Volume 50 #1 Northstar Railway Historical Society Jan 2019
Publishers of the Minnesota Rail Calendar
Northstar Chapter Officers
Past President Dan Meyer [email protected] 763-784-8835
President William Dredge [email protected] 612-868-2837
Secretary Richard Tubbesing [email protected] 763-757-1304
National Director Jim McLean [email protected] 612-747-8541
Treasurer Russ Isbrandt [email protected] 651-426-1156
Vice President Ed Johnson [email protected] 612-408-1066 (cell)
Trustee Gary Rumler [email protected] 651-385-8752
Happy New Year!
Page 1 Northstar News January 2019
L: CP with a UP unit
at Hoffman in St Paul
Jan 13 2018. -Bob
Ball
R: Amtrak #8 at Van
Buren St in Mpls
March 3 2018 –Bob
Ball
Meeting Notice (Note Change in Date!!!!!!!!) Next business meeting is scheduled for Saturday January 12
2019 6:30pm, at Roseville Lutheran Church at 1215
Roselawn Avenue, midway between Lexington and Hamline
Avenues in Roseville. Note: This is moved from January 19
2019. See map on page 2.
Program after the meeting – Jack Barbier Video of a potpourri
of trains. There will be a pre-meeting get-together Jan 12th,
2019 at the Keys Cafe and Bakery at the northeast corner of
Lexington and Larpenteur starting about 4:45 pm. PLEASE
CALL Bob Clarkson at 651-636-2323 and leave a message
with your name and the number of persons coming with you.
Next newsletter will be out around Feb 1, 2019.
Note that the officers have changed from 2018. Also, Dues for
2019 are due January 2019. Due to increased expenses, Dues
for 2019 are $25 for NRHS members, $28 for subscribers. If
you are a member, you have received dues invoices for 2019.
NRHS dues are available at the NRHS web site. Do not pay
NRHS dues to our chapter, only pay our Chapter dues to our
chapter.
Table of Contents
Meeting Notice Page 1
Chapter Officers, Editor Column Page 1, 2
H Martin Swan Page 2
Alaska Railroad shutdown Page 2,3
Alaska Railroad Recovery Page 3,4
Railroads and Government Shutdown Page 4
Milestones for SW Light Rail Page 5
New Locomotives for Amtrak Page 6
Minnesota High Speed Rail News Page 7
AARPCO news highlight Page 7
Railway Age interview with Matt Rose Pages 8,9,10,11,12,13,14,15,16
Holiday Trains picture page Page 17
Railfan Events Page 18
mailto:[email protected]:[email protected]:[email protected]:[email protected]
Program Chairman John Goodman [email protected] 612-839-0905
Newsletter Editor Committee: Richard
Tubbesing, Dawn
Holmberg
763-757-1304 763-784-8835
Newsletter Distribution Richard Tubbesing [email protected] 763-757-1304
Calendar Committee John Goodman Dawn Holmberg
Russ Isbrandt
612-839-0905 763-784-8835
Trip Director John Goodman [email protected] 612-839-0905
Chapter Librarian/
Historian
John Cartwright [email protected] 651-481-8479
Webmaster Dan Meyer [email protected] 763-784-8835
Chapter Mailbox Northstar Chapter NRHS PO Box 120832 St Paul MN 55112
Library Data Base Ad-
ministrator
Russ Isbrandt [email protected] 651-426-1156
Staff
Meeting Location: From the east or west take MN 36 to Lexington
Avenue. Drive south on Lexington Avenue to Roselawn Avenue and
turn right. The large lighted parking lot is on your right as you travel
west on Roselawn. Use the lower entrance to the church and turn left
through the commons area. We’ll be in room 40, The Diamond Room.
From the Editor:
Great photos are in the 2019 Minnesota Rail Calendar and is still
available and only a few remain.! See Dawn Holmberg to purchase.
All Proceeds benefit our Chapter!
Our holiday banquet was a great success with
35 members and guests attending. An Out-
standing video was shown of the development
of the Florida trains. Thanks to Bill Dredge for
providing the video.
Photo selection for the 2020 calendar is now is
progress.
If you have any Minnesota railroad photos to
submit for consideration, please contact John
Goodman or Dawn Holmberg. Deadline is Jan
31 2019.
Volume 49 #10 Northstar Railway Historical Society December 2018
Page 2 Northstar News December 2018
Former President: H Martin Swan Illness.
I got a phone call from Marty on Friday that he has been in Woodwinds hospital near Woodbury, MN for a week already. He was
taken by ambulance to the hospital. He is unable to walk even a few inches. His doctors are telling him that it is a back problem
and he needs rest and some type of shots. Early this week he says that he has been transferred to a care center where he will receive
treatment for his problem. Please send well wishes for his Recovery. -The Editor and John Goodman
Alaska Railroad Suspends Operations After Quake Damages Anchorage Facilities.
November 30, 2018 Robin Wood, [email protected] ‘Gary R. Kazin' [email protected] provided by John Goodman
FAIRBANKS - The Alaska Railroad has suspended all operations amid "severe" damage at their Anchorage Operations Center
and unknown condition of tracks throughout the state.
All passenger operations for Saturday and Sunday have been canceled, including holiday and aurora passenger train services.
External Affairs Manager Tim Sullivan said the operations center has lost power and is experiencing flooding.
Continued on next page:
mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]
Page 3 Northstar News January 2019
Volume 50 #1 Northstar Railway Historical Society Jan 2019
Continued from previous page: "It's tough to run trains when you have no dispatch," he said.
Sullivan said no reports of track damage have yet been reported, but it will take a day or two for staff to fully assess conditions.
Until the tracks are cleared for use, all railroad operations are suspended, Sullivan said.
Because all winter passenger services are weekend-based, Sullivan doesn't expect any passengers are stranded. He said anyone
who had purchased tickets for weekend services will be fully refunded.
As of noon today Sullivan said three crews of roadmasters in high-rail trucks are inspecting lines. One truck is traveling south
from Fairbanks, one truck north out of Anchorage and one truck south out of Anchorage.
Alaska Railroad Should be Back on Track by Monday
Night. Elwood Brehmer Alaska Journal of Commerce Mon, 12/03/2018
From : 'Gary R. Kazin' [email protected] Provided by john Goodman
The first Alaska Railroad trains were back traveling between Anchorage and
Fairbanks late Dec. 3 following the 7.0 magnitude earthquake that damaged the
tracks running between Alaska’s largest cities Nov. 30.
Alaska Railroad Corp. spokesman Tim Sullivan said afternoon Dec. 3 that ser-
vice on the railroad’s northern route was expected to resume later that day “due
to the hard work of a hell of a lot of people.”
A day-and-a-half after the quake it was unclear when the tracks would be reo-
pened as the quake had rendered at least three areas “impassable,” Sullivan told
the Anchorage Daily News at the time, as inspections were ongoing.
Dec. 3 he said at least a half-dozen areas of damage were identified including
the three that required immediate repairs to reopen the route.
“Those three are now passable,” Sullivan said. “They will be slow orders.
