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Re: PC: PC Failure
- Subject: Re: PC: PC Failure
- From: lnrr@xxxxxxxx
- Date: Sat, 15 Apr 2000 20:31:00 -0500
> the prr was go as far as money goes. so was the nyc.
Not so. Both railroads were in quite poor shape well before the merger.
(If they were in good shape, they wouldn't have considered the PC
merger.) The only reason they were still going in 1968 was because
non-railroad income was keeping them afloat.
> but the problem was not enough money was spent on the plant.
True. Too bad there wasn't money to spend.
> saunder and bevins and perlman were all
> milking money from the railroads.
There were some shenanigans (especially Bevan), but this was trivial
compared to the huge financial problems facing PC. You could have put ANY
three executives in charge of Penn Central and the results would have
been essentially the same; maybe PC could have made it a few months
longer, and maybe it would have failed sooner.
Penn Central was doomed from the start. The railroad couldn't cut its
astronomical losses (losses it was required by law to accept), and there
was no way the profits could ever cover these losses.
If we accept the arguement that the only reason that Penn Central failed
was because of incompetent or corrupt leadership, how do we explain what
happened to all of the other Northeastern railroads in that era? Were all
railroad managers in the region suddenly overcome with mental and moral
infirmities? (Excluding Young and McGinnis respectively, of course.)
Were the railroad regulation reforms of the late Seventies and early
Eighties unnecessary? If we accept that the big rail failures were caused
by incorrect management then Staggers was completely unneeded. For that
matter, the government could have just found a few new managers, bailed
out Penn Central, and let things run as usual. There would have been no
need for the reforms that came with Conrail's formation.
> they were lauger heading.
> this one wante4d to be in power and so did tis guy.
How is this different from every other corporation in the world?
> there were to many
> employees at the pc merger. that had to be taken care of.
This is one of the true problems. The reason Conrail eventually made it
(after billions from the government to clean up the PC problems) is
because they were able to make the cuts that Penn Central couldn't. Penn
Central ended up with too much track and too many people. (This is not to
say the Conrail didn't cut some muscle when they cut the fat.)
> unless you were there you dont know what the problems were.
This is a meaningless argument. Being in the middle of something doesn't
convey special knowledge, and may lead to incorrect impressions. "Wreck
of the Penn Central", for example, draws some incorrect conclusions
because the authors were too close to the events. (It's still worth
reading, if read critically.) Also, not being involved in something
doesn't prevent knowledge. I wasn't at Midway, Okinawa or Hiroshima, for
example, but I know why Japan lost World War II.
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