The purpose of this study was to determine the savings which would be realized by pooling locomotives under a single operating control, and to summarize the savings that would result from releasing locomotives in other merger studies. Savings on locomotives released reflected depreciation and interest on net cash realized and were estimated at $260,833 annually.
It was assumed that the locomotive power pool on the present Western District of the Erie would remain unchanged. Through freight service in the study area was analyzed for a test period and it was determined that four units could be saved in addition to those saved in other studies. Larger savings are not possible because the proposed cycles were based on schedule protection during peak periods which are substantially the same on both roads.
Net locomotive units released as a result of the various merger studies would be as follows;
Road
Yard Freight Passenger Total
I - Common Points 17 6 - 23
II - Duplicate Lines - 2 - 2
III - Duplicate Freight Trains - 9 - 9
VII-L - Equipment Pools - Locomotives - 4 - 4
VIII-P - Repair Facilities - Passenger
Train Cars 1 - - 1
XV - Effect of Merger on Lines
Retained 2 I 1
XXI - Duplicate Passenger Trains - - 2 2
------- ------ ----- -----
Totals 16 22 2 40
I - denotes increase
SUMMARY
A. Net Cash Realized
Salvage Resale
1. Salvage and resale value of Value Value
locomotives released:
16 yard units $32,758
22 road freight units $550,000
2 passenger units 120,000 $702,758
2. Non-Recurring Income Tax Saving 180,899
3. Net Cash Realized $883,657
B. Estimated Savings in Expense
1. 5% Interest on $883,657 $ 44,183
2. Annual Depreciation
16 yard units $ 46,218
22 road freight units 148,040
2 passenger units 22,392 216,650
3. Estimated Annual Saving $260,833
