Stella-Jones Inc. Tuesday said it has signed a non-binding letter of intent to acquire Tangent Rail Corp., a provider of wood crosstie products and services to the railroad industry. The company said the acquisition will expand Stella-Jones’ capabilities within the U.S. railway tie industry and provide Stella-Jones with creosote manufacturing operations.
St. Laurent, Quebec-based Stella-Jones produces and markets industrial pressure treated wood products, specializing in the production of railway ties and timbers as well as wood poles supplied to electrical utilities and telecommunications companies. The company is listed on the Toronto Stock Exchange.
Pittsburgh-based Tangent serves the railroad industry with treated wood products, mainly railway ties, through facilities located in Warrior, Ala., Terre Haute and Winslow, Ind., Alexandria, La., and McAlisterville, Pa. Tangent produces creosote for wood preservation at distilleries in Terre Haute and in Memphis. Lifecycle solutions, consisting of tie pickup and tie disposal, are carried out at three facilities in Alabama, Minnesota, and North Carolina. Stella-Jones said Tangent’s sales for the year ended December 31, 2009 are expected to reach about US$175 million.
“The acquisition of Tangent Rail Corporation would considerably enhance our offerings to the U.S. railroad industry, while alsoextending our geographical reach,” said Stella-Jones President and CEO Brian McManus. “Tangent enjoys a solid market reputation and possesses high-quality assets, which should facilitate its integration into our network if the transaction is completed.”
The transaction is expected to close before the end of the first quarter of 2010, and is subject to U.S. antitrust clearance, as well as customary closing conditions, including entry into a definitive purchase agreement, regulatory approvals, and satisfactory due diligence.
Stella-Jones said it plans to finance the acquisition through a combination of equity and debt, subject to prevailing market conditions.
Metropolitan Transportation Authority Chairman and CEO Jay Walder, in a letter to employees dated December 14, acknowledges that New York State’s budget woes are exacerbating MTA’s own economic problems, saying, “We are all aware that this budget proposes actions that are painful–both for our customers and for you, our employees."
Outlining additional cuts of $383 million, Walder (pictured at left) said, “MTA Board approval of this budget proposal will result in fewer trains and buses and longer waiting times. It will also reduce the travel discount currently provided for school children in New York City. In addition, expenses for paratransit service will be reduced through a number of efficiency measures that change the way we provide service to our disabled customers."
MTA already had announced other cost-saving measures, including furloughing some non-union employees and phasing out student discounts. A state payroll tax projection designed to fund the MTA fell short by $100 million. New York State also announced it will cut appropriations to an arbitration award due to MTA's union, adding $91 million to overall expenses.
“Service reductions identified in the budget also mean fewer jobs, but unfortunately the reductions that affect our employees don’t end there," Walder said. "The budget additionally identifies a 10% reduction to the payroll for our non-represented employees. Frankly, I believe an across-the-board reduction is neither the best nor the right way to save money. It does not distinguish between aspects of our business that add the most value and aspects that we can no longer afford. Therefore, we will not implement the administrative reduction until April 2010. By then I expect us to have found systemic, sustainable ways to reduce payroll costs that we can implement instead.”
Reiterating his belief in applying state-of-the-art technology to improve the cost-effectiveness of the agency, Walder said, “Companies nationwide have reduced costs for their products and services by successfully implementing innovations in both technology and organizational structure. We must figure out how to follow their lead–and perhaps blaze a few trails of our own. We must be far more aggressive in identifying duplicative functions performed by more than oneagency and figure out how to do them more efficiently together–across agency lines. And we must not be afraid to eliminate work that is no longer necessary. I believe these steps are essential to confirm to customers and taxpayers that they are getting good value for their hard-earned dollar.”
Such confirmation may be hard to earn. A press release issued Dec. 14 by the Straphangers Campaign declares, “The riding public was told last May that there would be no direct service cuts when the legislature rescued the MTA. Riders have held up their part of the bargain with a fare hike last June, with the base fare going from $2.00 to $2.25 and a 30-day MetroCard from $81 to $89. But now they are threatened with getting substantially less while paying more. Ridershave every right to be mad as hell–and parents furious.”
The Straphangers Campaign broadside acknowledges that “the financial mess is not of the MTA's making. But the Straphangers Campaign believes the MTA has the resources to prevent the service cuts.” Spreading the blame for the MTA’s predicament, thegroup says, “As for student MetroCards, this is a political hot potato for Mayor Bloomberg. The Straphangers Campaign believes that parents will hold the Mayor responsible if there is a loss of student MetroCards.”
Union Pacific Monday said it had set a monthly record for moving loaded agricultural unit trains from facilities across its network. In November, the railroad moved 400 agricultural unit trains, breaking the previous record of 381 trains during October 2006. Of the 400 trains, 338 of them were grain and soybean unit trains and 62 were grain product trains.
"With record crop production levels, we knew this would be a busy year. Every area, from operating to engineering to our dispatch center, was ready for the challenge and provided peak service levels for our customers," said Paul Hammes, Union Pacific vice president and general manager–Agricultural.
Union Pacific also announced other agricultural loading marks, including: moving 35,588 carloads of grain and soybeans, the best November since since 2007 when the railroad moved 33,797 cars; and moving 12,399 carloads of soybeans in November, the second largest month ever behind October 2009.
Metrolink has reassigned chief executive David R. Solow to a new position, overseeing deployment of safety system upgrades (including Positive Train Control), and appointed Eric Haley interim chief executive.
Haley was previously CEO of the Riverside County, Calif., transportation agency; Riverside is one of five Southern California counties served by Metrolink, along with Los Angeles, Orange, San Bernadino, and Ventura counties.
