PAR: Not For Sale

Individual Rail Operating Units Boston & Maine (B&M), Springfield Terminal, (ST), Maine Central (MEC), Portland Terminal (PTM), and Half Of Pan Am Southern (PAS) are What’s For Sale; The “PAN AM” Name And Branded Entities are Not.

history of Pan Am logoPan Am Systems, evoking the once-glamorous international air carrier, replaced the Guilford Transportation Industries’ moniker in 2006. GTI acquired the Pan Am name out of bankruptcy in 1998, with the rest of the airline’s remaining, meagre assets. Headquartered in Portsmouth NH, PAST controls Pan Am Railways, (ex-Guilford Rail Systems), the railroad crosstie businesses, and other assets {Wikipedia}.

In his 2015 autobiography, panam.captain , Timothy Mellon describes the Pan Am acquisition, and the subsequent efforts to revive the airline, which ultimately failed when the FAA rejected PAS’s effort to bust the aircrew unions. Mellon’s fondness for the Pan Am legacy is made clear, and despite being painted on PAR’s locomotives, the brand is not is not tied to the railroad operations. Mellon does not have to give up his iconic possession to jettison his railroads. That’s just as well, because while bidders may be eager to pull in Pan Am’s cash flow, they will be content to leave its reputation on the table.

Liftoff

When GTI began acquiring failing New England railroads in the early 1980s, they wisely retained the legacy entities, rather than amalgamating them. The multiple-operating-entity structure of PAR has, since the Guilford Rail Systems (GRS) origins, been skillfully managed by Guilford Transportation Industries (GTI)/Pan Am Systems (PAST). In the 1980s, the tiny ST’s (originally a B&M subsidiary) weak Ayer auto yard UTU contract was cleverly exploited, along with aggressive abandonments, to undercut the more traditional union agreements throughout the Guilford system.

Today, ST crews operate all PAR trains (including PAS). B&M, MEC, and PTM employees – their terms having been rolled back – operate the fixed assets. In the meantime, the cross-connected corporate structure has been helpful in railroading customers, courts, agencies, and tenants, while innovating the modern minimums for track standards.

drawing of the various cuts of beefPlanning it all along?

Every sound business plan includes an exit strategy. PAR’s “modular” structure may play a role in PAST’s announced sale of Pan Am Railways, by presenting an a la carte menu of different options to suit various discrete buyer interests. PAS owns most of the B&M trackage, from Rotterdam Jct. NY to Ayer MA, plus several branch segments. B&M retains sole control between Ayer and Portland ME. MEC controls all track north of Portland. NS’s presumed RFR on PAS doesn’t need to hinder a second party’s interest in the MEC; or a third’s plans for the Boston – Portsmouth – Portland “seaboard cluster.”