"The Password is ....triad"

If you are as old as I am, you might remember the game show "Password", where celebrities and guest would pair off and try to guess the secret word.

They played "Password" on last night's debate.  The result was amazing....italics are mine.  The rest is pure Trump.  You can't make this stuff up.

HEWITT: Mr. Trump... Dr. Carson just referenced the single most important job of the president, the command, the control and the care of our nuclear forces. And he mentioned the triad. (Thought balloon:  "triad?"  Was that just in my doctor's report?) (hint #1:"tri" is a prefix for three) The B-52s (that's one thing) are older than I am. The missiles (that's two things) are old . The submarines (that's three things) are aging out. It’s an executive order. It’s a commander-in-chief decision.What’s your priority among our nuclear triad?

TRUMP: Well, first of all, I think we need somebody absolutely that we can trust, who is totally responsible; who really knows what he or she is doing. That is so powerful and so important.  (Translation: Nuclear bombs are dangerous to own and operate, so don't leave them with a fool - they could go off! Good idea! )  

 (Thought balloon:  I don't want to talk about nukes.  Hmmm.  Wonder what "triad" means?  Nukes....hmmmm.  Iran! Iran want nukes!  Middle East! Iraq!  Hey, I was against it once we found out there were no WMDs. I'll say that, sort of...) 

And one of the things that I’m frankly most proud of is that in 2003, 2004, I was totally against going into Iraq because you’re going to destabilize the Middle East. I called it. I called it very strongly (Translation:  Strong is better than weak, because it's stronger.  I'm a very strong predicting kind of guy!)  And it was very important. (Translation:  Everything I say and do and think is important to me) 

But we have to be extremely vigilant and extremely careful when it comes to nuclear.  (Translation:  No casual nukes, anymore!)  (Thought balloon:  Keep stating the obvious and make is sound like wisdom.  Maybe I can figure out this "triad" thing...) Nuclear changes the whole ball game.  

 (Thought balloon:  Still no idea about this triad thing.  Lets talk about something else. hmmm.  Iraq, no did that one.  How about Syria!?!)

Frankly, I would have said get out of Syria; get out – if we didn’t have the power of weaponry today. The power is so massive that we can’t just leave areas that 50 years ago or 75 years ago we wouldn’t care. It was hand-to-hand combat.  (Thought balloon:  I have no idea what I just said, but I said it so it must sound good.  No worries.) 

(Thought balloon:  Still have time.... hmmm... Triad?  Screw that!  Any more middle east countries I can talk about?    Can't think of anything....  Let's blame Obama!  He was just at that climate thing...nukes > climate.  Go with that!)

The biggest problem this world has today is not President Obama with global warming,  which is inconceivable, this is what he’s saying. The biggest problem we have is nuclear – nuclear proliferation and having some maniac, having some madman go out and get a nuclear weapon. (Translation: No more casual nukes!  Bad guys with nukes are a bad thing  I'm against that.) That’s in my opinion, that is the single biggest problem that our country faces right now.  (Translation:  Absolutely!  What?)

HEWITT: Of the three legs of the triad  (Thought balloon:  "triad" again.  WHAT IS THAT!?!  It has three legs?  A Martian thing?  Nukes on Mars?...no clue...) , though, do you have a priority? I want to go to Senator Rubio (Though Balloon:  Rubio, what a wimp...) after that and ask him.

TRUMP: I think – I think, for me, nuclear is just the power, the devastation is very important to me. (Translation:  Powerful nukes are important because they are powerful. We should only have the devastating kind because I like them better.)

So, when asked how he will prioritize the management and upkeep of our three primary methods of delivering nuclear power around the globe, Trump said:

1. Nukes are powerful.
2. Bad guys shouldn't have them.
3. The Middle East is messed up and I told you so.
4. Obama!  That guy....

Time to go back to hawking real estate, buddy.

Parallel Universe

What if...

Back in 1996, NS had not fought the CSX/Conrail merger, but, instead, extracted a pound of flesh during the STB approval process. Let's assume that "pound of flesh" was intended to dilute the Conrail stronghold on NY/NJ.

Let's assume:

1. NS gets to purchase:

• The Southern Tier and Croxton Yard
• The B&O from DC/Phila/Baltimore to Chicago
• Conrail's ex-Reading line from Phila to Bound Brook and rights beyond to connect to the port and Croxton.

2. CSX/CR have to accept reciprocal switching in North Jersey and Detroit.

3. NS would still have a big pile of cash to spend...and buys CP. Which is a bit of a train wreck, and pretty cheap and not a horrible fit.

East is sort of balanced again.  NS + CP is significantly large enough to keep UP or BNSF from swallowing them whole.

Mergers go fairly smoothly because they are end - to -end and solid "Day One" operating plans can be developed and gradually implemented (not like the CR split!)

Smooth integration means that BNSF + CN is allowed.

UP + NS/CP follows on less than a decade later and finally BNSF/CN + CR/CSX.

And we're done.

Why I'm not the boss of Norfolk Southern

I listened in to Norfolk Southern's third quarter Wall Street analyst webcast.  I was disappointed.  Not so much in the results - which were lousy, but not as lousy as Wall Street thought they'd be - but in the rhetoric that went along with the presentation.

What I heard versus what I wanted to hear

Heard: Our strategy is:

1.       Rate increases

2.       Small growth

3.       Small, targeted  capacity investment

Wanted to hear:  Investment in velocity to reduce cost, create value, fill RR up with IM traffic

Heard:  Triple Crown to do auto-parts.  IM will try to convert existing FAK, but lanes don’t match well. 

Wanted to hear:  Triple Crown expertise in door to door service will be applied to existing IM lanes

Heard:  Velocity trend is headed right direction

Wanted to hear:  An actual plan or strategy to increase velocity

Heard: (analyst:  less than 2006 traffic but 2006 employee count) Velocity is good.  Reduces recrews and overtime

Wanted to hear:  Aggressive pursuit of long pool crews through process improvement/targeted investment

Heard: comparisons to 2014

Wanted to hear: comparisons to 2013

Heard:  implications that RR the way  is will be just fine in the long run, we just have to get back to previous performance levels.

Wanted to hear:  There is a fundamental shift from coal to intermodal and we have plans to configure our assets accordingly. 

Heard: nothing

Wanted to hear:  something about PTC risk, workforce transition and training, how technology is helping velocity

Heard: employee safety stats lead off operation’s slides

Wanted to hear:  to hear almost nothing about employee safety.  It’s just one of many internal processes that are important.  Safety is not our value-added product.

Heard:  We are keeping assets because coal may turn around

Wanted to hear:  Coal is dying, we are planning accordingly, specifically X, Y, Z.

Heard:  we have enough crews.

Wanted to hear:  We have enough crews.  I know we’ve said it before, but this time you can believe it  - here’s proof, or tell about a new process that tells us how many is enough

Heard: nothing

Wanted to hear:  Here’s what we’ve done to make sure 2014 meltdown doesn’t happen again.

Conclusion:  Management is completely in “reaction” mode with short term goal of driving up share price to avoid a near-term take over.  There is little or no vision beyond the next 12 months.  Where we’ve been is all we ever need to be.   This is a recipe for a slow death and/or a yard sale.  

I suspect that my view of where Norfolk Southern should be headed is either not realistic or feather's the wrong nests.  

That's why (among a whole host of reasons) I'm not the boss.