The reason leasing is a craze is because the operating companies "PAY LESS TAX % TO LEASE", instead of the "operating company" owning the units outright. The owners of the "Op Co" (operating company) [CN example] have "Ho Co's" (holding companies) under the same owners. So you have an "Op Co" (on the left hand) and a "Ho Co"(on the right hand) of the same body, and the "Op Co" leases off their sister company "Ho Co" and the tax write off for leasing is 100%. Its a "tax scheme" to pay less tax for what's allowed on the maximum tax write off with the lowest percent of pay-out. Me(Op Co)[left hand] lease engines off my (Ho Co)[right hand] for the maximum legal interest(usury) and my (Op Co) gets the write off for the lease and my (Ho Co) gets the maximum profit from the (Ho Co) because of the interest rate my Op Co paid my Ho Co, and both (Op and Ho) companies end up paying the lowest percentage of tax rate - and I own both companies. Oh and my (Op Co) has a small bank account and my (Ho Co) has a small bank account too because the (Ho Co) is taking the stack of profitable $$$ and investing it, making compound interest, paid by You the "middle class" taxpayer. And to top it all off, the (Op Co) is an employee of the (Ho Co) and the (Op Co) gets paid in "dividends" instead of drawing "wages" or "paid on invoices submitted" which is the lowest tax rate to pay out when you get paid for services rendered. The tax scheme "corporations" have going is brilliant.
Lots of industries operate this way now. I would add that in addition to the tax benefits, leasing frees up valuable capital to grow the business (fund M&A activities, enter a new line of business, develop a new market, etc.). Return on invested capital drives shareholder value. If there’s another cost-effective way to get locomotive, car, technology - you name it - assets, a company isn’t going to burn its precious capital there. These days locomotives are commodities. Capital is best invested in ways that allow a company to grow ideally in ways that differentiate itself in the marketplace. Locomotives are not a differentiator, at least not between comparable railroad companies. If rates stay competitive, I imagine we will see fewer companies in the future with their own “ho cos” with owned equipment rosters as these companies see greater opportunity to funnel cash elsewhere.
@@1_lens_view Clearly there is economic value to leasing versus owning, or it would not be so prevalent. What gets me is the railroads still own hundreds of thousands of tons of idle locomotives, slowly rusting away in yards, while they're leasing locos. I don't see the economic value of letting their owned locos sit idle. In 2011 I went past a BNSF yard in southern California with track after track of locos. In 2015 I saw a similar yard of UP's in northern California (I believe that some of their SD90MACs were housed there for a time), and there's that one long (3 mile?) stretch of single track out in Utah or New Mexico of UP locos just rusting away. I mean, if they aren't going to use them, they could at least sell them for scrap for all that steel to be re-used for something useful.
The government probably got involved when the rail industry was on the down turn and the government came up with these 'write offs' to help save the rail industry. It always seems the government ideas only make the company owners rich, so they can pocket more money, enjoy a lucrative life style, while the average tax payer gets his pockets robbed! It's a very long sick story that gets worse and worse when corrupt people get involved for their own benefit. How much more can our country's economy endure before our country is BANKRUPT??
I agree a standard cab C40-8 is a great looking machine. I remember the first time I saw one (well, it was a B40-8) was in 1991 in Mesa, was a Cotton Belt unit leading a Tucson-Phoenix train on SP. It looked so angular compared with past GE units (the -7 line).
@@silicon212 They vaguely resembled dragsters, with the flared rear vents and angular noses. I think they were the most powerful units on the rails at the time at 4000hp each.
Looks like you spent a lot of time researching to do do this video. Great job. We don't always get to know what goes on with locomotives after the leave the former owners ownership. Excellent video AC. Bravo!!!!!
I live near LTEX's original yard. Nifty to hear them mentioned. Spotted an LTEX switcher in a CBC documentary on the aftermath of the Lac Megantic disaster.
