GM looking to sell EMD - Dodge Diesel

DieselDaze · 05-31-2004, 01:40 PM

While it may not be truck related, I thought GM was doing ok with its EMD's... hmmmm, I guess maybe not eh?

Quote:

GM Holds Talks to Sell Illinois Locomotive Unit

By LEE HAWKINS JR.
Staff Reporter of THE WALL STREET JOURNAL
May, 2004

General Motors Corp. has had discussions with at least two companies
to sell its Illinois-based locomotive and diesel-power engine
business, according to the head of the Canadian Auto Workers union.

CAW National President Buzz Hargrove said GM is in discussions with
Caterpillar Inc., and confirmed that GM has also had talks dating as
far back as late 2003 with Greenbriar Equity Group, a private-equity
firm led by the former Chrysler Corp. Vice Chairman Gerald Greenwald.

Word of the possible sale of the business, called Electro-Motive, and
GM's discussions with Caterpillar and Greenbriar were first reported
this week by the Detroit Free Press.

Mr. Hargrove said the union met with GM and Greenbriar around
Christmas, and that Caterpillar has only recently entered the picture.
He said the GM business could be sold soon.

GM declined to comment and a Caterpillar spokesman would not confirm
or deny the report on Thursday. Mr. Hargrove said he would oppose any
sale to Caterpillar, and that he has made that fact known to GM.

"I'm opposed to any sale to Caterpillar because of their record on
labor-management relations," Mr. Hargrove said, citing previous plant
closures in Canada and some of the company's past relations with the
United Auto Workers union. The CAW has about 3,000 workers at
Electro-Motive facilities in Canada and Illinois.

"GM has the right to sell their business. We don't have any options in
that," Mr. Hargrove said. "Our collective agreement would have to
continue until September of 2005. But we have made it clear that we
won't be happy campers and that it will not endear us to GM if they
were to force Caterpillar on us."

He was less critical of Greenbriar, saying the union had good
relations with Mr. Greenwald when he worked as a vice chairman at
Chrysler. "We've had some disagreements with him going back to the
'80s, but we had respect for him and he respected the union," Mr.
Hargrove said. "His history is much different than Caterpillar's."

Based in LaGrange, Ill., GM's Electro-Motive business builds high
horsepower engines for boats, locomotives and oil rigs. The locomotive
operation is a noncore business, and a sale may be in line with a
broader effort by GM to shed some noncore businesses in order to focus
more intently on auto making.

Rich

induchman · 05-31-2004, 01:55 PM

Selling it b/c it's not making money?

PeteRR · 05-31-2004, 02:13 PM

Shareholders and analysts like a company to concentrate on one product. It's easier to value the stock that way. Some companies feel the pressure to sell off product lines and subsidiaries for that reason.

DieselDaze · 05-31-2004, 02:50 PM

The article did not get into why GM was selling, but made it sound like they were definitely dropping EMD. It just seems to be a question of who will pick it up.

I can understand shareholders wanting a business to keep it simple for purposes of stock value, but like I said, I thought EMD was making money? Isnt that also a top priority for shareholders?

Oh well, Ive never even been close to affording blue chip stock. I guess I just have to continue reading about it in the papers.

Rich

Jeremy Cusick · 05-31-2004, 04:00 PM

I see history repeating itsself here. There once was an Agriculture manufacturer called International Harvester...

Dieseldude4x4 · 06-01-2004, 01:04 AM

We have three of their 20 cylinder models for emergency power at work. They are a real simple engine to work on and are very dependable. Ours are 1970 models and do very well for what we need them for and they sound sweet too. However, we had a 3612 Cat put in about five years ago for loss of offsite power and it is smaller, makes another 1000 horsepower, is only a 12 cylinder, and it was half the cost. Somebody isn't doing something right.
There was a lot of thought went into that EMD engine like being able to change out a bad power pack and put it right back on line. I went to their plant in LaGrange and it was pretty cool too, especially how they friction welded the valve stems to the valves. But, I also saw a few things at the factory that I would say could cost them money. When I was there in 86, they had already gone from four to five locomotives a week to two.

induchman · 06-02-2004, 07:30 AM

Who is buying locomotives these days? Amtrak, UPBNSF and CPCNR aren't.

DieselDaze · 06-02-2004, 02:33 PM

Looks like both APR (Alaska RR) and CSX are still busy purchasing new units:

From AlaskaRails.org: http://www.alaskarails.org/news/ARR-news03_2.html

Quote:

The contract is signed with EMD on the eight SD70MAC-HEP locomotives and EMD is receiving material for the manufacture of those units. Schedule is for April release in two groups of four. All eight SD70's will be assembled in London, Ontraio. EMD is not using satellite shops at present. The Alaska Railroad is tacked onto a 75 unit CSX order.

