railroader of the year
the rounds of congressional offices, the results can be considerably different. Just the presence of a high-ranking executive is impressive to a member. Few members know much about the process of moving American production about the country. Rose does not claim specific successes, but he is getting known as an executive who has learned how to play the Washington game, and he plays it well. Bring up the subject of Buffett, and Rose is unabashedly enthusiastic. “Warren Buffett is the smartest man I ever met,” he says. “Warren loves the railroad,” he adds, but absolutely does not meddle in the operation of the railroad. Berkshire Hathaway is large enough to guarantee BNSF’s capital allocation for execution of its business plan. In the relatively unique relationship that Ice and Rose developed, “Carl was a right hand for six of the 13 years we worked together,” Rose says. When he decided to give Ice the CEO title and position, there were some observers who thought Rose was stepping back, perhaps in preparation for an early retirement. Nothing could be farther from the truth; Rose is just as busy as ever, just focusing on different issues than before. Of the seven Class I railroads (as the federal government defines them) in the U.S. and Canada, BNSF is the only one
FINALLY!
reporting earnings growth in a difficult 2015. Other carriers are having to cope with sharp declines in their coal business and have not yet figured out how to adjust. BNSF has main line access to the Powder River Basin of Wyoming, which allows it to move extremely-low-sulfur coal to utilities to the south and east of the PRB. As utilities switch from coal to natural gas and other non-carbon-emitting fuels, it is Norfolk Southern and CSX that are losing once-lucrative carloads. BNSF also had a significant business moving crude oil from the shale oil deposits of the Bakken in North Dakota. The current oil glut has hit BNSF, but traffic has held up so far, and just about everyone who follows such things is convinced that demand for CBR (crude by rail) will return as the oil glut is contained. A Bloomberg writer recently spoke with Rose and came away with a story that Rose would do a deal of his own if Canadian Pacific and Norfolk Southern were to merge. Rose says he was misquoted, and that what he did say was that railroad mergers don’t happen in a vacuum. If CP and NS were to get together, BNSF would have to view the new venture very carefully. He chooses not to say how BNSF might react, but did tell Railway Age that he doesn’t think there is a need for any mergers among the Big 7.
CONGRATULATIONS CARL ICE
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38 Railway Age January 2016
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