There will be folks going over them beforehand to make sure that they’re in
good shape; folks will be going over them after the trains to make sure they’re
still in good shape — that we don’t see any difference in them after the trains
go through and that will be the case for quite some time.”
In addition to areas where the gravel bed subsided, there were other areas
where the tracks shifted but can still be used with caution at slower than normal
speeds, he added.
As is the case with many construction projects in Alaska, there is a lot the rail-
road can’t do to repair its tracks in the winter so some of the work will have to
wait until spring, according to Sullivan.
The tracks south of Anchorage to Whittier and Seward did not sustain as much
damage. The railroad issued a subsequent release Dec. 4 stating that it was set
to resume regularly scheduled passenger and freight service along the entirety
of its routes.
“We could not be more pleased with the work our crews have done to get the Alaska Railroad back up and running in just over 72
hours,” Vice President of Marketing Dale Wade said in a formal statement. “This incredible effort from railroaders speaks to the grit
and perseverence of Alaska and its people. We are happy to be able to return to serving our passengers and freight customers so
quickly.”
Summer is the busy season for passenger service, but the Alaska Railroad has increased its winter ridership in recent years by offer-
ing offseason fare discounts along with holiday, aurora-viewing and other themed trains. Continued on next page:
Alaska Railroad crews inspect and repair stretches of
track rendered impassable after the Nov. 30 earthquake
of 7.0 magnitude that shook Southcentral. Service to
Fairbanks suspended immediately after the damage was
set to resume Monday, Dec. 3. These photos were taken
at the railroad's milepost 139, just south of Eklutna.
(Photo/Courtesy/Alaska Railroad Corp.)
http://www.alaskajournal.com/authors/elwood-brehmermailto:[email protected]
Page 4 Northstar News January 2019
Volume 50 #1 Northstar Railway Historical Society January 2019
Continued from previous page:
In all, the railroad has passenger service on 482 miles of track from Fairbanks to Whittier and Seward.
The railroad has also been a primary supplier of fuel to the Interior since Flint Hills Resources closed its North Pole refinery in the
spring of 2014.
The earthquake also caused a pipe to burst in the railroad’s Anchorage Operations Center, which will require significant work to re-
pair, but the railroad’s other facilities in Anchorage sustained only minor damage.
Elwood Brehmer can be reached at [email protected].
What the Government Shutdown Means for Rail. December 26, 2018
Written by Paul Conley, Engineering Editor; and Editor-in-Chief, Railway Track &
Structures
Railway Age photo by Stuart Chirls
The effects of the partial shutdown of the federal government on
the rail community appear not to be significant, at least for now. The action comes as President Trump and the Republican-controlled
Congress remain locked in a budget dispute over funding for a wall
along the U.S. border with Mexico.
Amtrak is expected to continue to operate during the shutdown. The
Department of Transportation closed down as expected at midnight
on Dec. 21. More than 30% of the DOT workforce, or 20,442 people,
are expected to be furloughed, according to the DOT’s 31-page shut-
down plan.
The Federal Railroad Administration said that more than 40% of its
personnel were expected to be furloughed. However, staff in the
FRA’s Office of Railroad Safety were expected to continue working,
albeit without pay, during the shutdown.
By contrast, all employees at the FRA’s Office of Railroad Policy and Development, which is the primary grantor of federal funds to
Amtrak, are furloughed. All RPD activities are suspended for the duration of the shutdown.
Of the 558 staffers at the Federal Transit Administration, 493 of them were expected to be furloughed. Some work related to Hurri-
cane Sandy recovery will continue on, and a small staff will be available for emergencies. But transit and local-government authori-
ties seeking funds for rail-related projects won’t see any checks until the shutdown ends. “No grants, cooperative agreements, con-
tracts, purchase, orders, travel authorizations, or other documents obligating funds would be executed,” the agency said in its shut-
down plans.
The Surface Transportation Board posted a message on its website saying that “All Surface Transportation Board operations – includ-
ing this website and agency email – are suspended for the duration of the partial federal government shutdown. ”
Senate-confirmed presidential nominees are exempt from adverse effects of a government shutdown and continue to be paid, as they
are owed their pay for the entirety of the term to which they were confirmed. So, FRA Administrator Ronald Batory, STB board
members Ann Begeman and Deb Miller are exempt from the shutdown, as is DOT Secretary Elaine Chao and others in DOT who are
confirmed.
While Amtrak is federally owned, it is chartered as a corporation under District of Columbia law and not subject to a government
shutdown. Its employees will continue to be paid. However, as Amtrak is dependent upon federal subsidies, a lengthy shutdown—an
exact number of weeks or months is not known other than to senior Amtrak management—could imperil its flow of federal
funds, eventually causing a shutdown.
– with reporting by Frank Wilner in Washington
mailto:[email protected]://www.railwayage.com/author/paulconley/https://www.transportation.gov/sites/dot.gov/files/docs/mission/budget/328471/consolidated-december-2018-shutdown-plan-final.pdfhttps://www.transportation.gov/sites/dot.gov/files/docs/mission/budget/328471/consolidated-december-2018-shutdown-plan-final.pdfhttps://www.stb.gov/stb/index.html
Page 5 Northstar News January 2019
Volume 50 #1 Northstar Railway Historical Society January 2019
Major Milestones for Orange Line and Southwest Light Rail.
DECEMBER 21, 2018 - Move Minnesota Highlights Major Milestones Metro News from Rick Krenske In the Twin Cities metro, 2018 is coming to a close with big progress for transit riders and supporters. In late November, the Or-
ange Line received all the federal dollars it needed to become fully funded. That same week, officials also broke ground on the
Southwest Green Line Extension. Both of these major projects have been in the works for years and are likely to transform how
people get around in our cities and suburbs.
Orange Line Now Fully Funded
Riding the bus should feel effortless. If you agree with that statement, then Orange Line bus rapid transit is a game-changer.
The Orange Line will improve people’s access to 198,000 jobs in the busiest commuter corridor in the metro. It will mean nice,
new stations along I-35W and a fast, frequent transit option—all-day, seven days a week. That’s a whole new level of consistency
and reliability for riders traveling between downtown Minneapolis, Richfield, Bloomington, and Burnsville.
Orange Line plans include replacing what might have been “the worst Metro Transit bus stop of all time” with a new, and desper-
ately needed, Lake Street Station and better bicycling and walking connections to local streets and the Midtown Greenway. Within
a ten-minute walk, almost half of all residents are transit dependent and three-fourths are people of color. We’re excited to see this
accessible, multimodal station open up new options for people of all abilities and to see the connections it creates for the surround-
ing neighborhood.
Despite all these positives, the fact that the Orange Line is now fully funded did not come easily. It took persistence from people
who believed this project was worth fighting for.
In August 2016, the planned bus rapid transit line hit a big snag here at home, when it almost lost county funding. With the entire
project at risk, our advocates and allies rallied to save it. The groundswell of support sent a clear message to regional decision-
makers that the Orange Line is truly a must-have for the metro.
Until two weeks ago, federal funding for the Orange Line was also uncertain–especially under the Trump Administration, which in
2017 had proposed ending federal investment in any new transit construction in the US.
