WISCONSIN CENTRAL TRANSPORTATION FILES ICC APPLICATION SEEKING CONTROL OF FOX VALLEY & WESTERN LTD.
WISCONSIN CENTRAL TRANSPORTATION FILES ICC APPLICATION SEEKING CONTROL OF FOX VALLEY & WESTERN LTD. ROSEMONT, Ill., April 28 /PRNewswire/ -- In an application filed today with the Interstate Commerce Commission (ICC), Wisconsin Central Transportation Corporation (WCTC) (NASDAQ: WCLX) said common control and coordination of its Fox Valley & Western Ltd. (FV&W) and Wisconsin Central Ltd. (WCL) railroad subsidiaries will benefit shippers and the general public by providing faster, more direct service and by eliminating duplicate grade crossings, tracks and freight yards. FV&W is a recently created and wholly owned subsidiary of WCTC, which will acquire the operating rail assets of the Green Bay and Western Railroad Company (GB&W) and the Fox River Valley Railroad Corporation (FRVR). The rail lines are to be acquired from Itel Rail Corporation and encompass 479 route miles and annually generate more than 100,000 carloads with revenues in excess of $40 million. WCTC President Edward Burkhardt said, the ICC filing provides "ample evidence of substantial public and transportation benefits and no anti- competitive effect." A coordinated system, he said, "will bypass inefficient routings by avoiding interchange switching and delay-ridden yards." He said that in many cases shippers will experience a 24-hour improvement in car movement through the Chicago gateway. Common control of WCL and FV&W, Burkhardt said, "may be the last chance for the rail industry in northern Wisconsin to effectively reverse the flow of tonnage to the trucks." Transportation studies filed with the application reveal that truck competition has reduced the amount of freight handled by railroads in the state to about 10 percent. The application includes substantial support from major shippers including Badger Mining, Consolidated Papers, Kimberly-Clark, Mead Corporation, Packaging Corporation of America and Scott Paper. Under plans filed with the ICC, main lines between Green Bay and Fond du Lac would be combined along with some consolidation of facilities Fond du Lac, Green Bay, Manitowoc, Neenah, Oshkosh and several other locations. "We estimate as many as 132 grade crossings can be eliminated in those communities without the loss of service to any shipper," said Burkhardt. Some 50 crossings will be eliminated in Oshkosh alone. According to a 1989 study by the Wisconsin Department of Transportation, faster train speeds and reduced delays over highway grade crossings at Oshkosh will save motorists approximately $2.5 million annually in time and fuel consumption. Reducing the number of grade crossing signals could save an additional $60,000 annually in maintenance expense, making funds available for highway grade crossings elsewhere in the state. Other projects call for elimination or 16 crossings at Fond du Lac, 12 crossings between Oshkosh and North Fond du Luc and 15 crossings at Manitowoc. At Neenah, eight crossings will be eliminated and a quarter- mile track would be removed opening up a choice downtown area for commercial development. At Green Bay, consolidation of rail yards and removal of unneeded track would eliminate as many as 31 crossings and help remove rail and truck traffic from two residential areas. The WCTC route of Milwaukee to Green Bay will be "a technically superior route" suitable for passenger service, Burkhardt said. FV&W also plans to increase the frequency of trains at Manitowoc from five to seven days a week, and raise the service from Wisconsin Rapids to East Winona from six days a week to seven. Employees Burkhardt said the new FV&W will give hiring preferences to present employees of the GB&W and FRVR. "Wages and benefits offered by the FV&W will be generally comparable to and in most respects better than those available with the present employers," Burkhardt said. Wages for some employees hired by the FV&W could increase as much as 12 percent, he said. All FV&W employees will be eligible to participate in profit sharing and employee stock purchase programs. "In short," Burkhardt said, "the jobs available as part of the WCTC family are excellent railroad jobs with a bright future." Truck Competition Included with the filing is a study of transportation competition by Reebie Associates, Greenwich, Conn., which allows that railroads handle about 10 percent of Wisconsin's total traffic volume trucks handles 70 percent. The remainder moves by river barge or lake vessel. The study documents that "truck is the overwhelming mode of choice" in surface transportation in Wisconsin and that strong truck competition will effectively prohibit WCTC's control over WCL and FV&W from substantially lessening competition. The report also noted the competitive influence of waterborne transporters, which are "particularly important in the volume movement of bulk goods into and out of Wisconsin." Another transportation expert, William Rennicke from Mercer Management Consulting, Inc., Lexington, Mass., examined FV&W's impact on the relevant market that includes 12 business economic areas in Illinois, upper Michigan, Minnesota, and Wisconsin. Rennicke said, "The proposed common control offers a unique opportunity to strengthen the light density rail system in the region without harm to competition." He noted that the combined market share of the new WCTC system will be only 2.5 percent of the relevant market, which is dominated by truck competition. Six Month ICC Review WCTC's plans require the approval of the ICC following a six-month proceeding that includes a review of competitive and public interest issues. The ICC's schedule will allow opportunity for comments by those who wish to speak in favor or against the transaction. Wisconsin Central Transportation Corporation principal subsidiary, WCL, operates more than 2,000 miles of railroad serving Illinois, Wisconsin, Minnesota, Michigan's Upper Peninsula and Ontario. -0- 4/28/92 /CONTACT: Tom Power of Wisconsin Central Transportation, 708-318-4600/ (WCLX) CO: Wisconsin Central Transportation Corporation ST: Illinois IN: TRN SU:
PS-LR -- NY152 -- 4116 04/28/92 19:46 EDT
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|Date:||Apr 28, 1992|
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