Whistle Stopped

A proposed railroad merger threatens jobs throughout Colorado -- and, up in Minturn, a way of life.

As much as she loves the rail line running through Minturn, Goodell knows its days as a rail town may be drawing to a close. She dreams of starting a rail museum to preserve Minturn's heritage, and she's tracked down an old Rio Grande dining car in Grand Junction that she wants to bring to the town. "I've even gotten estimates on what it would cost to move it," she says.

Goodell already has enough railroad memorabilia in her apartment to stock a small museum, including a collection of signal lanterns, old Union Pacific and Rio Grande timetables, and dozens of vintage photos that show trains passing through Minturn in turn-of-the-century snowstorms and steam locomotives being moved around on the turntable. "I don't have enough room to put all the photos up," she says. "My daughter used to complain about all the railroad stuff around the house."

Southern Pacific officials have told Goodell they can't make a decision on what to do with the vintage dining car before the merger, and Goodell fears the car will be dismantled for parts in the meantime. Like everyone else in Minturn--a town founded by the Rio Grande in 1887--Goodell will have to wait to see how the decisions made by powerful people far away will affect her hometown.

"The railroad is part of our life--I hate to see it go," says George Sisneros, a former city councilman who frequently enjoys the daily lunch specials at the Turntable. "Everyone sees the writing on the wall. We know it's coming, and we're trying to deal with it."

The forces that may doom the railroad in Minturn are formidable and involve some of the wealthiest, best-connected players in Colorado. Along with Anschutz, they include Denver's most powerful law firm, Brownstein Hyatt Farber & Strickland, one of whose name partners, Tom Strickland, is now conducting a run for the U.S. Senate. Together those interests are working full-time to push through a merger that will deprive huge parts of Colorado of any rail service and cost the state more than 1,000 jobs while making Anschutz hundreds of millions of dollars.

When the merger was announced last August, it was estimated that Anschutz would make more than a billion dollars off the deal, quintupling his original investment in the railroad. And the corporate dream team he assembled to run the Southern Pacific won't go begging, either. According to Trains magazine, the railroad's top officials will split a $12 million golden parachute should the merger go through. Chairman and chief executive officer Jerry Davis will leave with a particularly sweet deal: Trains reports that the railroad has agreed to forgive the remainder of a six-figure home loan Davis received for his Denver-area mansion.

Anschutz put together a $1.8 billion deal for the Southern Pacific in 1988, but $800 million of that was assumed debt, and most of the rest was borrowed. The Denver mogul merged his Rio Grande into the Southern Pacific, then began laying off employees and slashing costs to pay off the huge debt he'd taken on to acquire the larger railroad. While many beleaguered Southern Pacific employees resented Anschutz, Wall Street cheered as the railroad began to turn a profit for the first time in years.

If he can pull it off, the $5.4 billion sale of the Southern Pacific--which is essentially what the proposed merger would amount to--would be the biggest deal of Anschutz's career. It would also create the largest railroad in the country, a Union Pacific behemoth with 37,000 miles of track radiating from Chicago to Seattle and from Los Angeles to New Orleans. The only significant rail competition for Union Pacific would come from Burlington Northern Santa Fe, which has routes along Colorado's Front Range and in eastern Colorado and was itself created by the 1995 mega-merger of its carriers. In the western two-thirds of Colorado, there would be just one rail line.

Union Pacific has made it clear it will have no use for the Tennessee Pass line that runs through Minturn if the merger goes through. "It's slow and difficult to operate," says John Bromley, a Union Pacific spokesman at the railroad's Omaha base. "We'll divert most of that traffic to southern Wyoming." The small towns along the route that owe their existence to the railroad will lose a big part of their history. But the biggest losers in the buyout will be the 1,500 Coloradans who will see their jobs disappear, including most of the employees at Southern Pacific's administrative building in downtown Denver.

"A lot of the younger people are worried," says one longtime Southern Pacific employee who asked not to be named. "They're liable to get sent around the country. We've been through so many crises in the last 25 years, we all feel like survivors."

And some fear that the railroad merger could also decimate whole industries in Colorado, especially mining and agriculture. Union Pacific, for example, plans to abandon a former Missouri Pacific rail line that runs from Pueblo to Towner on the eastern plains, serving farmers and grain shippers on what once was the route of the MP's heralded Colorado Eagle passenger train. That part of southeastern Colorado is already depressed, and the prospect of losing a major rail line is alarming to farmers. "We're concerned about being served by a single railroad and losing an affordable means of shipping," says Andy Colosimo, spokesman for the Colorado Farm Bureau. "That area is really struggling. This could be another nail in the coffin."

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