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GM looking to sell EMD
While it may not be truck related, I thought GM was doing ok with its EMD's... hmmmm, I guess maybe not eh?
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. |
Selling it b/c it's not making money?
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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.
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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. :rolleyes: Rich |
I see history repeating itsself here. There once was an Agriculture manufacturer called International Harvester...
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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. |
Who is buying locomotives these days? Amtrak, UPBNSF and CPCNR aren't.
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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 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. 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: 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 Wabtec Corporation of Wilmerding, PA has announced a $12 million order from Amtrak for 10 MP15B switcher locomotives Its in PDF format. Rich |
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.
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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 |
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 .
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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. |
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. 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] |
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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