I read Professor Godbys beautiful piece on dieselization he certainly has
gone to great detail Thankyou . Now the American railroad I have always
admired is Union Pacific for their steam engines, they are the only railroad
that did not retire all their steam engines . 844 has never been retired but
the 2-12-2,s the bull moose,s the challengers and even the mighty big boys
all gave way to the diesel and Union Pacific had that great great coal
fired turbine big blow , The Big Boys and Challengers were runnining in
1959 but there was a Steel strike in the United States business in North
America was really hurt and what suffered the most was the steam engine .
The diesel has conquered all .again thankyou professor for your excellent
presentation . Maybe I would have stayed awake in economics class if they
disscussed this as a topic REGARDS DAVID HILL
----- Original Message -----
From: "Robert W. Godby" <rgodby@xxxxxxxx>
To: <cpsig@xxxxxxxxxxxxxxx>
Sent: Tuesday, February 10, 2009 1:54 PM
Subject: RE: [cpsig] Economics of replacing steam
Interesting conversation gentleman! A couple things to note. There was no question about replacing steam with diesel in the US and Canada for a lot of reasons. Once it started it was going to happen and steam really had no chance of staying. The most important issues in the economics off the decision were not technological but economic and very important in the time and place the decision to dieselize in North America took place. In a different place or a different time the decisions may have been different or at least how the changeover was implemented may have changed and the changeover in North America occurred at different times in different places. The change did start though in the 1930s, not 1950s and that played a role as well. It was going to happen here though regardless of what technologies were on the Steam horizon.
Some specific issues that have and have not been discussed (many of these are inter-related and the list would be too long to show all the interactions that increased these arguments further):
- impact of the war (WWII) on diesel technology
- Fuel costs and the structure of the coal industry at the time (particularly unionized labour and strikes)
- impact of diesel on facility needs (maintenance and service facilities)
- impact of the diesel on labour requirements - direct (crews) and indirect (service and maintenance)
- implementation of the diesel to combat the Depression and autos (particularly passenger service)
- implementation of standardized locomotives that could be used anywhere
- parts standardization greatly reducing service costs (traction motors for example can be used on many different locomotive types compared to specialized parts for each steam engine and steam engine type)
- reduced labour specialization required, lowering wage bills and increasing labour flexibility in service and maintenance
- much higher service ratios (steam was "in the shop" much more often than diesels in general)
- impact on financing costs (standardized diesels could be sold to any railroad and therefore could be used as collateral in reinvestment financing and had a higher capital asset value)
- flexibility of the fleet increased by using diesels and their ability to MU or not as service required, creating the need for only a very few types of locomotive versus the specialized steam that had to be built and maintained which increased locomotive cost
- fuel efficiency
- better braking and lowered impact on rails
- pollution issues in urban centres
The case against electrification was the extreme capital cost of electrification across a railway and the impact on operation, which has already been covered well here.
This is just a few of the economies diesels offered across the board. It is true that today you can find and define a few places where some of these issues were not true or didn't matter (for example labour costs were incredibly low in developing countries contributing to the continued use of steam, or the existence of some technologies that could have reduced the efficiency gap had they been implemented) but overall and in sum all of the advantages of diesels meant as soon as diesel technology was ready it was adopted as soon as a railroad could afford it. The idea that steam could have stayed on in North America is a fallacy given the economics of the whole transition period. The differences among railroads in the process of adoption were caused by how pressing these issues were and their ability to reinvest or afford the costs associated with the changeover, combined with some institutional rigidities such as existing labour agreements for example.
If anyone is interested I can send them a very large PowerPoint presentation I use in one of my senior economics classes looking at the case of diesel transition on the Union Pacific (I teach in Wyoming after all!). While the conditions in Canada (and other parts of the US) were different in degree, the overall economics were similar across the two countries. I use it as a case study in technology adoption and the material is copyrighted and will eventually end up in a text and article.
Great discussion! Thanks for all the thoughts!
-rob
Robert Godby
Associate Professor and Chair, Department of Economics and Finance
University of Wyoming
Laramie, WY 82070
307-766-3843
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