CN
CN
CN Network Map Contacts Site Guide FAQs Fran├žais Search Emergency: 1-800-465-9239

Company Information

History


From about 1960 on, the U.S. rail industry had struggled through a period of decline, losing market share to trucking at an alarming rate. Rigid regulation and restrictive work rules left the railroads with little flexibility to reduce fixed costs or respond rapidly to changing markets. Bankruptcies abounded. By the mid-1970s, the viability of much of the industry seemed threatened.

Then the Staggers Rail Act changed everything. Largely freed from regulatory shackles, the industry quickly began to recover. Much light-density or duplicate trackage was abandoned or transformed into thriving short line railroads. At the same time, another wave of mergers rolled over the industry, creating massive rail corporations in both the east and the west.

The Soo Line, a 4,700-mile CP Rail subsidiary in the U.S. Midwest, moved to protect its position by acquiring the bankrupt Chicago, Milwaukee, St. Paul and Pacific Railroad (the Milwaukee Road). However, the acquisition greatly increased Soo's debt and created considerable duplication in parts of its network. So in 1986 Soo decided to form a "railroad within a railroad" - the Lake States Transportation Division - to operate some 2,000 miles of its trackage in Wisconsin and upper Michigan as a separate division.

Soo hoped that the "railroad within a railroad" could operate much more economically than its parent. But within a year, Soo realized that the hoped-for economies would only develop slowly, if ever. Before long, word went out that the Soo Line would entertain offers for the Lake States Transportation Division (LSTD).


Soo Line's announcement quickly attracted the attention of rail industry veterans Edward Burkhardt and Thomas Power. Burkhardt and Power firmly believed that the industry could prosper, freed from outdated regulation and rigid work rules and willing to shed its traditional indifference to customer service. Soo's Lake States Transportation Division presented an ideal opportunity to apply their philosophy.

On April 3, 1987, Soo Line announced the sale of LSTD to the Wisconsin Central Transportation Corporation (WCTC), a new company formed by a consortium of investors, including Burkhardt, Power, former Illinois governor Richard B. Ogilvie, and Robert H. Wheeler, along with Ronald G. Russ and Thomas W. Rissman. The company's name was well-chosen, harking back to a railroad that many years earlier had operated much of the trackage involved - the Wisconsin Central Railway. WCTC's owners also took a page from the past in choosing a logo for their new enterprise: the original Wisconsin Central's shield emblem, which it had adapted from the state's coat of arms in 1885.

During the next few months, the new company quickly took shape. WCTC itself would constitute a holding company with three subsidiaries. One, Wisconsin Central Ltd. (WC), would operate the railroad. Another, WCL Railcars Inc., would own or lease the railroad's locomotives and cars, while the third, Wisconsin Bridges Inc., would own the Sault Ste. Marie Bridge Company.




Within a few months, WC was ready to roll, with an official launch date of September 11, 1987. Then out the blue, on the very day of the planned start-up, the Interstate Commerce Commission (ICC) imposed a 45-day delay so that it could further study the "unusually large and significant" transaction. All of WC's well-laid plans had to be placed on hold. Then just as suddenly, a wave of protest arose.

The governors of Wisconsin and Michigan as well as U.S. senators and representatives from both states, along with numerous shippers, communities, and employees bombarded the ICC with phone calls and letters.

The tactic worked. On October 8 the ICC backed down and declared that the stay would be lifted as of October 11. Over the next three days, WC officials worked frantically to close the deal and ready the railroad for business. And they succeeded. Bright and early on Sunday, October 11, 1987, WC's first train left Stevens Point en route to North Fond du Lac.


During the early years, WC concentrated on upgrading track and equipment so that it could improve service and attract new business. WC turned a profit in its very first year and each year thereafter reported substantially higher traffic and revenue. Within a very short time, shippers and industry-watchers began to take notice. As early as 1989, Distribution magazine (now Logistics Management and Distribution Report) named it a "Quality Carrier," a distinction WC has continued to earn year after year. In 1990 three of WC's biggest customers singled it out for outstanding service. Then in 1992, Railway Age named it "regional railroad of the year."

By 1991 the company was flourishing, but still held a significant debt dating back to the original purchase. So in May 1991 WCTC went public, raising $36.2 million. Another stock offering the following year raised $48.7 million.


Wisconsin Central's ambitions soon began to expand beyond its own territory. One obvious opportunity lay in establishing a connection between Chicago and Duluth/Superior, gateway for traffic to and from the western part of the continent. Although WC already had a connection between Chicago and Duluth/Superior via trackage rights over the Soo between Ladysmith and Superior, WC was not allowed to handle overhead traffic between Superior and connecting railroads at Chicago.

