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Kansas City Southern Railway
Logo

System map
System map (trackage rights in purple)

KCS 7023 EMD SD50.jpg
A Kansas City Southern EMD SD50 on the point of a train.
Reporting mark KCS
Locale Midwest United States
Gulf of Mexico
Dates of operation 1887 (1887)–Present
Predecessor Kansas City, Pittsburg and Gulf Railroad
Track gauge 4 ft 8+12 in (1,435 mm) (standard gauge)
Length 124.5 mi (200.4 km)
Headquarters Kansas City, Missouri
A new (2008) KCS ES44AC sits in siding in Pittsburg, KS.
KCS SD50 7000 was once a main line locomotive, but now works as a switcher.
The Southern Belle F7A number two (along with a B Unit and another cab unit) travels on the KCS line.
TFM locomotive 1631 travels over track near Monterrey, México.
KCS Headquarters Kansas City, Missouri.

The Kansas City Southern Railway (reporting mark KCS) (NYSEKSU), owned by Kansas City Southern Industries, is the smallest and second-oldest Class I railroad company still in operation.[citation needed] KCS was founded in 1887 and is currently operating in a region consisting of ten central U.S. states. KCS also owns and indirectly operates Kansas City Southern de México (KCS) in the central and northeastern states of México, and is the only Class I Railroad to own any track both inside and outside of Mexico's boundaries. Ferromex is the only other Class I operating in Mexico, and including all trackage owned by wholly owned subsidiaries, KCS owns a total of 6509.6 route miles of track[1].

Kansas City Southern is headquartered in Kansas City, Missouri. Annual revenues as of 2007 were US$1.7 billion with 6,485 employees, and a market cap of roughly US$5 billion.[2] As of first quarter 2008, KCS's CEO is Michael R. Haverty.

Contents

Subsidiaries

KCSI owns four subsidiary railroads: the Kansas City Southern Railway, Kansas City Southern de México, the Texas Mexican Railway, and the Panama Canal Railway.

  • The Texas Mexican Railway Company (TexMex) is wholly owned by KCS. TexMex consists of a 157-mile (253 km) railway that connects Corpus Christi, TX to Laredo, TX. TexMex also owns 400 miles (640 km) of Union Pacific trackage rights that spans from Beaumont, TX to Robstown, TX. With its trackage rights and physical railway, the Texas Mexican Railway connects KCSM and KCSR at Laredo, TX and Beaumont, TX. TexMex also owns the extremely important Texas-Mexican Railway International Bridge. It is the only rail bridge that connects the United States with Mexico through Laredo, and 40% of all rail traffic that travels to Mexico, crosses over this bridge. Without TexMex, it would be nearly impossible for KCSR and KCSM to act as a single company under Kansas City Southern.[3]
  • The Panama Canal Railway Company (PCRC) is jointly owned by KCS and Panama Holdings, LLC of Hazelcrest, Illinois. PCRC provides ocean-to-ocean transshipment service between the Atlantic and Pacific oceans. The 47.6-mile (76.6 km) railroad serves as an efficient intermodal line for world commerce and complements the existing transportation infrastructure provided by the Canal, the Colón Free Trade Zone and the Pacific and Atlantic ports. PCRC's wholly owned subsidiary, Panarail Tourism, offers luxury passenger service for business commuters, tourists and private charters.[3]
  • NAFTA Rail, S.A. de C.V. is the holding company for KCSM because at the time KCS purchased KCSM, the Mexican government would not allow a foreign entity to directly own a Mexican railroad. KCS created this Mexican corporation as a holding company for KCS' ownership in KCSM. NAFTA Rail is wholly owned by Caymex Transportation, Inc., which is owned by KCS.[3]
  • Gateway Eastern Railway Company (GWER) is a wholly-owned subsidiary of KCS. GWER provides rail service over approximately 17 miles (27 km) of track in the East St. Louis, Illinois area.[3]
  • Southern Capital, Development, and Industrial Services Companies: The Southern Capital company consists of bulk storage facilities complete with ocean terminals (Pabtex) along with a tie and timber plant (Trans-Serve, Inc., also known as Superior Tie and Timber). The Southern Development Company is a holding company that owns various properties. The Southern Capital Corporation, LLC is a leasing company owned jointly by KCSR and GATX Capital Corporation of San Francisco, California, Southern Capital Corporation has the rail assets that once belonged to Carland and KCSR, as well as the loan portfolio once owned by Southern Leasing Corporation.[3]
  • Other Minor Subsidiaries: KCS also owns a handful of non-core businesses. These minor subsidiaries, holding companies or minority investments (investments in which KCS has less than 50 percent ownership), have few employees and serve to support the rail operation. These include Canama Transportation, Caymex Transportation, Inc., Rosenberg Regional LLC, Joplin Union Depot, Kansas City Terminal Railway, Port Arthur Bulk Marine Terminal Co. and Veals, Inc.[5]