Very interesting eposide. But tell me if I am wrong. I remember reading some decades ago, the reason that GE became the number one locomotive builder, is because the parent owner of EMD, GM, shot themselves in both feet and both heads. They would not let EMD test, lease out locomtives for testing, so that the locomotive could be tested to find out the quirks in them and correct them, so that they would be railroad ready. So, as a result, the locomotives were under surtiny and the railroads didn't like them, then as GM went into bankruptcy and lost billions, the EMD division had to be sold at any cost, and after a couple of sale?, they wond up with the present owners that are trying to rebuild the bussiness from the ground up. I still think the EMD locomotives are the best, despite what has happened, and after listening to different locomotive maintenance people that work on locomtives, the GE's are still garbage cans.
Interesting theory, I don't have any evidence to support or deny anything you wrote.. I like EMDs better also, that's the best reply that I can give you.
Another excellent video, never going to be a GE fan, it's nice to see NS move them along to make room for more interesting stuff... I notice NYS&W ( My local short line ) has mixed in some leased units and even painted a couple. Wonder why they aren't more interested in those sd60's NS was letting go.
Pan Am Got 20 C40-8's in December of 2016, 12 B40-8's , 4 C40-8's in July of 2017, 1 B40-8 Left in Oct 2017 and 1 B40-8 Arrived in Mar 2018 6 C40-8W's in April of 2018 & 3 B40-8's in November of 2018 If more are to show up who knows, i have not heard any rumors yet.
and to think, when I started photoing locos, some of my issues were how to figure out the difference between a late U25B and an early U28B. and to think, when i started out, GM had 80% of the new loco market. but then, there was no internet to inform as you do, thx.
As for the Pan Am units, they aren't getting anymore, they got some of the worst ones from GE for dirt cheap, and the idea was they were going to retire all the EMD's. Well anyway they have found it cheaper to hold into the EMD's, and have been installing PTC and repainting many of them, and are sending some out for rebuild and then selling them to GATX who leases them back.
So a overseas company is working on converting the dash 8 to AC traction, wasn’t that the issue to begin with? As they can’t be converted to AC traction and is why NS in particular is getting rid of theirs or is that not the whole story. But I’ve got to say, it’s sad to see them going away, wasn’t a big fan of them but they are the last virtually untouched relic from Conrail, guess I’m sad also for the standard cab dash-8s NS had as well they were the last GEs to carry SOU reporting marks, can’t recall ever seeing them personally but given they looked virtually identical to the standard cab dash 9s I’m sure I saw them before. Just hope someone remembers to save a dash 8 for preservation before they all get scrapped or shipped to Mexico or Brazil
Don't know anything about AC traction in Dash 8s other than what I mentioned.. Sad to see them leave the Class 1s but they're finding new homes both stateside and abroad.
it's funny, in Australia we have diesels still from the early 50's, the Oldest is a Diesel called GM10, which had entered service June 1952 and still is on mainline active service almost 70 years later, I honestly think it's funny when americans retire modern power because it's too old, while Australia still has 70 year old loco's running with no major plans to retire them soon
Australian National Productions if u think that’s funny, CSX retired power a couple years ago that’s less than 15 years old. Our oldest power would be SD40-2s, GP40-2s and GP38-2s.
I'm just really getting interested in modern railroading, and so far these videos have been super helpful, but is there some kind of roster or list of all the modern diesel types? Its kinda hard to keep track of them all, to me at least, and the strange designations don't help.
Understood.. Start searching online, there are many references but it may take a little digging to find specifically what you're looking if you have a particular preference.. Thanks for watching.
I don't want to be a nuisance but: Are there locomotives still in use with dc generators? Or any rebuilt with the generator replaced by an alternator and rectifiers? Thanks, I'll try doing my own research. Trains are still the means of escape.
No worries, but I'm not sure if I understand your question.. If your're asking are there still locos in America with DC traction the answer is yes.. Most of them have DC motors (when I say most I mean new locos and the old school EMDs, GEs and even some Alco).
@@Trains21 I know that traction motors are only now becoming ac types but I'm betting that generators have been alternators for a while. Only fancy new technology would allow inverters supplying the variable frequency needed for good ac traction drive, but alternators, instead of dc generators, would have looked attractive back when high-power solid-state rectifiers first became available.