In 1990 WC approached Soo with an offer to buy the line, but Soo's price was more than it was willing to pay. So the company arranged to purchase the Chicago and North Western's trackage between Superior and Cameron, 34 miles west of Ladysmith. However, the Soo/WCTC sales agreement also stipulated that Soo had the right to compel WC to buy the Superior/Ladysmith line if it acquired another route to Superior. Thus by mid-1992, WC found itself the owner of two routes to Superior running roughly parallel from points on its east-west main line.

WC then carved a single route out of the best portions of each line - the shortest of any railroad between Duluth/Superior and Chicago.

The Superior/Chicago route firmly established, WC promptly began vying for business from the west. In 1996 it teamed up with CN and CSX Intermodal to inaugurate a new intermodal service between west and east. They named it "The Superior Connection". The following year, WC began handling CN's own intermodal trains between Superior and Chicago and in 1998 undertook to handle CN's carload trains as well.


Management knew that network expansion would lead to significantly higher traffic and revenues. Within five years of start-up, the company embarked on an aggressive acquisition campaign to expand its presence - not just in Wisconsin but on a global scale.

First WCTC acquired the Fox River Valley Railroad and the Green Bay and Western Railroad from Itel Rail Corporation through a new subsidiary, Fox Valley & Western Ltd., in 1993. Adding 479 miles to the system, the acquisition gave WC much stronger access to Green Bay and major paper mills and other industries in the Fox River Valley and Western Wisconsin. Largely as a result of this important acquisition, revenues and carloadings jumped 39% the following year.

WCTC then pounced on an opportunity to export its entrepreneurial management style to the other side of the world with the privatization of New Zealand Rail Ltd. The board of directors succeeded in assembling a consortium of investors (including WCTC), which purchased the railroad in September 1993 and subsequently named it Tranz Rail Ltd. A new WCTC subsidiary, Wisconsin Central International (WCI) would hold a 27% interest in the company and also received a contract to manage its operations.

Then in January 1995 WCTC expanded north of the border, purchasing the 322-mile Algoma Central Railway (AC) from the Algoma Central Corporation through a new subsidiary, WC Canada Holdings. The acquisition gave WC access to iron ore and timber resources along AC's main line from Sault Ste. Marie, Ontario, north to Hearst, Ontario.

WCTC capitalized on the privatization of British Rail's operations to launch its first European venture in 1995. A WCTC-led consortium acquired Rail Express Systems Limited, which carries some 25% of Britain's first-class mail. Early the following year, WCTC spearheaded yet another consortium to purchase 90% of three trainload freight companies, which were combined as English Welsh and Scottish Railway Holdings Limited (EWSR). Then in 1997, the consortium acquired another two rail freight companies in Britain.

Further expansion in northern Wisconsin and upper Michigan came early in 1997 when WCTC's Sault Ste. Marie Bridge Company acquired 207 miles of trackage from the Union Pacific Railroad. Connecting Green Bay with Ishpeming, Michigan, the trackage not only extended WCTC's reach into important production areas but shortened routing distances between key centres.

Later that year, WCTC launched a further foray on the international scene when it formed a consortium to acquire Tasrail, a 300-mile line on Tasmania, Australia's island state. WCTC formed a new subsidiary, Australian Transport Network Limited, to hold its one-third interest in the business and operate the railroad. Six months later, ATN acquired another railroad on Tasmania, the Emu Bay Railway.


By 2001, Wisconsin Central could look back on an astounding record during the 14 years since it was founded. Excluding overseas operations, traffic volume had grown by more than 300%. Annual operating revenue had risen during every year of the company's existence, and in 2000, was more than three times greater than it had been during the first full year.

Mileage had grown from about 2,000 to almost 2,800. Employment had risen from 662 to about 2,200. The size of the locomotive fleet had nearly tripled to 244 diesel units, while the number of rail cars had more than quadrupled to some 13,200. WC now ran an average of 120 trains each weekday compared to just 36 at start-up.

Wisconsin Central had capitalized on every opportunity that had come its way. It had demonstrated beyond question that its trademark style - fast-moving, entrepreneurial, and customer-friendly - constituted a ticket to success in regional railroading - not just in North America but around the world.

However, management realized that despite continuing to post record revenues, WC faced a less certain future as an independent regional. Service problems were eroding the business of major connecting railroads. WC had become vulnerable to industry developments beyond its territory and control. Meanwhile, even though North American operations continued to flourish, WCTC's businesses abroad needed extra nurturing.

It was clear that the time had come to join forces with another railroad - a railroad that shared the same philosophy - in a combination that would make perfect sense both geographically and from a business perspective.

On January 30, 2001, Wisconsin Central and Canadian National announced that they had reached an agreement on CN's acquisition of WC. When the U.S. Surface Transportation Board released its final approval of the transaction on September 7, 2001, CN President and CEO Paul M. Tellier welcomed both the decision and the opportunity to build an even stronger NAFTA network for the benefit of customers, stockholders, and employees. Said WC President and CEO Thomas Power: "It's time for WC to become part of a larger North American rail network, and CN is the perfect partner."