History

Arthur Edward Stilwell began construction on the first line of what would become the Kansas City Southern Railway in 1887, in suburban Kansas City, Missouri. Together with Edward L. Martin, Stilwell built the Kansas City Suburban Belt Railway, which was incorporated in 1887 and began operation in 1890, serving the Argentine District in Kansas City, Kansas; Independence, Missouri; and the riverside commercial and industrial districts of Kansas City. While the Belt Railway was a success, Stilwell had a much bigger dream. Over the ensuing decade, the line grew through construction and acquisitions to become a through route between Kansas City and Port Arthur, Texas, with the final spike being driven north of Beaumont, Texas, on September 11, 1897, the Kansas City, Pittsburg and Gulf Railroad Company (KCP&G) was completed. In 1939, another mainline between Dallas and New Orleans, via Shreveport, Louisiana, was added through the acquisition of the Louisiana and Arkansas Railway (L&A). From 1940 to 1969, Kansas City Southern operated the Southern Belle passenger train between Kansas City and New Orleans, along with regular freight transportation.[6] In 1962, under the name Kansas City Southern Industries, Inc. (KCSI), the company was formally organized as it began to diversify its interests into other industries under the CEO William Deramus III.

The new KCSI focused primarily on the financials industry, along with the rail industry. In 1969, KCSI started the two largest companies that came out of the diversification, DST Systems (NYSEDST) and Janus Capital Group (NYSEJNS) which was known as Stilwell Financial at the time.[7][8] DST Systems is a software development firm that specializes in information processing and management, with the goal of improving efficiency, productivity, and customer service.[9] Janus Capital Group is a finance firm that provides growth and risk-managed investment strategies.[10]

The core KCS rail system remained essentially the same until the 1990s, when the purchase of MidSouth Rail extended KCSI's reach eastward from Shreveport and into Mississippi and Alabama. This acquisition, combined with existing KCSI routes, created a key east-west mainline marketed as the Meridian Speedway. An additional acquisition, the Gateway Western Railway, extended KCS's reach from Kansas City to St. Louis, Missouri, and to Springfield, Illinois.

The 1990s also saw KCSI extend its reach into Mexico, with the acquisition of partial interests in the Texas Mexican Railway (TM) and Grupo Transportación Ferroviaria Mexicana (TFM). TFM was created when Kansas City Southern Industries and Transportacion Maritima Mexicana (TMM) purchased a government concession to operate on a rail system in Mexico. It was the most sought after portion of the Mexican railroad concessions[citation needed], called the Northeast Railroad, that was purchased by KCSI and TMM. The concession was also bid on by many other major companies, including the United State's largest railroad company, Union Pacific Railroad. KCSI and TMM bid on, and won, the concession for $1.4 Billion USD, paying 49% and 51%, respectively. TMM already partially owned the Texas Mexican Railway through a previous concession from the Mexican government. TM was particularly important to KCSI because they held the link from KCSI tracks to TFM tracks via trackage rights over the Union Pacific line. Shortly after acquiring the Mexican government's concession, KCSI entered into another joint venture to purchase a government concession. On 19 June 1998 the government of Panama turned over control of the Panama Railway to Kansas City Southern Railroad and the privately held Lanigan Holdings, LLC. This created the Panama Canal Railway Company (PCRC).

After these large capital outputs, KCSI needed new capital to improve the Mexican and Panamanian concessions they had purchased, and to continue to make capital expenditures in the future. To build this needed capital, KCSI spun off all assets that were not essential to the rail businesses. Doing this essentially paid off the purchase of their two existing concessions and freed up capital to improve them.[11] The first major improvement that took place was in 2000 and 2001 when the PCRC upgraded the railway to handle large, intermodal shipping containers, along with passenger transport.

In 2002, the Kansas City Southern Industries formally changed its name to Kansas City Southern (KCS) after it had successfully spun off many subsidiary businesses that were not directly related to the railroad business (the largest of which were Janus Capital Group and DST Systems).[12] In 2005, Kansas City Southern purchased TMM's share in TFM and TM, giving them full ownership of the companies. TFM was officially renamed Kansas City Southern de México, S.A. de C.V.[12] The Texas Mexican Railway withheld its original name and is a subsidiary of KCS.[13]

In June 2009 the Kansas City Southern began operating on new trackage between Victoria and Rosenburg, Texas, known as the Macaroni Line [14]. The line was originally built in 1882 between Victoria and Rosenburg, and was called the Macaroni Line because the main source of food for the workers constructing the line was macaroni. However, it was acquired by Southern Pacific in 1885. Southern Pacific operated the line for a full century of regular service, then in 1985, the last regularly scheduled train ran over the 91 mile line. By the early 1990s, the tracks were mostly torn out. In 2006, the KCS announced that they would rebuild the Macaroni Line through subsidiary Tex Mex, in order to end the need for trackage rights on a circuitous Union Pacific route which took them way out of the way. Construction began on January of 2009, and the line was opened for the first trains in over 20 years by June of 2009, right on time. You can see on the KCS system map on the top of this article where in Texas, there is a portion of straight red line, and a pink line shaped like a half circle goes around it. The red line is the newly rebuilt section now owned by KCS, and the pink half-circle shaped routes which connects the same two endpoints as the red line are the old circuitous trackage rights which they used to use. The line now operates daily trains and has been installed with CTC signaling.[15][16][17]