Now, with the final $74 million in federal funding confirmed, riders can breathe easy. Construction is underway and the Orange
Line has all the resources it needs to move forward. Phew! We can’t wait to ride it with you in 2021!
Southwest Light Rail Breaks Ground
The Southwest Green Line Extension also hit a major milestone in recent weeks. The Federal Transit Administration gave approval
for construction to begin, and officials held a ceremonial ground breaking on November 30.
This moment has been a long time coming. For over a decade, our supporters have joined other metro residents and decision-
makers in shaping plans for Southwest light rail. Throughout that planning process, the project has been a lightning rod for transit
critics and has inspired important debates even among transit supporters. The project timeline has been delayed several times.
Real construction could finally start this winter and then continue over the next three years, creating up to 7,500 construction jobs
in the process. The highly anticipated line will likely open in 2023.
When it does, people in St. Louis Park, Hopkins, Minnetonka, and Eden Prairie will have light rail access in their communities for
the first time, and new stations will connect residents in Minneapolis. On weekdays, at least 34,000 riders will use the Green Line
Extension to get to work and other key destinations. The new extension will connect seamlessly with the Green Line service that
runs today between downtown Minneapolis and downtown Saint Paul.
This light rail project also highlights the need for more transit-oriented development and affordable housing in the southwest metro.
The Metropolitan Council anticipates that the population along the Southwest extension will grow a whopping 56 percent by 2035.
And how we grow as a region really matters. When we’re intentional about combining transformative new transit options with sus-
tainable and community-centered land use, we can ensure that the cities and suburbs of the future are more equitable, more climate-
friendly, and more connected than the ones we live in today. Thanks to all for joining in the work to make it happen—and celebrat-
ing the big and small wins along the way!
Volume 50 #1 Northstar Railway Historical Society January 2019
Page 6 Northstar News January 2019
Siemens to Supply 75 New Tier 4 Locomotives to Amtrak. December 21, 2018 Trains newswire
WASHINGTON – With demand for Amtrak service at record levels, Amtrak will acquire new mainline passenger diesel locomo-
tives from Siemens Mobility to replace its aging National Network locomotive fleet. These initial 75 locomotives will be used princi-
pally for Amtrak's long distance train service, with options to purchase more, for use on some state-supported routes and for future
growth.
"These new locomotives will offer increased reliability, more hauling power, improved safety features and lower emissions," says
Amtrak President and CEO Richard Anderson.
"Siemens Mobility is honored and grateful to Amtrak for this opportunity to assist Amtrak in their mission to provide safe, world-
class, environmentally conscious technology for their long-distance services," says Michael Cahill, president of Siemens Mobility's
North America rolling stock business.
Capable of speeds up to 125 mph, the locomotives will have 4,400 hp-capable, 16-cylinder diesel engines with modern control sys-
tems and A.C. propulsion. The diesel engine will come equipped with the latest Tier 4 emissions technology, reducing nitrogen ox-
ide by more than 89 percent and particulate matter by 95 percent, and provide an average of 10 percent savings in diesel fuel con-
sumption.
Delivery of the new locomotives will begin in summer 2021, with passenger service beginning in fall 2021. They will power trains
used on the Auto Train, California Zephyr, Capitol Limited, Cardinal, City of New Orleans, Coast Starlight, Crescent, Empire Build-
er, Lake Shore Limited, Palmetto, Silver Meteor, Silver Star, Southwest Chief, Sunset Limited, and Texas Eagle. All locomotives are
expected to be in service by 2024. Maintenance activities across the network will be supported by a supplemental multiyear Tech-
nical Support Spares Supply Agreement.
Amtrak is paying for the new locomotives through available funds and will comply with Buy American provisions. They will be
built at Siemens Mobility's rail manufacturing plant in Sacramento, Calif., a facility which uses solar power and employs more than
1,300 people.
Charger locomotives are currently operating in several state-supported Amtrak routes in California, Illinois, Wisconsin, Missouri,
Michigan, Iowa, and Washington.
The new locomotives will primarily replace the aging GE-built P40 and P42 locomotives, some of which have been in service for
more than 25 years.
A rendering of a new Siemens Charger locomotive ordered by Amtrak. The passenger railroad will receive
75 of the engines.
–From an Amtrak press release
Page 7 Northstar News January 2019
Volume 50 #1 Northstar Railway Historical Society January 2019
Could DFL Victories Bring Passenger Rail Improvements to Min-
nesota? Maybe. High-speed Rail? Probably Not. Pioneer Press - December 2, 2018
Plans for a second daily passenger train from St. Paul to Chicago could chug forward with
Democrats in control of the House and the governor’s office. Will talks for a high-speed
service also be revived? Gov.-elect Tim Walz is on board. He says passenger-rail expan-
sion could help accommodate a growing population and reduce carbon emissions.
The Minnesota High-Speed Rail Commission was formed in 2009 after years of study into fast train connection options in the mid-
west and the announcement of federal funds available for high-speed rail through the economic stimulus program.
Since then, a federal process identified the River Route as the preferred route for more frequent, faster passenger rail service. Our
friends and supporters sometimes took issue with the name - we weren't proposing "high-speed" rail, more like faster rail. And our
critics have never been fans of "high-speed rail".
With this feedback in mind, another state legislative session around the corner, and really, a different mission and vision for the com-
mission, we're undergoing a process to change our name and brand. Discussion began in earnest in September, action was taken in
November, a workshop was held in late November, and the commission is expected to finalize the name change at its Jan. 3 meeting.
Watch for an announcement coming in mid-January!
December 2018 Provided by John Goodman
Amtrak Personnel Changes.
Earlier this month, Amtrak's Executive Vice President - Commercial, Stephen Gardner, was given an expanded role as Senior Exec-
utive Vice President for Commercial, Marketing and Planning. Gardner's new responsibilities encompass oversight of Amtrak's
commercial, marketing, and strategic functions, which include product development, customer experience, planning, strategy and
research, government affairs, corporate communications, marketing, pricing and revenue management, state supported service, NEC
service, and the long distance network.
In October, Randal Barrows left his position as Manager of Charter Service and Special Movements to become Amtrak's Director of
Food and Beverage Information Systems.
Effective January 2nd, Missy Dukeman will leave the office of Charter Services and Special Movements to take a position at the
power desk.
Amtrak Empire Builder Ridership FY2018. From: Mark Meyer Date: Sun, 02 Dec 2018
Amtrak Long Distance ridership, FY2018
Rank Train Ridership FY2018 Change from FY2017
1 Empire Builder 428,854 -5.6%
mailto:[email protected]?subject=Re:%20Amtrak%20ridership%20FY2018
Page 8 Northstar News January 2019
Volume 50 #1 Northstar Railway Historical Society January 2019
Railway Age December 2018, Cover Story:
BNSF Railway Co. Executive Chairman
Matthew K. Rose will retire from the rail-
road in April of 2019, after 26 years of ser-
vice. At the end of his tenure, Rose will
have been Executive Chairman for six
years, and CEO for the prior 13 years. He
also served in senior marketing and opera-
tions positions at BNSF and predecessor
Burlington Northern before assuming the
CEO role in December 2000.
