Moorman: Mergers ‘don’t make sense at this time’

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NS9943Marion
A southbound NS freight passes Marion, Ohio, in October 2012 on a line that epitomizes railroad mergers. The one-time Pennsylvania Railroad line was conveyed to Norfolk & Western in 1964 to support its acquisition of the Nickel Plate Road and Wabash.
Brian Schmidt
NORFOLK, Va. – Mergers continue to be a hot topic as the railroads host their third quarter earnings calls this month, and Norfolk Southern’s call on Wednesday is no exception.

During the earnings call, NS Chairman and CEO Wick Moorman was asked whether he thought that merger of today’s large railroads is a good idea His response was that mergers “don’t make sense at this time.” He added that while he had great respect for the chairman of the Canadian Pacific, he does not agree with him on the merger question.

Moorman outlined three reasons why he thinks mergers are not a good idea at the moment. First, history shows that mergers of large railroads are difficult, and that the negative impact on service levels can be significant. Second, the traditional benefits of mergers of the past, such as consolidation of overlapping lines and facilities, are not really available any more. Third, the regulatory environment will be a lot tougher, as there is likely little appetite for approval of larger railroads than exists today.

NEWSWIRETrains News Wire

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