BNSF are ordering new power. However, they seem to be ordering from GE.
I understand BNSF just ordered 64 new AC4400CW's (Road numbers are 5694-5695-5742-5743-5741-5739-5740).
They can be seen leaving the yard HERE

Also, CP, and NS have ordered new power from GE:
CANADIAN PACIFIC RAILWAY has ordered 41 new AC4400CW’s from GE in Erie, PA.
These new 9800-series GE’s are expected to arrive mid-year 2004, following the BNSF, CN (and possible NS) orders.

Also, from railroadforums.com:

Quote:

Kansas City Southern soon will begin testing two Electro-Motive Division (EMD) SD70ACe locomotives during a 60-day pilot, reports Progressive Railroading.

KCS plans to use the locomotives in revenue service, or as helper units or distributed power, between Pittsburg, Kan., and DeQueen, Ark., or Shreveport, La. EMD officials chose the Class I to conduct the pilot because of the line's grade elevation and train-weight challenges, KCS said.

EMD plans to begin production deliveries of the locomotive in January 2005, when Tier 2 regulations take effect

Amtrak is also on a buying spree, but again, its not from EMD.

Quote:

Wabtec Corporation of Wilmerding, PA has announced a $12 million order from Amtrak for 10 MP15B switcher locomotives

You can get the full story HERE .
Its in PDF format.

Rich

mrb321us · 06-04-2004, 01:30 PM

General Electric also manufactures locomotives and that business is profitable for them. However GE has a more diverse culture than GM since since their logo appears on everything from a $19 clock radio to multi-million dollar MRI machines, jet engines and, of course, locomotives.

Redleg · 06-04-2004, 01:51 PM

http://www.michiganrailroads.com/Mic...oupFrameLP.htm

CoastalDav · 06-07-2004, 02:28 PM

It may be that EMD's being large two cycle diesels have no market with todays larger 4 cycle diesels that CAT makes.

Being around the marine market, all of the two cycle 71 seris diesels once removed are sold overseas. New boats built in the US, can't have two cycle diesels installed unless they met the tear 4 requirements of the E P A. We are installing two Detroit Diesels in a 64ft aluminum boat and removed two 12V71 TI's.
The 12V71's with gear attached wet are around 6,000 lbs @ 550hp. The new Seris 60 GM Diesel with 740hp with gear wet is 4770lbs. So wer're replacing 12 cylinders with 6 and adding almost 200 more hp and loosing a bunch of weight.

GM Diesel is owned by DC, and the GM diesel is actually a German MTU diesel painted green.

Dave

Iron Mike · 06-07-2004, 04:41 PM

This is nothing new. GM tried too sell EMD along with the Detroit Diesel line, back when they sold DD too Penske. Penske didn't want anything too do with it though. They only bought the DD line as I understand and personally I think they did some wonderful things with the 60 series. I to have worked on the 567 series and the 645 series engines. Even on some 567E1DF's. They were a factory dual fuel. They were all a very simple design. Kind of like an overgrown 71 series. EMD does make a 4-cycle, I believe it is the H series. It did away with a lot of the simplicity though. Just my .03 .

DieselDaze · 06-07-2004, 05:04 PM

From what I read on other forums, it sounds like EMD provided a better product, but GE could provide (a lower quality) product faster and offered better financing arrangements.
Thus, this may be an issue where quantity out did quality.

Rich.

nickleinonen · 06-09-2004, 11:09 AM

Quote:

Originally posted by DieselDaze
From what I read on other forums, it sounds like EMD provided a better product, but GE could provide (a lower quality) product faster and offered better financing arrangements.
Thus, this may be an issue where quantity out did quality.

Rich.

at work, we have both the GM/EMD loco's and the GE loco's. the GE's are more reliable than the gm's. the ge's get more electrical problems, than the gm's, but the gm's get more mechanical problems than the ge's. engine wise, we will change out a ge powerpack 1x for every 50x emd power pack. the gm is dead simple, but they are overworked. the ge engine makes more hp, and can make even more [our ge rep says that ge has a 16v7fdl engine on a bench making 6000hp and has been making that for about 2 years straight, and the normal version only makes 4400hp]

that being said, i still like working on both engines, and for driving them around, the gm's seem to pull more down low [i'm only allowed to drive them at low speeds around the shop tracks when needed] than the ge's. but they both seem to load the same amount in 1st notch [±250 amps]

DieselDaze · 06-09-2004, 11:33 AM

Nick,
You may be correct.
As I stated, I was drawing a conclusion based on what I read on other train related web forums and not first hand experience.
Thanks for the info and insight.

