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History

   This is a detailed history of Penn Central Transportation Co. It spans from the day merger talks were introduced, up until the present day.

Countdown to Bankruptcy

     On the day of November 1, 1957, the an official merger study was announced by both James Symes (then-CEO - PRR) and Robert Young (then-CEO - NYC). Unfortunately, Young committed suicide on January 25, 1958, as a result of the NYC losing passenger business rapidly and also the fact that New York Central (NYC) wasn't going to survive. In his place, Alfred Perlman was named Chief Executive Officer of the NYC. Perlman had a great fear of the merger, however, and he cut off the merger talks on Jan. 12, 1959. He thought that it would be too great a risk to take.
     On May 18, 1960, the B&O and the C&O merger was approved by the ICC to form the B&O-C&O Lines, much to Perlman's disgrace. Perlman thought it would be better to merge with the C&O or the N&W, rather than arch rival Pennsylvania Railroad.
     Ultimately, merger talks did resume on October 25, 1961 and on January 12, 1962, the merger of the NYC and the PRR was approved by both boards of the two railroads. Later, on August 1, 1962, the ICC began hearings on the merger, which lasted about 14 months.
     In light of the situation at hand, James Symes stepped down as the CEO of the "Pennsy" and Staunt Saunders was named CEO in his place on October 1, 1963. Finally, the ICC approved the merger on April 27, 1966, but it wasn't completely over yet. Court hearings would last 2 more years. At last, the long awaited day. The NYC-PRR merger became official on February 1, 1968 at 12:01am. Saunders became the CEO, Perlman became the president and David Bevan became the Financial Chairman of newly created Penn Central Trans. Co.
     On January 1, 1969, Metroliner began service from Washington D.C., to Boston, MA. On the same day, the New York, New Haven & Hartford Railway was included in the Penn Central system.
On November 30, 1969, Alfred Perlman resigned and Paul Gorman was named the new president of PC.
     The severe winter that lasted from December 1969 'til March 1970 buried the East in snow. This act of nature cost the Penn Central $20 million. Later, on June 8, 1970, Saunders, Bevan and Perlman were fired, as they kept secret the fact that PC was indeed going bankrupt, contrary to other reports. Before this time, PC was losing a total of $500,000 a day, forcing Penn Central into bankruptcy on June 21, 1970.

The Rough Years

     On May 5, 1971, Amtrak was created, to alleviate railroads from hauling America's passengers. Soon, all the railroads were following in Penn Central's footsteps. One by one, they all dropped. The Reading (pronounced Red-ing) Railroad went bankrupt on November 23, 1971.
     On January 24, 1972, the ICC began investigations into PC. In less than a month, on February 11, 1972, Paul Gorman named Vince McLaughlin Financial Chairman and Greg Fuller named the president.
     Then, two other railroads went bankrupt. They were the Lehigh & Hudson and the Erie Railway. The L&H hit bankruptcy on April 18, 1972 and the Erie on June 26, 1972. But, the Erie later reorganized under Article 77 to form Erie Transportation on February 20, 1973.
     Later, on March 1, 1974, government indictments were handed down. Bankruptcy Court hearings begin on June 1, 1974. Also, on February 26, 1975, the USRA (United States Railway Association) issued a plan for a restructuring of Northeastern railroads. On July 28, 1976, the Railroad Revitalization & Regulatory Reform Act was passed by Congress. This act bailed out PC, and, in return, Penn Central would incorporate the other 4 bankrupt railroads. This act was later signed by Gerald Ford on February 5, 1977.
     The next year, 5,000 employees were laid off in late 1978. The PC was then plagued by problems such as bad weather, UCW strike and a recession, setback the PC thru 1981. The PC (during setback) hit a record low, while the government feared disaster on December 5, 1980.
     Strangely though, the PC had a major turnaround and shipments went up 40%. The future was promising for PC after December 25, 1981. The Bankrupt Erie Transportation was later incorporated into the Penn Central system on April 15, 1983. The next year, the railroad finally turned it's first profits on February 3, 1984.

The Turnaround

     Penn Central soon came up with a program called the "Penn Central Car-save Program" which went into effect on January 1, 1985. Two years later, the government loans were finally paid off on January 20, 1987, and Bill Moore became a financial hero!
     Later in '87, the very first paint scheme study was announced. This was the first time a new paint scheme had been thought of since the railroad's creation. On October 1, 1988, the first major purchase of motive power began - the first in 10 years!
     Eventually, at the age of 81, Staunt Sanders died on June 7, 1989.
     Months later, a massive IAM walkout occurred on October 16, 1989. This strike would last approx. 2 months.
     Also, Paul Gorman died in an auto accident and Greg Fuller was named CEO on November 27, 1991. The next year, a new paint scheme was finally introduced on February 1, 1992.
     The BLE and Teamsters started strikes that lasted 3 weeks, nearly crippling the Penn Central. Meanwhile on January 1, 1995, PC's "Car-save Program" completed the 10-year objective of 10,129 freight cars either rebuilt or scrapped.
     William Moore retired and Edward Claypole was named CEO on August 24, 1995.
     Alfred Perlman unfortunately died at the age of 94 on May 9, 1996.
     As a milestone in Penn Central's history, the PC revenues reached an all-time high of $15 billion, and payroll was $2.4 billion.

The Present

     Currently, Penn Central is among the largest Class I railroads. At present, PC's future is looking bright. We, here at Penn Central Transportation Company, want to extend our gratitude to the fine men and women who have made PC what it is today. For without them, it wouldn't be here.
     Each year, Penn Central holds a photo contest for PC's yearly calendar. Employees send in photos they have taken of PC and the lucky grand prize winner receives 100 calendars and $5,000. Year 2003's calendar is a great one. Let's make 2004's even better!!
     Safety has also been another goal of the railroad. Each month, twenty-four employees are injured. That's twenty-four too many. But, it has significantly dropped over the past four years. At this time four years ago, forty-six workers were injured each month. There has been a steady decline of such injuries. Let's make this year the best year we've had yet as our goal is "Driving for '0' Accidents."

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Copyright © 2002-2003, Penn Central Transportation Company.
Please note that this is a defunct railroad. The phone number is not real as well. This is based on the N scale "Penn Central Sterling Heights Subdivision" model railroad.

This page was last updated:
05/10/2002 17:13:35 EST