Matt Rose: “Less is NOT better”.
DECEMBER 10, 2018 William C. Vantuono, Editor-in-Chief
Railway Age selected Rose as its 2010 Railroader of the Year. “In the railroad indus-
try, where strong, focused leadership counts for a whole lot, [he] has led BNSF Rail-
way to new heights,” wrote Railway Age Editor-in-Chief William C. Vantuono in the
January 2010 issue.
“One of Matt Rose’s most impressive traits has been the ability to grow,” wrote the
late Larry Kaufman, a Railway Age Contributing Editor, in January 2010. “Like good
executives in any industry, he thinks long-term—five years and more into the future.”
“It was a very lucky day for me and for Berkshire Hathaway when I met Matt Rose,”
said Chairman Warren Buffett when Rose’s pending retirement was announced.
“Under Matt’s management, BNSF has become a major source of profit and pride for
Berkshire. And, as a citizen, Matt has been an exemplar for corporate leadership.”
Rose and Vantuono met at BNSF’s Washington, D.C. office in late November for a
wide-ranging interview in which Rose reflected on his career and talked about the in-
dustry’s future.
Vantuono: You joined BN as director of automotive terminals.
Rose: Yes. I actually came out of the trucking industry. I joined BN in 1993. We
merged on Sept. 22, 1995 with Santa Fe. The CEO, Rob Krebs, came from Santa Fe,
the smaller railroad of the two. When I was 38, Rob told me that he wanted me to be
the next CEO of the company. I laughed, and he said, “Why are you laughing?” I said,
“Because I’ve never run a railroad.” He said, “Well, I’m going to change that tomor-
row. You’re going to become the Chief Operating Officer of this company.” And I
laughed even more. Sure enough to his word, he did that, and then a year later he
named me President. Then a year later, on Dec. 7, 2000 he named me CEO. He stayed
one year, and then left. I really was not qualified in the least to run this railroad.
Vantuono: I remember you telling me about this conversation nine years ago when
you were Railroader of the Year.
Rose: Same story. Still wasn’t qualified!
Vantuono: How about now?
Rose: Oh, I’m qualified now!
Vantuono: Obviously! So, in the past 25 years, you’ve witnessed a lot.
Rose: I’ve thought of my career as having three different cycles. The first cycle was 2000. I’ll start with safety, as I always like to
do. We were really struggling with safety as an industry. A lot of derailments. People just can’t fathom the amount of head-on and
rear-end collisions, non-accidental releases, injuries, amputations and deaths that were occurring. Safety was not very good. And we
were not growing as an industry; we were really struggling to grow. It was the dot-com era. When I would go to Wall Street, all peo-
ple wanted to talk about was technology stocks, internet stocks. Everybody was going to point-and-click. No more bricks and mortar.
Everyone was going to buy stuff over the internet. The returns of the industry were mid-single-digits. And yet we were spending a lot
of capital. There was an enormous amount of frustration, with customers saying, “We’ve got to re-regulate the railroads.” But the
regulators, I think, almost felt a little bit of empathy for us because our returns were, quite frankly, subpar. And we would say, “Look
at all this money, and we’re only making 7.5% on our investment,” and so no harm was done.
In the second phase, safety was getting much better, and the investments that we were making were starting to pay off in terms of a
better-quality railroad to run on—rails, ties and ballast. Processes were getting better, and we were really seeing improvement in per-
sonal injury frequency, fatalities and everything else. We were spending a lot of money, and we were coming into a strong manufac-
turing growth cycle. A lot more business was coming to the industry. We started seeing fuel costs go up, and more customers wanted
to use us. Rob Krebs, quite frankly, had laid a real nice bedrock for us in terms of capital to expand, specifically the Transcon and the
Northern Transcon. We were seeing an enormous amount of growth from our trucking partners. All that point-and-click was really
paying dividends for the Federal Expresses, UPS’s and J.B. Hunts of the world. We were really in this growth groove.
Continued on next page:
https://www.railwayage.com/author/wvantuonosbpub-com/
Volume 50 #1 Northstar Railway Historical Society January 2019
Page 9 Northstar News January 2019
That traffic was coming to the railroad. Somebody’s got to move it, and we were moving it. Our growth curve started going up, and
we were spending, again, a really significant amount of capital. It was all working. But there was more regulatory oversight, and more
and more people were calling for changes.
And then we came into the 2011-2012 period where crude by rail really started hitting. The investments ramped up even more. And
yet, at that point in time, the regulators were basically saying, “Look at all the money these guys are spending to meet demand. This is
still really good.” Okay, returns were going up, but they were in the 10% to 12% range. We were still below the average return on
invested capital for American business. All that worked as well.
The third phase of my career in leadership is a little trickier, because now we’re seeing record profits and returns as well as sustained
growth. We’re seeing an industry that is starting to have discussions around, “I only want what fits on my network.. I only want to
provide service that fits on my network, based on a balanced view of my network.”
The railroads are still investing significant sums, but we’re starting to be goaded into lower capital targets by Wall Street, the sell-side
guys. They’re giving railroads kudos for saying, “Oh, I can spend capital as a percent of revenue.” That’s not the best measure. We
don’t spend capital as a percent of revenue. We spend capital based on gross ton-miles we haul.
Bridges don’t wear out with revenue; they wear out with units and gross ton-miles. So now, there’s this line of thinking out there
where some of the railroads are saying: “We can get our capital as a percent of revenue down to 15%.” Somebody else has said 13%.
And yet, railroads are making record profits.
And now we’ve also got political shifting of the sands. Here we are, the day after the mid-term elections. The House flips, and there
will be a new Transportation & Infrastructure Committee chair who may look at all this stuff differently. And so, the conversation is
no longer about revenue adequacy. We’re talking about investment and service.
I think we’re at a tricky time now. The Street—I’m talking about sell-side analysts—has been extremely aggressive with the publicly
traded railroads. They’re saying that less is better. Less capital is better. Fewer market opportunities are better. Fewer unit trains are
better. It’s all about lowering the operating ratio. I disagree with almost all of that. I truly believe that every industry, every business,
needs growth.
Vantuono: So you would say less is not better?
Rose: Absolutely. It’s not. Let me tell you why. If you go back to the 1980s, you saw where some railroads had a singular focus on
operating ratio. And the easiest way to reduce operating ratio is to take out track and reduce maintenance expenses. That’s really not
the covenant, if you will, we have with our regulator, the STB, and even public policy makers. The Staggers Act wasn’t, “Railroads,
haul only what you want to haul on your network.” It’s “Haul everything, and you have the ability and the flexibility to differentially
price on your network.” That’s the deal, and it’s in the public’s best interest to move more tons to the railroad network, not to move
tons off the railroad network.
So, I think we’re going into an interesting period where that will all be sorted out. I can’t tell you how it’s all going to work out, but
there’s going to be a lot of activity.
I think again, when I go back to 2000, I had a saying. I never said it publicly: “There’s really no such thing as a bad load of freight.”
