John,
I think that most, if not all, of EMD's re engining was customer driven. To the best of my knowledge, EMD didn't really have a formal sale program for re engining locomotives. Each project was "one of a kind" with design work limited to whatever was necessary to complete the task. Most projects involved only a few locomotives. The work, itself, was usually done in area north of the main erection floor, called the wreck bay. It was residual business never intended to be a primary source of revenue. It was job shop work with each model being different. It was custom work which did not lend itself to mass production that EMD's business was built on.
I didn't have access to EMD pricing until the mid 1970s, so I don't know what prices for locomotives were in the late Q era or the early BN period. However, keep in mind that in August, 1971, the Nixon administration imposed wage and price freeze on the country in an attempt to control inflation. It was supposed to last 90 day, but in variations, lasted until April, 1974. When I started in the Sales Department, my first job was contract escalation calculations for existing contracts. Like other companies, EMD contracts had for many years, included an escalation clause which had never been utilized. I think EMD's was 5%, not an insignificant amount in multi million dollar contracts. Needless to say, a lot of customer were not happy when advised that their contract price was increased by 5%.
The Q line into the Powder River basin of Wyoming was primarily a long branch line prior to the BN merger. Coal was certainly not the major business that it is today. The coal in that region was a low grade low BTU product, not favored by power companies. It was also low sulphur. Shortly after the BN merger, the Environmental Protection Agency was formed. Among it's early restrictions was the reduction of sulphur in the exhaust output of power plants. The Powder River coal suddenly was in high demand and traffic increased rapidly. So did BN's investment in the area. In the latter Q days, older EMD four and six axle locomotives were assigned to the line. After the merger, as the coal demand increased, BN assigned six axle GEs to coal service and began ordering new power. In those early years of the '70s, they order a sizable number of SD45s, F45s, SD40s and later SD40-2s from EMD. At the same time, they were ordering U30Cs from GE.
Most of the EMDs were assigned to manifest freight service while the GEs were assigned to coal service. The GEs were favored in coal service because they were considered to pull better under heavy load. EMD recognized that to participate in the coal business, they needed to change the perception. Modifications were made to improve tractive effort and performance at low speeds. Comparison performance tests were made and training programs were established at Alliance to train the staff in EMD maintenance. The efforts were successful because in the last three years of the 1970s, BN purchased more than 600 SD40-2s. During those same years, BN was spending huge amounts to improve the Powder River basin trackage, including the addition of the Orin Cutoff which greatly improved access. At the same time, coal traffic was increasing rapidly.
Bill Barber Gravois Mils, MO Thu Jan 5, 2012 1:16 am (PST)
Thanks Mr Barber! Great answer as always! If you have a moment, could you comment on two other EMD-related questions?
First, did EMD come up with the re-engine program for units from other builders to keep La Grange busy, or was that something which started by the roads themselves?
Second, what sort of price per unit were the Q and BN paying for SD45s and SD40-2s when new? I was surprised by some BN annual reports from the mid-1970s that, despite the booming coal traffic, unit purchases per year from EMD were ranging in the twenty-five to fifty area. (Presume BN was spending the money on physical plant rather than motive power as it tried to keep up with demand.)
RSVP
John Phillips
Seattle
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