@@williamkinghorn6117 All of the EMD 40 series and beyond, with the exception of early GP/SD38s, all have AC main generators (or alternators) to provide power to the traction motors. So at least in EMD's case, everything (again with the exception noted above) is alternator powered from 1965 on. IIRC the DC generator is the limiting factor (2500HP) on the 645C/D rebuilds of old 567 engines.
@@silicon212 Thanks! I found EMD E9 right here in town, fixed-up and used to tow "The Polar Express" (steam) back home each Xmas. It has the original dc generators and it runs. It looks brand new. www.google.com/maps/place/Friends+of+the+261/@44.9952073,-93.2475618,554m/data=!3m2!1e3!4b1!4m13!1m7!3m6!1s0x52b333909377bbbd:0x939fc9842f7aee07!2sMinneapolis,+MN!3b1!8m2!3d44.977753!4d-93.2650108!3m4!1s0x52b32d9e86842f65:0x4435b1c0609a7f51!8m2!3d44.9952036!4d-93.2453737 Google Maps seem to be the only presence they have on the web.
Great video! The Providence & Worcester isn't actually the P&W anymore it was swallowed up by Genesee & Wyoming conglomerate and from what I hear the entire G&W is about to be bought out.
@@Trains21 no problem man...figured you probably did but just in case some viewers didn't. G&W is a customer of ours so when I go to their facilities I get all the latest gossip and news.
@Mass Coastal Railfanning Productions yeah here where I live I barely see any old school P&W painted engines anymore. Btw nice thumbnail. You a New Haven fan too?
In that case, we should just get rid of all cars, trucks, and planes, since they pollute the air way more than any diesel train ever could in a single trip.
I don't really think our ancestors need to breathe any air at the current moment; most having been dead now for quite some time. If you mean 'descendants' .. then possibly a point here but keep in mind that even tier-0 units pollute much, much less than the truck traffic they can replace. I get what you are saying, but railroading is inherently one of the 'greenest' if not the 'greenest' mode of logistics available. On average, a train can move one ton of freight, on one gallon of diesel, a distance of 436 miles or more.
I used to not like GE when I was younger. But as I got older, learned about the history of the Dash 8s and Dash 9s I really started to take notice. Sadly nowadays I only see GEVOs and SD70MACs/SD70ACes anymore with a token SD40-2 or SD45-2 in local or yard service. Never see the Dash 8s anymore and it makes me sad. This is especially poignant as I have been researching Conrail and CSX as I build custom HO scale models. I really came to love the C40-8W on Conrail and CSX as it was THE most common unit on both in the early/mid 90s when I was a kid and enthralled with railroading and railfanning with my grandfather. I saw many C40-8Ws for years and while they didn't make me smile and cheer as much as any EMD (espcially GP38s), they still were Conrail. They still have a place in my heart from a very impressionable period of my youth. Great job as always AC. I really like this in-depth reporting style as I learned a few things and it is both informative, interesting, and well paced to keep attention.
@John Stephenson Huh. Well you are the first person I have talked to who liked the standard cab Dash 8s and 9s. On a related note, there is now a company making standard cab Dash 9s in HO scale if you are into model railroading. Scaletrains.com makes a standard cab "top hat" NS Dash 9 and I know Atlas makes the Dash 8 versions. I own multiple Atlas Dash 8 standard cabs painted in various Conrail paint schemes, even have another B40-8 on order currently. I like them, not as much as the wide cabs, but still do. What makes you like the standard cab especially?
I love how you're one of the few railfans who documents changes in the industry regarding locomotive rosters and technology on RU-vid! Sometimes, even Trains magazine doesn't cover everything!
Yep, gotta love the Dash8's. Last Dash8 I seen from CSX was early 2019 -then three years later my first one from CSX in late May 2022, NS was in late April 2019, UP Dash8 late 2015 -then early March 2019. I seen a few NS Ex-BNSF SD75M's all 2017.