We need to find the right operating expense to haul it, but we’ve also got to find the right price to haul it. We didn’t go around shoot-
ing down freight, because we saw this industry in the ’90s lose enormous amounts of market share to truck. I believe that, when we
fast-forward 10 years in the future, we may not be saying that there is no such thing as a bad load of freight. But I do think we will be
wanting to find ways to expand our offerings to bring more freight to the railroads. I just don’t think you can shrink yourself into a
virtuous-cycle model that works. Continued on next page:
Volume 50 #1 Northstar Railway Historical Society January 2019
Page 10 Northstar News January 2019
BNSF’s mission has simply been to provide a great service through the heartbeat of the railroad—capital investment. Expand the
railroad. You see every year that we do expansion in our company, and then provide service that’s going to get more customers to
use our railroad in more locations.
There was an article in the Wall Street Journal that’s instructive about supply chains. The point was that customers are moving their
manufacturing facilities closer to their users because of high transportation costs. They aren’t fingering the railroads or trucks. It’s
just higher transportation costs, driven by higher fuel costs, driven by congestion and all these things.
We’re going to have to find ways, as an industry, to continue to grow. If there’s one thing that I think will impede the progress of the
railroads, it’s lack of growth. We’ll get a little confused in the meantime because we’ve got crude by rail rolling because the pipe-
lines aren’t in. Coal is still moving at a rate at which we are all a little surprised.
But long-term, we’ve got to find ways to grow outside these commodities, and it’s probably going to be modal conversion, i.e.; in-
termodal. That’s going to require really strong maintenance and expansion capital, and service offerings that are available to every-
body.
Vantuono: Since BNSF became part of Berkshire Hathaway, you haven’t had to answer to Wall Street. Would you say that’s been
an advantage?
Rose: Yes. When we did the deal in 2009, I told our management team that it would probably take us 10 years to look back and say
whether or not this was a good experiment. And by that I meant, could we outperform vs. being a standalone company? And I think
the answer is yes. Why is that? Warren has given me, personally, tremendous flexibility to run the company. He’s been very interest-
ed in our returns, and we have done a good job for him.
They’ve got a couple basic philosophies. Charlie Munger, who’s Warren’s right-hand man, says, “We don’t have to make the last
dollar.” Warren talks about this in his annual letter. He says that we make these investments with the belief that the future regula-
tor—not the regulator who’s there today, the regulator who’s there tomorrow—will take all this into account. I simply call it the un-
written commitment. That is, we spend enormous amounts of capital on these networks, and we get a regulator who allows us to pro-
vide good returns. All that’s worked, I think, pretty well.
Vantuono: How do you view hedge funds coming into our industry? Do you think it’s been beneficial, or not? Is the hedge fund era
over, if there was a hedge fund era?
Rose: When we were publicly traded, I would go to sell-side conferences. It used to be me with investors and sell-side analysts. And
then it changed. The meetings got larger. There’d be 20 hedge fund analysts; they all seemed to be under 30 years of age. Creating
transparency about how you’re doing versus another company, and the old spirit of how you’re running your company versuss
somebody else, I think that’s fine. But when a hedge fund says, “I really want to know how you’re going to do next quarter” on a
railroad that is making 30-, 40-, 50-year-long asset investments, it’s really not consistent.
The day after we had our shareholder meeting, and the shareholders voted 97% in favor of the Berkshire Hathaway transaction, it
was snowing in Fort Worth. I’ll never forget. I called Warren, and I said, “Okay Warren, you now own a railroad. Congratulations.
What do you want me to do? You want me to come to Omaha and bring a power point and show you what our next five-year plan’s
going to be?” And he said, “No. I want you to run this company like you own it, and you’re going to be in charge of it for the next
100 years.” And I don’t think that’s consistent with a hedge fund wanting to know what the next quarter’s going to look like. When
you think about getting back to the customer, and working with the markets and customers to grow your business, these are not nec-
essarily 10-year opportunities, but they’re not something that always shows up in the next quarter, or even in next year’s numbers.
Stock prices have certainly benefitted, if you look at the market caps of the railroads. It would be hard to say that there hasn’t been
an enormous amount of shareholder value. But that’s just one of three elements of the value proposition.
Vantuono: Do you think shareholder value is misinterpreted? Or there’s too much emphasis on share price? Continued on next
page:
Volume 50 #1 Northstar Railway Historical Society January 2019
Page 11 Northstar News January 2019
Continued from previous page:
Rose: Yes. We’ve always looked at the value proposition of the railroad as a three-legged stool. Shareholders are a very important leg
of that stool because they provide the capital for us to make investments. The second leg of the stool is the employees. They provide
the services that allow us to make the investments that allow us to make the returns to provide to the shareholders. And then finally,
there are the customers. People are always asking, “What’s the most important?” Well, they’re all important. And if you think about a
three-legged stool, if one of those legs gets a little out of whack, things don’t work very well.
Vantuono: So, you believe that you’ve got to have a balance. The three legs should be more or less even?
Rose: Right. You have to be worrying about all those constituencies. And if you’re not, bad things are going to occur. You would
think that as the railroads become more profitable, by however measure you want to look at it, service would actually improve. And
I’m not sure we’ve seen that. I think we’ve seen, actually, a degradation in overall performance of the rail network in general. The
litmus test would be things like ISAs (Interline Service Agreements), which nobody even talks about anymore. You would think these
would be working perfectly with more people going to Precision Scheduled Railroading. You would think Amtrak performance
would be at an all-time high. You would think commuter rail performance would be at an all-time high. They’re not.
I’m not sure that higher shareholder value has resulted in a significant improvement in the railroad network. Employees have done
okay. We’re a smaller network. But if you look at BNSF’s major productivity gains through the years, it’s mainly been through attri-
tion, which I think is helpful.
I think that balance is going to be really important going forward. And again, it gets back to that unwritten commitment that we have
with the regulator that will, I think, come a little more into light. A little bit has to do with the politics. I assume the new chair of the
T&I Committee will be Peter DeFazio (D-Ore.). He is an extremely capable and insightful person who’s been around a long time. I
assume he’ll have a very keen interest in passenger rail. He’ll have, I think, a very keen interest in making sure the freight railroads
are implementing this three-legged stool to make sure it’s working for all the constituencies of the railroad industry—not just the sell-
side guys.
Vantuono: I wanted to bring up the subject of mergers. Do you care to comment? There’s a lot of rumor mongering, which I’ve con-
tributed to! What do you think?
Rose: Here’s what I’ve said for 20 years. Same two issues. I believe that we will have mergers when, one, a big railroad gets in trou-
ble financially, or two, the economy is growing at such a rate that we need more rail capacity.
I do believe you can get more rail capacity through mergers. But I don’t think a railroad’s going to get in trouble financially. And I’m
not sure the marketplace is ready to accept the fact that we just need more rail capacity when railroads appear to be reducing capital,
not increasing it, and the types of returns we’re having.
The third piece, which is also really instructive, goes something like this: The market caps of the railroads have grown tremendously.
