A man for all seasons

Mike Haverty is used to weathering all kinds of storms. He's a fourth-generation railroader, brought up in the industry's grand traditions, but he has never been content with the status quo. Over the years, he has managed to ruffle more than a few feathers with his innovative ideas and disdain of conventional-some call it "traditional"-way of doing business. He's also outspoken. It's these attributes that have brought him a string of successes, first at the Santa Fe and now at the Kansas City Southern Railway, and that caused us to select him as Railway Age's Railroader of the Year.

If there's anyone who enjoys what he does, it's Mike Haverty. He proudly took me through KCSR's elegant, tastefully-appointed business train, the Southern Belle, during my visit to Kansas City. Haverty knows the lineage of every car in the consist and personally oversaw the restoration and customization of each one. He's equally proud of the vintage EMD F7 locomotives that power the train. He can regale you with historical facts and anecdotes as well as he can address a roomful of Wall Street analysts or meet one-on-one with a valued customer.

It's a genuine concern for the industry's viability that compels Mike Haverty to speak out on what he believes to be its shortcomings. Basically, his message is this: Let's stop shooting ourselves in the foot, because railroading is an industry whose success depends upon cooperation among carriers. "Some railroads will do anything they can to keep a competitor from getting one more carload, even if it means that 10 carloads end up on the highway," he says. "Somebody's missing the boat, because there's plenty of business to go around. Many railroaders are too parochial. They feel they have to crush their competitors. Meanwhile, the railroad slice of the pie keeps getting smaller, and the truckers are gaining. When you look at our revenue market share, it's a travesty. We have to stop fighting with our customers, and with each other."

For more on our Railroader of the Year, see Highlights.

Where the growth is: In the face of a slowing economy, several Class I's have announced cuts in capital investment and staff, Union Pacific being the latest. This doesn't bode well for suppliers-that is, those who don't have a stake in the passenger side of the industry. As our Passenger Car Review and Outlook (Highlights) shows, the value of the industry's backlog (cars ordered and undelivered as of Jan. 1) rose by roughly $300 million from last year-nearly 200 cars, including rebuilds.

Even more promising are the projections through 2006, during which time passenger rail agencies should order new or rebuild as many as 3,700 cars-a market value of around $7 billion. This, of course, doesn't include investments in infrastructure and other fixed facilities.