All fields are required.
That railroad execs and Wall Street analysts embraced Berkshire Hathaway Inc.'s proposed purchase of BNSF Railway Co. was no surprise: Warren Buffett's buy-in delivers a message they've been trying to send for some time now, and delivers it better than they ever could. As BNSF Chairman, President and CEO Matt Rose told Managing Editor Jeff Stagl, who recently spent time in Fort Worth (see "Buffet's buy-in bouys BNF's growth prospects — and the rail industry's spirits"): "It's like the Good Housekeeping seal of approval that says railroads are here for the future."
That thing called "the future" can be difficult to put into any kind of practical perspective, particularly given the present state of the economy (and the jobless recovery to come). To help BNSF's 40,000 employees buy in to Buffett's buy-in, the Class I posted a video "interview" Buffett gave to Rose on Dec. 21 on its Intranet. Among the questions Rose posed, courtesy of a BNSF-supplied transcript of the conversation:
It was true before Buffett said it, of course, but common sense, like candor, never goes out of style. If this deal serves as a symbol of that and nothing more (although I think it'll end up meaning a lot more), it'll put a definitive stamp on 2010 — and beyond.
Stakeholder sentiments regarding the Surface Transportation Board Reauthorization Act of 2009 (see "Rail and shipper interests begin to weigh in on STB reauthorization bill") continued to trickle in as this issue went to press, including the following from Mike Steenhoek, executive director of the Soy Transportation Council:
"S. 2889 should be viewed by agricultural shippers as a step in the right direction," he wrote in a Dec. 23 email, adding that it would provide "greater balance between the interests of railroads and rail customers." The bill would provide for a "more proactive, effective" STB, one with a "more accessible process for resolving rail rate and service disputes, and greater transparency within the rail industry." Concluded Steenhoek: "Since our nation's transportation challenges are more the result of a lack of investment, rather than a lack of regulation, Chairman Rockefeller and his colleagues were prudent to ensure the current environment remains conducive to continued investment by the rail industry."
That view — that the environment this bill would create would be conducive to continued investment — isn't universally shared in rail country (see Tony Hatch's take on page 13). A lot will depend on the version that actually passes the Senate (if it does pass), particularly if it includes the type of "antitrust" language that Sen. Rockefeller indicated it would when he introduced the bill on Dec. 17. ("I will continue to work with Sen. Kohl and other members to add antitrust reforms to our bill as it moves to the floor," he said.)
But — and this caveat is based solely on fly-on-the-wall observations and what I choose to believe were sincere conversations during the past year-plus with some of the powers that be among lawmakers, their staffers and the bill's stakeholders — I can't help thinking this potentially deal-breaking tension isn't quite that, that there'll be a détente thing, that this won't devolve into fightin' words (like "re-reg" and "pro-competition"). Not this time. Instead, I'll echo the comments Warren Buffett offered up on the subject to BNSF employees last month. Rail, he noted during the aforementioned video interview, "has a utility aspect to it" and will always be regulated. And there'll always be at least some shipper-railroad tension. But in the end, "the country needs railroads to spend lots and lots of money merely to stay in the same place, but then beyond that, to grow, and it would be crazy of society to deny you a reasonable rate of return."
We'll find out where we're at in D.C., crazy- and/or reasonableness-wise, soon enough. In the meantime, we'll tap into whatever consternation and constructive conversation there is as Congress and the respective lobbies return to work this month, and we'll share what we learn in our February cover story.
Pat Foran, Editor