Thanks for the explanation. I didn't even think about the fact that there
wouldn't be a used market yet. Personally I've always been amazed at the
longevity of locomotives.
Dan
On Jan 4, 2012, at 9:54 AM, William Barber <clipperw@gmail.com> wrote:
>
>
> Dan,
>
> Actually, when the EMD trade in program was developed, there was no such
> thing as a "used" diesel locomotive market. At that time in the late 1950s,
> most RRs had just completed dieselization. The only fleet of used locomotives
> were steam locomotives, some quite new having been built in the mid to late
> 1940s, which the RRs couldn't wait to get to send to scrap. (Some sat in dead
> lines, waiting to be paid for or for their leases to expire, before they
> could be scrapped!). The period of 1957 - 1958 was a recession so orders were
> down and most RRs were satisfied with their first generation diesel fleets as
> is. EMD and the other builders were looking for ways to entice customers back
> into the market place. One way, of course, was via technology with product
> improvements, mainly in the horsepower and performance areas. That wasn't
> generally enough because the RRs didn't see a significant financial benefit
> to replace perfectly good mainline locomotives even though the 2000 hp GP20
> was advertised as three units being capable of replacing four older FT units
> (6000 hp in three GP20s as compared to 5400 hp for four FTs).
>
> To convince customers to buy new locomotives and to reduce the first cost,
> the trade in program was developed. With the maximum number of salvageable
> components, the price reduction was in the range of 25%. Initially, only EMD
> locomotives were eligible, but as pools of usable parts were accumulated, non
> EMD locomotives were accepted. A new locomotive and one built with trade in
> parts looked identical. The only way to tell the difference was by the order
> number. New locomotives were in the 5000 series and remanufactured
> locomotives were in the 7000 series. The customers flocked to the program in
> droves. In the days before computers, EMD had a relatively large department
> within the Sales Dept. that did nothing but compare old locomotives with new
> locomotives based on actual train data from the customer's operation. My
> lather father worked f! or that department for more than 30 years. Their
> studies included maintenance savings, fuel savings, performance improvement
> savings and investment savings that all resulted in a bottom line improvement
> for the RR. In some cases, they even made recommendations on operational
> changes that would enhance return on investment. Like many RRs, the Q was
> almost immediately in line. The remanufacture program enticed them, like many
> other RRs, to trade in locomotives that were only 15 - 17 years old. In most
> cases, among other savings, they ran the last miles out and avoided one more
> overhaul. Some locomotives pulled a train into Clyde yard in Cicero, were
> shut down and drained and shipped off to La Grange.
>
> One of the things that is seldom credited which I think helped make the
> program work was that, in some areas, those older locomotives were over
> designed. As an example, the crankshaft in an FT, which was designed for 1350
> hp, could ultimately have been rebuilt for service in a GP40, rated at 3000
> hp! The other builders, for the most part, didn't or couldn't follow EMD's
> lead and never really developed a trade in program until GE came along. GE
> didn't have an older installed fleet to draw from, but offered trade in
> value for older non GE locomotives just the same. The Q, of course, also
> participated in their program. Among locomotives traded in to them were the
> Baldwin switchers and, I believe, some of the E5s. BTW, by government
> accounting rules, the trade in locomotives were supposed to be scrapped, not
> sold as used. For the most part, that did happen.
>
> Bill Barber
> Gravois Mills, MO
>
>
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