What a Way to Run a Railroad

Do yuh hear that whistle down the line? I figure that it's engine number forty-nine. She's the only one that'll sound that way On the Atchison, Topeka and the Santa Fe...

Johnny Mercer wrote and Judy Garland belted out those lyrics in 1946. Now, many of the songs written about railroads are nostalgic goodbyes, but the whistles are still blowing on the Santa Fe. The railroad, which operates 13,000 miles of track from Chicago through the Southwest to California, is big, modern and--a rarity these days--profitable.

Not excessively profitable, to be sure. As a little old prospector is surprised to learn on one of the line's TV commercials, the railroad is now only one operation of Chicago-based Santa Fe Industries, Inc., which has diversified into such ventures as oil, lumber, pipeline operations and trucking. Last year railroading accounted for more than $1 billion of Santa Fe's $1.4 billion revenues, but only $51 million of the larger company's $150 million profits. Still, that was a creditable performance in an era plagued by railroad bankruptcies, and the outlook for 1976 is even better. Railroad profits for the first half of this year, Santa Fe reports, were $20.2 million. In the lagging first six months of last year the line posted earnings of only $9.9 million before making up for lost time with increased freight rates and a burst of new business in the second half.

One reason for the line's prosperity, says Santa Fe Industries President John

S. Reed, is that management is "dedicated to running a first-class railroad." To that end, the Santa Fe recently opened a $50 million switching yard in Barstow, Calif., that it claims is the most advanced in the nation; in only two moves, the "humpmaster" (who determines route priorities) can automatically switch freight cars to 16 holding stations. The railroad was also the first to install a locomotive simulator to train its engineers (who now include seven women), and it uses a computerized central information system to make the most efficient use of locomotives.

Good Track. The Santa Fe is also the only railroad to have run a freight train--the Super C--at 80 m.p.h. "To do that," says Reed, "you have to maintain your track pretty darn well." Unlike many other railroads, the Santa Fe spends money heavily on keeping its roadbed in good repair even in bad times. Says Operations Vice President Larry Cena: "You can't just be doing maintenance work when business is good. That's when you need the plant." During the Russian wheat sales boom in 1973, the Santa Fe picked up much extra business from rival roads that lost precious time doing essential repair work to prepare their tracks to handle the traffic.

Reed is determined to maintain the improvement. One indication of his fierce pride in the railroad is a recent tiff with Amtrak, the Government-sponsored corporation that has taken over operation of most U.S. passenger trains. When it took over the Santa Fe's fabled Super Chief service from Chicago to Los Angeles, Amtrak kept the name but dropped the linen napkins and fresh-cut flowers that traditionally graced the dining car. John Reed, aghast at such a decline in standards, withdrew permission for Amtrak to continue calling the Super Chief by its proud old name.

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