duluth, operates eight cargo vessels and employs about 280 people, said Charles Patterson, its vice president and general manager. The vessels not only keep cargo flowing but also stimulate the local economy in myriad ways, said Adolph Ojard, executive director of the Duluth Seaway Port Authority and a former manager of the USS Great Lakes Fleet. For instance, Ojard said, seven of the fleet's eight ships tied up for winter 2002-03 in their home port. And Great Lakes uses the idle time to tackle repairs and maintenance tasks. A single ship typically generates about $500,000 worth of work during the winter. The railroad provides a critical link to the port, too, carrying cargo to and from ships that call on the Twin Ports. DM&IR owns 212 miles of track in Northeastern Minnesota, as well as ore docks in Duluth and Two Harbors. Its primary customers through the years have been taconite producers, including U.S. Steel's Minntac mine, Ispat Inland and EVTAC. The latter, its second-largest customer, ran out of orders for taconite pellets and closed May 14, possibly for good. Responding to the loss of EVTAC's business, DM&IR cut 86 people from its 470-person work force last week. U.S. Steel founded the Great Lakes Fleet and DM&IR in 1910 and 1937, respectively. In 1988, however, U.S. Steel sold 51 percent of its interest in the companies to Blackstone. The resulting holding company was called Transtar Inc. Then, in 2001, Transtar evolved into Great Lakes Transportation when U.S. Steel sold its remaining interest in the companies to Blackstone and its transportation management team. Giles said speculation that Blackstone planned to sell Great Lakes Transportation has run rampant for years. On numerous occasions, he has been approached by employees. He has repeatedly quelled rumors of buyouts by Canadian National or Burlington Northern Santa Fe, as well as talk that U.S. Steel planned to repurchase its old transportation network. Nevertheless, speculation that Blackstone would sell Great Lakes Transportation has intensified in recent months. "There are so many rumors, it's just unreal," said Dick DeLano, a DM&IR engineer and chairman of the Brotherhood of Locomotive Engineers Local 163. When Blackstone began to entertain offers, Giles said he felt compelled to tell employees. "I think information is the oxygen of any company," he said. "And you need oxygen to survive." Regardless of ownership, Giles remains confident about the future for Great Lakes' railroad and ship operations. "There's a reason why the USS Great Lakes Fleet is 100 years old and the Bessemer & Lake Erie is 130," Giles said. "To this day, they move products very efficiently. If they didn't, they would have been replaced a long time ago." Giles said the cargo carried by Great Lakes' trains and ships simply must be moved. "Minnesota Power needs coal to burn," he observed. "And taconite pellets are worth nothing sitting on the ground at Minntac. Their only value is in places like Gary."