CSX is actually worth more than what BNSF was worth when Warren bought it, almost by double. The market cap of Norfolk South-
ern is worth more than what Warren paid for BNSF. So, when we think about it, how do you do the construct of a merger? You start
off with cost synergies. If you go back and look at the history of the mergers—SP-UP, BN-Santa Fe, the Conrail split with CSX and
Norfolk Southern, CN-IC, etc.—you basically start out with four, five, six, or seven hundred million dollars of cost synergies.
We call it the Noah Ark’s syndrome. You don’t need two CEOs. You don’t need two presidents. You don’t need two CFOs, etc. So
you come up with a lot of cost synergies. You’re able to reduce some terminals, but that’s in that five, six, seven hundred million dol-
lar a year number. And then you have revenue synergies. Well, how much more revenue can you add when you no longer have inter-
changes, like between the BN and Santa Fe? The answer was, we were able to grow revenue quite a bit, okay? But still, those num-
bers, I would tell you, are the billion-, billion-and-a-half type of synergies—costs and revenue synergies that you would put on the
bulletin board and say, “By merging these two companies, this is what we can get.” Continued on next page:
Page 12 Northstar News January 2019
Volume 50 #1 Northstar Railway Historical Society January 2019
Continued from previous page: What people aren’t talking about is what you’re going to give up. We know what you’re going to get.
I’ve done this a lot. I’ve done a merger analysis on every railroad out there. What we don’t know is what we’re going to give up. What
I’m talking about is that I don’t think that the industry is going to be allowed to consolidate without a huge change in regulatory poli-
cy. The Justice Department is in a much different place today, even though it’s not the primary overseer of railroad mergers. I think
public policy is saying that more concentration, bigger companies are not necessarily better.
And so, I can’t imagine anybody proposing a big transaction today without a full and complete overhaul of the regulatory tenets that
govern this industry. Things like reciprocal switching. There’d likely be a reciprocal switching aspect to it. With a reciprocal switch
rate in the hundreds of dollars, not thousands of dollars or something like that. It would be very minimal, like what there is in Canada
with the competitive line rate. I think that would likely come to us. I think of exemptions right now that the STB doesn’t oversee, a
large chunk of railroad commodities. You’d have the STB looking over a lot more commodities than they do today. I believe revenue
adequacy standards would change.
The point is that there’d be a lot of change. And none of us have put any of that into the model. The final piece that I think that people
will be shocked about is—and this probably isn’t the right phrase—is community and environmental concerns. In the BN-Santa Fe
merger, we got through with very little of that. The SP-UP got through with a little more of that. The Conrail split was really the first
time where we started seeing cities saying, “Wait a minute. You’re going to reroute these trains, we want this, we want that,” and so
on.
The CN-Elgin Joliet & Eastern merger: That one hit a stride. The STB stipulated, I think, about $240 million for grade crossings. It
was a very small railroad. And Hunter [Harrison] sued the STB and lost. And then he sued in federal court and lost.
My point is that the next big merger will have enormous environmental and social costs. I just don’t think anybody’s thinking about
this. I may be tone deaf to it, but I don’t see it.
There’s no doubt about it. The investment bankers are spending nights awake doing all their little models, trying to figure how much
money they can make off fees by getting a big railroad transaction. These numbers have gone up in orders of magnitude compared to
where they were when we did the last round of mergers. And at the end of the day, you have to ask what I call the big question:
What’s the point? And I haven’t heard anyone say, “Well, it would be much better for employees; it would be much better for custom-
ers.”
Let’s just take a big railroad buying a smaller railroad, with a 20% or 30% premium. How are you going to pay that premium? Again,
I could almost guarantee there are going to be five, six, seven hundred million dollars in cost synergies. Revenue synergies, maybe
another billion. But the question is, how are you going to pay for that? The STB, and public policy in general, I think, could come in
with rate cap levels. That would prevent the parties from extracting the value to pay for the merger. So I don’t see it. I think it’s just a
bad financial deal, and I think the unintended costs that would come from this would be enormous: environmental costs, regulatory
rollback.
Vantuono: That’s saying, in financial terms, “unintended consequences?”
Rose:: Absolutely. I don’t think any investment banker understands that side of it, of what it would cost.
Vantuono: Let’s talk about Amtrak. We’re asking the question, is it a failed public enterprise experiment?
Rose: The question is, what’s the litmus test of success? Or failure? And if the litmus test is to be profitable, yes it’s probably a fail-
ure. But you put that same litmus test against any commuter rail operation, any highway project, any public transit system also fails as
those things don’t make money. Public policy needs to determine who pays for this stuff, and what is the role of Amtrak. It’s not for
the railroads to determine, and quite frankly, it’s not for the Amtrak board to determine. Do we want a national system? Do we want
just a regional system? What is the value of having passengers being able to utilize that system in the middle of North Dakota? If
you’re living in the state of North Dakota, it’s a high value. If you’re living in L.A. and want to get to Chicago, it’s probably not a
huge value. Continued on next page:
Volume 50 #1 Northstar Railway Historical Society January 2019
Page 13 Northstar News January 2019
Continued from previous page: That’s what it all comes back to. We’re only going to talk about transportation policy a certain num-
ber of hours and days in Washington, right? There’s only so much you can talk about. If you look at the amount of time that we
spend on Amtrak, it’s out-weighed versus the cost of Amtrak. Even in the budget. When the President puts his budget together, and
the Congress puts its budget together, they’re always debating whether it’s going to be a billion-three or a billion-five or a billion-
eight for Amtrak, in a DOT budget that’s hundreds of billions of dollars; a national highway system that’s investing $100 billion.
So much of this focus, because of the political nature of Amtrak, is on this investment. And so I would say a couple things. Public
policy needs to determine, do you want, long-term, to have a national passenger railroad network? If you do, then you need to pay
for it.
Amtrak is not getting enough capital to renew its long-distance trains. And over time, you’ll have more and more service failures,
you’ll be clogging up the national railroad network. That’s just the way things work when they age out. Some would argue that
there’s probably a lot of money that instead could be spent in the Northeast Corridor to provide a lot of value for this economy and
all the various states around it.
I don’t think it’s for the railroads to make that decision at all. As long as Amtrak runs the national network, our job at BNSF is to run
it as a premium service, which we do. That is what we’re instructed to do. And we’re always going to try and do everything we can
to meet the performance standards.
Vantuono: Hypothetical scenario. Suppose the government were to come to you and say, “We’re dismantling Amtrak. We need a
new business model. BNSF, we want you to run the long-distance trains, or corridor trains, and we will pay you, in some form, your
avoidable costs. We’ll help you pay for capacity improvements. The object is not for you to make a profit. The object is to provide a
service. And you could put the BNSF name on those passenger trains.” I’ve talked about this before. Do you think it could work?
Rose: It all depends on for what they would reimburse us, at what rate. We would look at it and say, “Okay what’s the alternative?”
If outside operators were going to come in, we’d be concerned that they wouldn’t respect the same railroad operating rules and ca-
dence that Amtrak does, and that we wouldn’t have the same liability structure that we have with Amtrak. We’d probably look at it,
out of defense more than offense.
I don’t think that anybody makes money anywhere close to the current rates that are being charged today on a nationwide Amtrak
route. But again, that’s not the question that should be asked. The question is, how much are we willing to pay for that public trans-
portation service?”