Awards and recognition

The E. H. Harriman Award is an award for rail safety. KCSR has been consistently recognized for its employee safety record (in group B: line-haul railroads with between four and 15 million employee hours per year) by the E.H. Harriman Memorial Awards Institute with a Gold Award in 2001, 2002, 2006, 2007 and 2008, Bronze Award in 2003 and 2004 and a Silver Award in 2005[18][19]

Controversy

Kansas City Southern Railway is currently involved in a lawsuit regarding race-based employment discrimination in "violation of Title VII of the Civil Rights Act and 42 U.S.C. § 1981".[20] The plaintiff alleges he was refused reinstatement based on race and that other employees of similar responsibility and disciplinary history were granted reinstatement despite their record. The case has seen hearings before the Public Law Board, the Federal Railroad Administration, and federal courts. Though the case was initially ruled in favor of KCS by a district court the ruling has been overturned by the United States Fifth Circuit Court of Appeals.

Company officers

The following is a list of the executives heading KCS since 1889.[21]

See also

References

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Notes

  1. ^ http://www.kcsouthern.com/en-us/KCS/Pages/CompanyProfiles.aspx
  2. ^ "KSU Stock Quote and Company Profile". CNN Money. 2008. http://money.cnn.com/quote/quote.html?symb=KSU. 
  3. ^ a b c d e f g Kansas City Southern (July 2008). "Company Profiles". Kansas City Southern Lines. http://www.kcsouthern.com/en-us/KCS/Pages/CompanyProfiles.aspx. Retrieved 2009-04-24. 
  4. ^ The China-Kansas Express, a June 2006 "Forbes" article
  5. ^ Kansas City Southern Company Profiles, Kansas City Southern Industries.
  6. ^ Kansas City Southern (July 2005). "Southern Belle". Kansas City Southern Lines. http://www.kcsouthern.com/en-us/KCS/Pages/SouthernBelle.aspx. Retrieved 2008-07-07. 
  7. ^ Yahoo! Inc. (July 2008). "Summary of DST Stock". Yahoo! Inc.. http://finance.yahoo.com/q?s=DST. Retrieved 2008-08-01. 
  8. ^ Yahoo! Inc. (July 2008). "Summary of Janus Capital Grp. Stock". Yahoo! Inc.. http://finance.yahoo.com/q?s=jns. Retrieved 2008-08-01. 
  9. ^ DST Systems (July 2008). "DST Corporate Website". DST Systems. http://www.dstsystems.com/. Retrieved 2008-08-01. 
  10. ^ Janus (July 2008). "Janus Capital Grp. Corporate Website". Janus. https://ww3.janus.com/Janus/Retail/StaticPage?jsp=jsp/umbrella/UmbrellaPage.jsp. Retrieved 2008-08-01. 
  11. ^ Kansas City Southern (July 2008). "Purchases of the KCS Railway". Kansas City Southern Lines. http://www.kcsouthern.com/en-us/KCS/Pages/History.aspx. Retrieved 2008-07-07. 
  12. ^ a b Kansas City Southern (July 2008). "History of the Kansas City Southern Railway". Kansas City Southern Lines. http://www.kcsouthern.com/en-us/KCS/Pages/History.aspx. Retrieved 2008-07-07. 
  13. ^ Heaster, Randolph (December 6, 2005). "Kansas City Southern railroad has new name". Kansas City Star. http://www.kansascity.com/mld/kansascity/business/13336418.htm. Retrieved 2005-12-06. 
  14. ^ "Kansas City Southern to route traffic onto "Macaroni Line" June 17". http://www.trains.com/trn/default.aspx?c=a&id=5175;KCS&page=quotesearch. Retrieved October 26, 2009. 
  15. ^ http://www.cityofwharton.com/articles/restoration_of_the_railroad_dept
  16. ^ http://www.victoriaadvocate.com/news/2009/jun/18/sl_kcs_starts_061809_54980/
  17. ^ http://www.flickr.com/photos/nordique72/sets/72157617594387257/
  18. ^ .Association of American Railroads (reprinted by Norfolk Southern Railway) (2006-05-16). "Railroads Set Another Employee Safety Record in 2005". http://www.nscorp.com/nscorp/application;JSESSIONID_nscorp=E0D2wDZLZ8t844Gn6WZDlSVqmCEM2UEJtEicpNZ1tBcpy4wFlISk!-1862265230?origin=content.jsp&event=bea.portal.framework.internal.refresh&pageid=NS+News&contentId=english/nscorp/news/whats_new/whats_new/news051606.html. Retrieved 2006-05-24. 
  19. ^ Kansas City Southern (2008). "KCS Safety". http://www.kcsouthern.com/en-us/Employees/Pages/Safety.aspx. Retrieved 2008-08-04. 
  20. ^ http://www.ca5.uscourts.gov/opinions/pub/08/08-30444-CV0.wpd.pdf
  21. ^ KCS Presidents from the website of the Kansas City Southern Historical Society

Sources

Specific references:

General references:

External links


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