Predicting the Economy with Railroad Material

Recent word from the expert economists contains some fear that the U. S. Economy might be starting a no-growth period. Several people I speak with in the Railroad Supply business beg to differ. Why?

For years, certain observers with those businesses who supply material to Railroads have maintained that Order Backlogs have been an early predictor of the U. S. Economy. If orders for rail, ties, freight cars, and locomotives are down, it will not be long before the economy begins to slide as well. This happened most recently about 1999. Everyone was confident that the economy was robust. But Railroad Suppliers noticed that their orders were down. It didn't add up.

Sure enough, the economy went into a recession about eighteen months later.

But now? Orders are high. All suppliers seem to say the same thing, that they are so busy that production has to be carefully scheduled now to accomodate customers. The last time this happened? Most recently it was for 2002 orders. That upsurge in ordering then foreshadowed a turnaround in the economy.

I am thinking that the bearish observers of the economy will be proven wrong over the next twelve months. We shall see!

Transportation Infrastructure is not political!

At least as far as the voters are concerned. Check out suburban Denver, the metro Phoenix area, and suburban San Francisco. Your recognition of those three areas comes with the association of which Presidential Candidate they each went for in 2004. Two went Bush, one went Kerry. Two would be considered conservative, one liberal. Two voted in favor of taxes for Transportation Projects, one voted against. And in all cases, the two were the same, as was the one.

The meaning of all this? Simply that voters realize that the funding of transportation infrastructure should be decided upon based on each project's respective merits, rather than the perception that taxes or smaller government are always something liberals are for, and conservatives are against.

This is a good thing. It is an encouraging thing. Planners can plan, builders can build, and we can all benefit from new transportation infrastructure, planned and built without the polarity that is emblematic of today's government.

The Good Old Days

Sunday thought: Every time I go thru Chicago, I am amazed at the size and extent of the transportation infrastructure that was constructed by private industry about fifty to one hundred years ago.

Not only am I amazed, but I also wonder if our abundance of Public Transportation Agencies, with all of their staff and management expertise, could duplicate the effort and scope of that private industry construction that was done all those years ago.

Trains Magazine on Training

No sooner than I had posted last Sunday about the need for training then Trains Magazine featured an article in their May 2005 issue about that very subject! It was a well done piece, and I was grateful to see that it reinforced my point made on Sunday.

The article described in detail the Training Programs of several Class One Railroads. Close reading shows that each road concentrates on the trades of their businesses, the engineers, conductors, the signal maintainers, the locomotive machinists, etc. These people are the lifeblood of their respective companies, and training them is a good thing. But it is not management training, at least not the management training that was pioneered by Al Perlman.

Oh, the article did mention several University Programs, and how Engineering Graduates can gain knowledge about the Railroad Industry. And it did mention how these graduates can take one of two career paths, either with a Railroad or with a Railroad Engineering Consulting Firm. But the same objections remain. The people who move directly to consulting lack the on-the-ground experience so vitally needed for confident decisions. With no practical experience, there is nothing they can rely on but textbook learning and whatever brief experience they have. That combination means decisions made that are often flawed, and sometimes even arrogant. Today, as Commuter Lines and Light Rail Projects abound, we need better than that.

Where is the new talent?

As you look around at any of the AREMA Meetings, it is obvious that there are very few twenty somethings and thirty somethings. Articles in recent RR Trade Journals have also noted this situation: There are fewer and fewer young people to fill the vacancies created when the old heads retire. Some parts of our industry are affected more than others.

RR Contractors seem to be doing quite well. If you deal at all with staff members of most RR Contractors, either large or small, it is not unusual to find talented younger people who are taking up the reins of control, and having a positive impact on their company and their customers. The NRC should consider itself lucky. The contractor organism is being replenished, and the new growth is gaining good, on-the-ground practical experience.

What about the Railroads themselves? It doesn't appear that they are doing quite that well. Oh, there is new blood, but the home-grown and trained talent is not there like it once was. The railroads are having to go outside their industry to recruit personnel who often do not know a spike from a nail. There do seem to be lots of younger people out on the property, but the senior management often avoids exposing them in adequate numbers to experiences that prepare them for higher and greater things. Witness the training program that Al Perlman began on the New York Central, a program that continued with the Penn Central. Many alums of that well executed effort went on to make significant contributions. Other lines duplicated Perlman's plan with varied success, but point out to me one Class One today who intentionally appeals to college grads with a training program that leads to a fulfilling career, a training program that provides an education unavailable anywhere else.

No doubt it has become harder to convince college grads to work in an industry that is not as sexy as the promise of today's computer and IT. But recruiting can be done. There are a great number of people who love the Railroad Industry, and would welcome the chance to participate, if adequate training were made available, training that might not involve mind numbing hours working the extra board, or running a hydralic spiker.

The sad thing is that there is another area which suffers from this lack of training even more than the Railroads themselves. Consider Railroad Engineering and Consulting firms: These firms once harvested the experienced talent raised on Railroad Properties. Now these firms have to hire engineering staff directly off college campuses, and the lack of specific railroad knowledge held by these recruits ends up making life difficult for everyone.

And don't get me started on the staff of many of our public agencies, personnel who are responsible for making engineering and purchasing decisions for their Light Rail and Commuter Rail Projects. At least, don't get me started today. There will be more to come on this topic, I can assure you.

But in the meantime, consider that by some analysis, fully one half of all Class One Railroad Engineering Staff will retire within the next ten years. That means a great opportunity exists for younger people to move up and excercise authority. The issue is, will they have the experience needed for that exercise? Hopefully, they will have received it somewhere, because the railroads will be forced to place them in positions of authority, experienced or not.

Oh, and one other item at the beginning,

I will do all I can to remain anonymous. I have to, no further discussion. Any points to be made here can be salient regardless of who happens to be the writer. Maybe you have heard about the Delta flight attendent who was terminated as a result of her blog. I really don't want to take that risk!

Many of the interviews we read in the Railroad Trade Journals are severely filtered and corrected. Hopefully, those filters will remain off on this page. Maintaining anonymity should encourage that outcome.