Tell your management that you need to take that yard engine out once a week and get her "up to speed" on that main!

Rich

05-31-2004, 01:55 PM	#2
induchman Registered User Join Date: Oct 2003 Location: on the road again Posts: 315 My Photo Gallery My Classified Ads	Selling it b/c it's not making money? __________________ Al (travelling in RSA) 88 Unimog U1300L camper - 950,000 mi Hercules 35x12.50x20 Trail Digger M/T's (in Wyoming) 97 Dodge Cummins 5.9 12 valve no mods - 874,820 mi - truck I bought in Cape Town Apr 2010

05-31-2004, 02:13 PM	#3
PeteRR Registered User Join Date: Feb 2004 Location: Ridgecrest, CA Posts: 216 My Photo Gallery My Classified Ads	Shareholders and analysts like a company to concentrate on one product. It's easier to value the stock that way. Some companies feel the pressure to sell off product lines and subsidiaries for that reason. __________________ Pete. '93 Extended Cab. '68 Plymouth Road Runner - Completely Custom. The only original piece is the 8.75 rear axle.

05-31-2004, 04:00 PM	#5
Jeremy Cusick Registered User Join Date: Feb 2004 Location: Allendale, IL Posts: 412 My Photo Gallery My Classified Ads	I see history repeating itsself here. There once was an Agriculture manufacturer called International Harvester... __________________ 1995 Dodge Ram 3500 2wd SLT Laramie, red w/ black upper paint, 5 speed, 3.54 LSD w/ MagHytec cover, timing @ 16.5*, Free 3K GSK, 34 Lbs. boost on stock turbo w/ 14CM W/G housing, KDP dead, Banks Pwr Pack & Exh. brake, #100 plate 90% forward, AFC forward, star wheel loose, AFE stage 1 kit w/ PG7 filter, Amsoil lubricants, Fleetguard Stratapore filters, Frantz bypass filter, no silencer ring, single 5" chrome turn-out stack (straightpiped), NEW SouthBend Con-O and Blumenthal's nv4500

06-01-2004, 01:04 AM	#6
Dieseldude4x4 Administrator Join Date: Sep 2002 Location: Claremont, Virginia Posts: 3,294 My Photo Gallery My Classified Ads	We have three of their 20 cylinder models for emergency power at work. They are a real simple engine to work on and are very dependable. Ours are 1970 models and do very well for what we need them for and they sound sweet too. However, we had a 3612 Cat put in about five years ago for loss of offsite power and it is smaller, makes another 1000 horsepower, is only a 12 cylinder, and it was half the cost. Somebody isn't doing something right. There was a lot of thought went into that EMD engine like being able to change out a bad power pack and put it right back on line. I went to their plant in LaGrange and it was pretty cool too, especially how they friction welded the valve stems to the valves. But, I also saw a few things at the factory that I would say could cost them money. When I was there in 86, they had already gone from four to five locomotives a week to two. __________________ 99 3500 QC 4x4 five speed (it may or may not run), 81 Dodge 150 with the leaning tower of power (runs better than the 99), 2010 Mustang GT Premium (five speed baby) 2009 HD Super Glide and 2002 Victory Cruiser Board of Officers NCDTR #1 / President Virginia DTR Chapter #7 / DTR administrator CLICK HERE to get a copy of the DTR Membership form and join our local Virginia chapter. IT'S FREE!! Just print it out,,,, fill it out,,, and PM me for the address to mail it to!

06-04-2004, 01:30 PM	#9
mrb321us Muted User Join Date: May 2002 Location: Portland, OR Posts: 22 My Photo Gallery My Classified Ads	General Electric also manufactures locomotives and that business is profitable for them. However GE has a more diverse culture than GM since since their logo appears on everything from a $19 clock radio to multi-million dollar MRI machines, jet engines and, of course, locomotives. __________________ '96 Ram 2500 SLT Reg Cab 4X4 with 5.9 V-8 ordered from facytory with vinyl seats and rubber floor mat (I wanted a truck that looked like a truck inside, not a car)

05-31-2004, 02:50 PM	#4
DieselDaze Administrator Join Date: Apr 2002 Location: Missouri Posts: 3,147 My Photo Gallery My Classified Ads	The article did not get into why GM was selling, but made it sound like they were definitely dropping EMD. It just seems to be a question of who will pick it up. I can understand shareholders wanting a business to keep it simple for purposes of stock value, but like I said, I thought EMD was making money? Isnt that also a top priority for shareholders? Oh well, Ive never even been close to affording blue chip stock. I guess I just have to continue reading about it in the papers. Rich

06-02-2004, 07:30 AM	#7
induchman Registered User Join Date: Oct 2003 Location: on the road again Posts: 315 My Photo Gallery My Classified Ads	Who is buying locomotives these days? Amtrak, UPBNSF and CPCNR aren't.