One thing we do appreciate about Amtrak. They really do conform to our safety rules. That is unbelievably important to us.
Vantuono: What’s your view of private passenger train operators?
Rose: I think they’re fine, as long as they have rail experience and they understand the operating rules. And in a lot of cases, they’re
going to be operating with PTC. But again, this isn’t something you just all of a sudden decide, without the experience.
Vantuono: BNSF, even before your tenure, has been a technology leader, pushing the envelope. Where do you see technology head-
ed? Let’s just talk a little about autonomous or semi-autonomous trains.
Rose: When we think about what’s going on around us, again, how do we grow our business? We grow our business by having more
opportunities with stuff that’s on the highway. We have to look at what’s going on with our largest customer, and largest competitor,
the truck. We see them very aggressively moving toward autonomous platooning. If they just did platooning, how much market
share could that cost us? If they did platooning with autonomous, how much market share can that cost us? If they did platooning,
autonomous, and battery operated Class A tractors, how much can that cost us?” And then, if you look long-term, it’s no longer a
stool; it’s a chair. The fourth leg of that chair? They no longer have to pay their true fair share of the national highway system. It’s a
bleak picture for us. Continued on next page:
Volume 50 #1 Northstar Railway Historical Society January 2019
Page 14 Northstar News January 2019
We have to do a couple things. One, we have to figure out how we can keep up with them on productivity. We believe with all of our
hearts at BNSF that the term should be “attended automation.” With that, we believe that there is a long path with a certain number of
trains, with PTC, that you can automate the left seat of the locomotive. It’s not for every train on our network. For us, we don’t be-
lieve that you do this where you’re not running PTC. And that’s not a uniformly held belief in our industry.
We also believe in the principle of user pay. We’re not asking for the public to pay for our private railroad, and we don’t think that
longer, heavier trucks not paying their fair share is an equitable argument. We’re going to be really strong and always coming back to
those principles that trucks should pay their fair share on the highway. And that means user-pay systems, whether it’s commercial
VMTs (vehicle-miles traveled) or a weight/distance fee, like what’s going on in Oregon. Interesting, right?
Vantuono: Battery-powered trucks are not going to be contributing to motor fuels taxes, and they’re still going to be wearing out
bridges and pavement.
Rose: That’s why a VMT. We’ve got a path to a commercial VMT on the highway system. And we’ve also got to look at alternative
fuels for our locomotives. We tested LNG, and we don’t see the spread between diesel and natural gas wide enough to justify us mak-
ing that investment, and it’s a significant investment.
For us, it’s probably $8 billion to $10 billion. We don’t see the returns of doing that. So we’ll open the next chapter of our book—
battery operated locomotives. And we’re looking at different tender configurations, and working with suppliers on who we think
could provide us with some unique battery technology development.
Long-term, I think we will head toward some kind of carbon pricing. ExxonMobil, the largest oil company in the world, is floating a
carbon tax idea. It just feels like, long-term, we’re going to put a price on carbon, and the railroads need to be there step-by-step with
the trucks on productivity, user-paid systems and alternative fuel sources for locomotives. If we don’t, we lose more market share. If
we do, we’ll actually get more market share. Because pound for pound, ton for ton, we will always be the most efficient and potential-
ly the best on carbon pricing, environmental impact, and highway congestion impacts when you look at how to move freight through
this nation’s supply chain.
Vantuono: LNG can work in certain operating scenarios, like Florida East Coast. But that’s a small, captive system, and they’ve got
their own LNG supply. They set up their network very well, as far as I know. To try and institute LNG on a big system like BNSF
with interchange locomotives and fueling stations?
Rose: It’s gnarly. But battery-powered locomotives? They create a lot of electricity going down the track. That energy all dissipates.
We haven’t figured out how to capture that electricity. That’s what we’re spending a lot of time thinking about.
Vantuono: What about electrification? This has been talked about in the past. At one time BNSF was looking at it, where the elec-
tricity is generated via huge wind farms out in the Rockies, for example. And you use the right-of-way for a power grid, and then tap
off that grid for traction power.
Rose: We looked it at in New Mexico and West Texas. We actually looked at putting a DC line underneath our right-of-way. The
capital didn’t pencil out. Could it eventually? Maybe. But I believe that battery technology is going to really improve. Look at what
the automotive guys are doing. The problem with the railroad industry? We think it’s very large, but it’s actually a very small market
for one of these guys. If you’re a battery guy, you’re going to see the automotive industry as this enormous market. You’re going to
see the trucking industry as a much smaller market. You look at the railroads and you see an even smaller market. We can’t just wait
for this to come to us. We have to go out and partner with suppliers to bring it. That’s been a trademark of BNSF. It’s what we did
with PTC. It’s what we did with AC traction locomotives. And I think it’s reasonable to think that we will do it with battery, too.
It’s game on when you see how much money Toyota, Ford, General Motors, Volvo, etc. are putting into this stuff. We have to stay up
with that, and we must find suppliers willing to address it and be paid fairly in our much smaller market.
Continued on next page:
Volume 50 #1 Northstar Railway Historical Society January 2019
Page 15 Northstar News January 2019
Continued from previous page: Vantuono: Big Data. That’s become sort of a buzz word in this industry. mainly on the engineering
side. You collect all this data. What do you do with it? How do you manage it, put it to good use?
Rose:: We’ve got thousands of wayside detectors out there. The tr ick is to take all that data that comes in every hour and to
string it into a manageable set of information. We’ve partnered with IBM on some of that stuff. We’re doing some testing right now
with a Silicon Valley company, and they’re looking at actual detection data. We’re working with the FRA. We’ve got autonomous
inspection vehicles running up and down our railroad everyday.
Vantuono: You’re now using drones for bridge inspections.
Rose: Yes, we are, but the real impact is with the collective total of all of our inspection technologies. The existing regulatory struc-
ture isn’t real accommodating to all this technology. And so we’re working with Administrator [Ronald] Batory and his staff on how
to use more of it, instead of putting people in harm’s way to do inspections. Take inspecting track, for example, Instead of a hi-rail
vehicle that puts our employees in harm’s way and relies on visual inspections, we’re using an autonomous inspection car that up-
loads the railroad data and really gets to see the defect ratios. The FRA has accommodated a demonstration of that.
I think we are in the second and third inning of the technology impact to this railroad industry. We’re going to see a lot of stuff with a
fully implemented, integrated PTC network, starting with more efficient train operations and moving toward automated autonomation
in the locomotive. With just PTC, we already know we’re running a much safer railroad. PTC is not the be-all, end-all for safety, but
we are seriously a much safer railroad.
But we’re still reading out train orders. So we’re working with the FRA on automatic directives that will, we think, create a safer,
more efficient railroad.
Longer-term, as we think about PTC, the next piece of that is movement planning. We’ve been working with GE on that over the past
couple of years. We’re going to start rolling that out next year. Movement planning, if you think about it, will automate a lot more of
the dispatching decisions. And because there’s so much data, by harvesting this information, we believe that with the right algorithms,
a movement planner can make better decisions than having to make sure you have a dispatcher with 30 years of experience to make
that decision.