I heard Canadian Pacific bought 30 SD9043MAC's from UP to fill out their order with Progress Rail in the SD70ACU rebuild program. Those would have looked nice running the Canadian rails in the UP scheme, even for a short time. They had some UP SD40-2's for awhile still in UP paint, but lettered for CP Rail. Nice palate of colours in those trains. Very good and informative video AC. CN is returning many of the leased units as they get the new 3000 series locomotives on line.
CP bought 2 units from UP. They had 28 SD90MACs left over after 30 were sent in for the first batch of SD70ACU rebuilds. Once they decided to do another batch, they bought a couple UP SD90s to give them another 30.
Love these style of videos. Have never ran any GE unit on my N scale empire... Just EMD Jeeps and F's. Also RS-3's. I don't remember if you ever did a video on RS 3 through 5's. It's cool to see a string of RS 3/5's chugging along around Steam Town , although a couple of Dash 8's could replace all of them.
Thanks Jim.. No, I haven't focused on the RS3's yet but I'm fortunate enough to see them on the (NS) mainline.. And yes, 1 Dash-8 could put them all out to pasture, or at least close.
Very informative. With all the leasing and/or rebuilding of GE and EMD units, there must be a negative impact on the sale of new units and the subsequent lost opportunity for more advanced technical development.
Thanks. It's a fine video from an ever-fascinating field. I'd really appreciate the name of a trade-journal or other source of technical details from which an electrical engineer, from another field, could learn about the inverters, motors, etc of the new ac traction systems. Thanks again.
Woah woah woah! Did you say the wide cab was stylish?! I usually agree with you, but you're off your nut there lol. High hoods and Spartan cabs forever!!
Badass my friend hey thank you for teaching me about leiser's I've seen them but I didn't know much about leasing locomotive companies and thank you for showing the specs of different locomotives I really enjoyed this video I love it when you talk about locomotives you're so knowledgeable thank you for being such a great teacher peace out AC have a great day
Trains21 excellent job is always my friend I love when you go off on these different tangents that explained it these little niches of railroading that no one ever talks about thanks AC peace out into the world have a great day
@@thedwaynerailfans I strongly Disagree, here are my reasons. 1. Old DC Dash 9’s are being rebuilt, which I’ve already seen a handful of those burnt up already! 2. They took old, unreliable, and purged SD90macs, rebuilt those and somewhat recently sold half of them even after being converted to ACU’s. (Waste IMO) 3.They ended the ACC only after 40 roughly because they felt it wasn’t as successful and something with Cat being their partnership. Now I understand they tried with the super old like 80’s Dash 8’s but not the more recent 94 built Dash 8’s which were very successful and lasted all the way till 2018 without any upgrades and poorly maintained. I conclude that the D8-40CW both CSX & NS if done properly with SERIOUS intentions to actually make a good locomotive and not some halfass project like the 8.5’s then they would most certainly be worth it. These are just my opinions and I respect yours. At the end of the day if there’s no Conrail heritage then there’s no me as I grown up with Conrail locomotives.
@@thebluehero2219 that is valid, bht its way harder to convert an older model such as a dash 8 to AC traction because of how they were build. its doable, but not worth it. ts easier to convert a dash 9 cuz their internals are already easy to work with. NS C6Ms are overall successful, they just overheat easier cuz of only one cooling fan vs 2, which was standard for GE. im not sure hpw many the GEVOs have, but i wanna say 2 NS sold over 40 ACUs because theyre bad in performance. they were built in altoona, and altoona is known to take the cheap way out of rebuilds, thus why theyre crap. ACUs in general is a bad idea and bad in performance. CPs are better maintained cuz EMD/PRLX actually did them themselves and knew what to do. NS just speed ran it to save money. only 4 of their ACUs were actually done by EMD/PRLX iirc
Would be nice if CSX would've kept the ACes and worked out the kinks with them. But the D8s are decent engines. I think their more reliable than the D9s.
@@thedwaynerailfans ever wonder why the D8's, even in their glory days, would barley ever be blowing turbos but the D9's would? That should be a clear sign of which is more reliable
![[GL][T-155] GE DASH-8 Decline, Resurgence and the Locomotive Leasing Craze of 2018 | Trains 21](/img/logo.svg){kind=logo}
