Southern Pacific Railroad History Center


Gene Harmon


The SP had a very sophisticated costing system. It was used to identify where we were making money or losing it. Across the whole SP system, we had a high cost railroad. One of the components was the situation you described where management was unable to manage. Gradually traffic migrated to other forms and the guys spotting the plants saw the plants close or the business shift to trucks. On a macro level, when inflation was rampant during the late 1970s, we kept asking for across the board rate increases from the ICC to cover increased labor, fuel and declining productivity costs. It could not last and the SP slowly lost the ability to attract enough business to stay in business on its own.

On another note, I knew Bob Thurston after he became head of sales in Houston. He was great to work with. He ran interference for me one day when we were about to have a contract negotiation with Kimberly Clark. I got word that VP Sales Bob Wynkoop was thinking of joining us without knowing anything about the situation. I called Thurston and asked for his help to divert Wynkoop away from the negotiations. He said, no problem, I’ll schedule a golf match. Problem solved.


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