(erielack) The Demise of the Erie Lackawanna

[RJFlei_@_aol.com]

Fellow listers,
    When we talk about the management of the E-L, we must also understand the 
conditions that they had to operate with. The commuter operations had to be a 
huge drag on operating expenses for both the Erie and the Lackawanna. Also, 
the tax structure in New York and New Jersey is crazy. 
    I think that it was just since the CR breakup that CSX  sought to get 
some tax relief from the state of New York.
    Another aspect is this .........If you don't have any industry on your 
lines, what do you need a railroad for? With the closing of many online 
factories, revenues would really dry up. NAFTA and GATT have had a negative 
affect on the industry in my area. There are very few shippers left on EL 
lines here in eastern Ohio.
    At one time the Mahoning Division originated and terminated a lot of 
frieght. Not any more. The manufacturing base is prettymuch gone and what is 
left, is on the way out.
    I often wonder whose side the US Government is on.
    Here's just one example of an EL online customer. Packard Electric Div. 
of General Motors (now Delphi Automotive Systems), in 1972 15,000 Americans 
making wire, harnesses, and components for the auto industry. It received 
copper and plastic compound, and chemicals by rail. Shipped finished wiring 
harnesses in EL 50' double door boxcars. 
    Today, still receives compound and copper by rail. No shipping is done by 
rail as most all harness production is now done in Mexico (60,000 Mexican 
workers) or China. The Warren, OH, workforce is now 5,500, and in 2 years 
will be 2,500. That's a lot of boxcars not being shipped. In fairness to 
Delphi, most finished goods are shipped by truck for Just-in-Time delivery, 
since rail transportation does not lend itself well to JIT.
    One of the things that drives JIT delivery, is that businesses have to 
pay taxes on inventory. To reduce this tax burden, inventory levels are 
reduced to a minimum.
    At any rate, plant closings and downsizing have had a major effect on 
rail transportation over EL rail lines.

Rick Fleischer
ELHS 1426
Cortland, Ohio

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