And then, even longer-term that leads us into changing the fixed blocks within the signal system, and reducing train spacing.
Vantuono: Moving-block?
Rose: Yes. We’re looking at several different ways to do that. But if you think about the capacity implications of that, it really is sig-
nificant. And if you think about the railroad flowing with better fluidity, you then have more regular maintenance windows. Safer,
with lower costs. We’re just really in the first couple of innings of the baseball game on technology adoption and implementation.
And it’s really exciting. I think in 10 years, we won’t recognize a lot of things today that we’re doing.
Vantuono: You must be a baseball fan, because you’re using a baseball analogy. What’s the grand slam for this industry? It doesn’t
matter what inning it comes in, though it may come in the bottom of the ninth with the score 3-0, the bases loaded, two outs, three
balls and two strikes.
Rose: It won’t come like that. It’ll come over time. It’ll come with attended automation, moving block and movement planner. With a
battery-operated locomotive. If policy makers put a price on carbon. With a highway system paid for by users, and a regulatory agen-
cy that, as long as we are making these significant capital investments, will allow us to make double-digit-type returns.
That’s the virtuous cycle that you heard me talk about. We’ll be attracting more business, we’ll be making higher returns, and we’ll be
using that money to make more investments in addition to giving it to our shareholders. And regulatory oversight that will say, “Yep,
this is all working really well.”
Continued on next page:
Volume 50 #1 Northstar Railway Historical Society January 2019
Page 16 Northstar News January 2019
Continued from previous page:
Vantuono:: I know you want to talk about this industry’s future leaders.
Rose: In 2000, when I became CEO, I inherited a company that had an average age of 49. I’m talking about our exempt workforce.
And I thought to myself, boy everybody’s going to be retiring here. And here I am, I’m 40 years old. I may have to be here for a
long time. Generation X and Y were coming in; this was before the Millennials. They didn’t really appear to be fascinated with a
militaristic command and control style of organization. They were more about looking at different opportunities. We adopted and
developed what we call the BNSF Leadership Model. The executive team worked through the leadership team, and we installed it. It
was a typical deal where most of the organization said, “We cannot do this. This , too, will go away.” And I remember telling every-
body, “This is going to take 10 years,” because when you start talking about affecting culture, it really is a long-term deal.
We started helping people understand what was good about leadership, the how and the what. The what was what we wanted people
to achieve. And the how was how you accomplish it. We couldn’t just see people’s results. We also wanted to see how they accom-
plished those results. We had an enormous amount of effort put into development of our people. We believe strongly that developing
people from within is a much better strategy than having to hire people from the outside—not that we’re against it, and I have per-
sonally done that at senior levels. But we think development is huge, and cross-fertilization is very instructive.
As I leave, Carl Ice is there. He’s been a part of this, walking with us every step. The Leadership Model is now embedded into our
organization, like the safety culture. When we think about developing the leadership after Carl, we are really pleased with what we
have and what we see in terms of future leadership. A great example is Katie Farmer being promoted to Executive Vice President
Operations. She’s been with our company for 25 years. It’s really great to see the highest-ranking woman in the industry working at
BNSF. We’re really proud not only of Katie but of the whole leadership team that will be there after I retire, and eventually when
Carl retires. It’s a team that’s well-positioned for the next 100 years.
Vantuono: What’s next for Matt Rose? What do you want to do? (Rose will turn 60 next year). I think of 60 as the new 50, or the
new 45. Where do you see yourself?
Rose: I’m not going to do another CEO gig. I’m fascinated with the public policy space. And I will find a way to stay involved in
that, in one form or another. I may look at some opportunities in private equity in the logistics space.
When I step back and think, 20 or so years of working with Carl and leading this company, it’s been an incredible honor. But there’s
also a grind to it. There’s not a day that goes by—and this will sound awful to a lot of readers—there’s not a morning that goes by
that I don’t wake up early in the morning and check my phone to see if we’ve had an accident or an incident, making sure that none
of our employees were harmed, or that nothing bad happened in one of the communities in which we operate. That’s the downside of
the operating environment, with 34,000 grade crossings and 45,000 employees. Stuff always happens.
So, I’m looking forward to not having to have that burden of leadership so intensely, day to day. But honestly, I don’t know. I’m not
going to rule anything out. I’m just going to keep my eyes open.
Volume 50 #1 Northstar Railway Historical Society January 2019
Page 17 Northstar News January 2019
Picture Page.
#261 powers the Polar Express at St Paul Union Depot. This always sold out and popular holiday celebration made its 200th run
this year.
#261 at SPUD –Troy Francen Cast of characters & volunteers delight the children -Brandon Smith #261 at SPUD –Jeff Terry
Destination is Santa’s Workshop! -Brandon Smith Photos
Canadian Pacific’s Holiday Train Makes Another Appearance in the
Twin Cities.
CP Holiday Train –Brandon Smith CP Holiday train in Twin Cities –Brandon Smith Holiday Train at SPUD –Jeff Terry
Railfan Events (Thanks to Rick Krenske, Bill Dredge)
_________________________________________________________________________________________________________________
Northstar News
1515 Creek Meadow Dr NW
Coon Rapids MN 55433 3768
Address Correction Requested
Page 16 Northstar News January 2019
Hennepin Overland Open House Holiday
Schedule
Dec 22 2018, Jan 12 2019,
Feb 8 2019, March 9 2019,
April 13 2019
1pm—4pm,
6pm—9pm night trains
2501 East 38th Street
Minneapolis, MN 55406
(612) 276-9034
$7
Family $20
Greater Upper Midwest Train Show &
Sale
Saturday Feb 2 2019
9 AM—-2 PM
Century College
West Campus 3300 Century Ave. N.
White Bear Lake, MN
$5
Granite City Train Show Saturday April 13 2019
9 AM—-3 PM
River's Edge Convention Center
10 4th Avenue South
Saint Cloud, Minnesota 56301
$6
Randolph Railroad Days 2019
(14th Annual)
Saturday March 23rd and
Sunday March 24 2019
Randolph High School, Rail yards, and Museum
29110 Davisson Ave
Randolph, MN 55016
$6
International Toy Train Expo July 6 2019
July 7 2019
10 AM—5 PM
Chippewa Valley Expo Center, 5150 Old Mill Plaza,
Eau Claire, WI 54703,
$10
Model Train Show April 6, April 7th 2019
10 AM —- 4 PM
First Presbyterian Church
1225 4th St - Fond du Lac, WI 54935 $6
Volume 50 #1 Northstar Railway Historical Society January 2019
Night Trains Continue into the 2019 Season.
Every Saturday evening from 6:00 to 9:00 pm through the last Saturday in February
(Saturday, February 23rd, 2019). Admission $15 for Individuals
http://www.hennepinoverland.org/directionshttp://www.hennepinoverland.org/directionshttp://www.bing.com/maps/default.aspx?rtp=~adr.44.52684,-93.0225http://www.bing.com/maps/default.aspx?rtp=~adr.44.52684,-93.0225