Solow, who joined the agency at its formation in the early 1990s, has been under political pressure following the fatal train crash September 2008 in Chatsworth, Calif., between a Metrolink passenger train and a Union Pacific freight train. Investigation of the crash, still not completed, suggests the Metrolink engineer involved ran a red signal while texting on his cell phone.
A prepared statement issued by board Chairman Keith Millhouse emphasized Solow's expertise in technical matters, and the contributions Solow could make to ensuring rapid deployment of a $200 million safety upgrade.
Solow’s contract runs until at least midyear 2010. In a statement of his own, Solow said he would work closely with Haley, and was dedicated to implementing PTC. “I am pleased to be able to continue this aspect of the work that I have begun," he said.
Unresolved wage and benefits issues for 1,700 Canadian National locomotive engineers will be submitted to binding arbitration after renewed negotiations between the company and Teamsters Canada Rail Conference (TCRC) ended Saturday without a settlement.
CN and the union agreed, as part of the memorandum of settlement that ended the TCRC's strike Dec. 2, 2009, to third-party arbitration of wage and benefits issues if further talks failed to resolve their contractual differences.
Canada’s Minister of Labour will appoint an arbitrator, who will have 90 days following the appointment to report to the Minister with a final decision on a new collective agreement. CN and the TCRC can resume negotiations at any time during the arbitration process. However, under the dispute resolution mechanism of the Dec. 2 memorandum of settlement, no further strike action is permitted by the TCRC, nor can CN lock out TCRC members.
Britain’s Nomad Digital says it has won the Railway Interiors Expo Award for Passenger Service Innovation of the Year for its work in providing WiFi capabilities to the Dubai Metro.
Nomad’s system provides seamless broadband connectivity to all trains and stations on the automated light rail network, giving passengers Internet access. Trains run along a corridor of wireless coverage linked to trackside wireless base stations, with WiMAX radios located at frequent intervals along the route. Nomad Digital’s advanced mobile WiFi system can be fully integrated with a variety of applications, including real-time security CCTV, entertainment downloaded by passengers, and automated driver performance systems.
Dubai Metrois projected to carry approximately 1.2 million weekday on its 318 kilometers (197miles) of route.
Said Nomad Commercial Director Jay Saw, “I was honored and delighted to receive this award. It is a recognition of Nomad Digital’s achievement in meeting the highest quality of standards for the Dubai Metro WiMax system. This award has reinforced our position as global leader in transportation mobile services.”
The $1.1 trillion spending bill approved late Thursday by House-Senate conferees contains $4.1 billion for new and existing intercity passenger rail. Amtrak gets $1.6 billion to maintain and improve its current operations, and $2.5 billion is authorized for high speed passenger rail.
The high speed allocation is a down payment on the $8 billion President Obama pledged early this year for high speed rail corridors. The President's total commitment came to $13 billion with the addition of $1 billion annually for five years as part of the transportation reauthorization process.
Initial high speed grants are expected to be made by February. Transportation Secretary Ray LaHood said last week that the Federal Railroad Administration has received 45 applications from 24 states to advance major high speed corridor programs. An additional 14 applications have come from 34 states for corridor planning and related projects.
LaHood also said that 30 domestic and foreign suppliers have committed to establish or expand their base of operations in the United States to carry out President Obama's pledge to use stimulus funds to"create good jobs here in America and help reinvigorate our manufacturing base."
Texas’ capital city, awaiting regional rail service delayed by at least one year, is nonetheless evaluating possible streetcar alternatives. Austin’s City Council Thursday approved $1 million to complete a preliminary engineering study for a streetcar operation designed to connect some of the city's key business districts.
Los Angeles County Metropolitan Transportation Authority late Thursday approved plans for an 8.5-mile light rail line, running roughly north-south, dubbed the Crenshaw/LAX Transit Corridor Project. LACMTA cited input from numerous community leaders and citizens calling for LRT to augment, or replace, existing bus service (many rejecting calls for Bus Rapid Transit in the process).
Still at issue for the proposed line is one of location. Some supporting the LRT line want much of it placed underground. Despite that residual concern, Supervisor Mark Ridley-Thomas hailed the decision, saying, "It's a huge victory for the Crenshaw community and the South Bay community ... I expect it will have a highly positive impact on the quality oflife in that corridor."
The line would run from Exposition Boulevard to Imperial Highway, following Crenshaw Boulevard and passing through Leimert Park and Southwest LA, before running southwest through Inglewood and south to Aviation Boulevard near Los Angeles International Airport.
Officials hope to break ground on the project in 2012 or 2013, and open the line in 2018.
Five regional planning organizations Thursday announced the formation of the Western High Speed Rail Alliance (WHSRA). The alliance envisions a Denver-to-Los Angeles corridor with regional hubs in Las Vegas, Salt Lake City, Denver, and Phoenix as well as links from Denver to Salt Lake City to Reno, Nev., and ultimately to San Francisco.
"We believe implementation of a regional high speed rail plan for the Rocky and Intermountain West is critical to the development of a national high-speed rail system. Corridors must be studied now to lay the groundwork for additional development," said Jacob Snow, chairman of the organization.
To fund these studies, WHSRA will request $50 million from the reauthorization of the Surface Transportation Act that Congress will take up next year.
Included in the alliance are the Denver Regional Council of Governments (the greater Denver area), the Maricopa Association of Governments (the greater Phoenix Area), Regional Transportation Commission of Southern Nevada (Las Vegas), the Regional Transportation Commission of Washoe County (Reno), and the Utah Transit Authority (Salt Lake City).