06-04-2004, 01:51 PM	#10
Redleg Registered User Join Date: Aug 2002 Location: Bristol Michigan Posts: 1,799 My Photo Gallery My Classified Ads	http://www.michiganrailroads.com/Mic...oupFrameLP.htm __________________ MIDTR 90 W350, flat bed, xtra leaf all around, Jasper 3spd auto, 16cm housing, tampered pump, Isspro pyro/boost, piller pod, BHAF, 93 radiator mod, Superwinch lockouts, Moog, 2nd D70. The number you have dialed, 9-1-1, has been changed... to an unlisted number. Freedom is everybody's job!

06-07-2004, 02:28 PM	#11
CoastalDav Registered User Join Date: May 2002 Location: Melbourne, Florida Posts: 1,064 My Photo Gallery My Classified Ads	It may be that EMD's being large two cycle diesels have no market with todays larger 4 cycle diesels that CAT makes. Being around the marine market, all of the two cycle 71 seris diesels once removed are sold overseas. New boats built in the US, can't have two cycle diesels installed unless they met the tear 4 requirements of the E P A. We are installing two Detroit Diesels in a 64ft aluminum boat and removed two 12V71 TI's. The 12V71's with gear attached wet are around 6,000 lbs @ 550hp. The new Seris 60 GM Diesel with 740hp with gear wet is 4770lbs. So wer're replacing 12 cylinders with 6 and adding almost 200 more hp and loosing a bunch of weight. GM Diesel is owned by DC, and the GM diesel is actually a German MTU diesel painted green. Dave __________________ 2006 Dodge 3500 Bighorn SLT, Cummins, 48RFE, TFI Triple TC, 4:10's, 70 Gallon Transfer Flow Bed Tank with Trax II Monitor System, Racor Marine Centrifigal Water Seperator/10 Micron Filter in the system. Edge Juice/Attitude, Headache Rack, Turbo Wing, Rhino Bed Linner, Nasta Rails, Recon Lights and Strip Lights, Sirius Sat Radio, Net Weight 7,520 lbs with 34 gallons fuel Tagged at 13,500lbs GVW. Towing 35ft Carriage ,Triple Slide 5fer, GVW 14030. 04 Hemi Durango AWD "Grannys Hemi Kid Getter"

06-07-2004, 04:41 PM	#12
Iron Mike Registered User Join Date: Oct 2003 Location: Southern Illinois Posts: 154 My Photo Gallery My Classified Ads	This is nothing new. GM tried too sell EMD along with the Detroit Diesel line, back when they sold DD too Penske. Penske didn't want anything too do with it though. They only bought the DD line as I understand and personally I think they did some wonderful things with the 60 series. I to have worked on the 567 series and the 645 series engines. Even on some 567E1DF's. They were a factory dual fuel. They were all a very simple design. Kind of like an overgrown 71 series. EMD does make a 4-cycle, I believe it is the H series. It did away with a lot of the simplicity though. Just my .03 . __________________ 98 Ram 2500 4X4 QC, Short Bed, 24V, 5-spd., Cooper Discoverer STT LT285/75R16 2006 Expedition 4X4- Eddie Bauer, wife's new ride. 1998 Expedition 4X4- Cooper Discoverer ATR's (gave to daughter and son-in-law, only 238,000 miles) 1998 Subaru Outback AWD - Cooper Discoverer ATR's White 2-60 FWA w/loader New Holland MC-28 4wd Kubota B1750 FWA (traded in on NH)

06-07-2004, 05:04 PM	#13
DieselDaze Administrator Join Date: Apr 2002 Location: Missouri Posts: 3,147 My Photo Gallery My Classified Ads	From what I read on other forums, it sounds like EMD provided a better product, but GE could provide (a lower quality) product faster and offered better financing arrangements. Thus, this may be an issue where quantity out did quality. Rich.

06-09-2004, 11:33 AM	#15
DieselDaze Administrator Join Date: Apr 2002 Location: Missouri Posts: 3,147 My Photo Gallery My Classified Ads	Nick, You may be correct. As I stated, I was drawing a conclusion based on what I read on other train related web forums and not first hand experience. Thanks for the info and insight. Tell your management that you need to take that yard engine out once a week and get her "up to speed" on that main! Rich

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