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The Penn Central was created as a response to challenges faced by all three railroads in the late 1960s. The northeastern quarter of the United States, these railroads' service area, was the most densely populated region of the U.S. While railroads elsewhere in North America drew a high percentage of their revenues from the long-distance shipment of commodities such as coal, lumber, paper and iron ore, Northeastern railroads traditionally depended on a mix of services.
As it turned out, the merged Penn Central was little better off than its constituent roads were before. A merger implementation plan was drawn up, but not carried out. Attempts to integrate operations, personnel and equipment were not very successful, due to clashing corporate cultures, incompatible computer systems and union contracts. Track conditions deteriorated (some of these conditions were inherited from the three merged railroads) and trains had to be run at reduced speeds. This meant delayed shipments and personnel working a lot of overtime. As a result, operating costs soared. Derailments and wrecks became frequent, particularly in the midwest.
The American financial system was shocked when after only two years of operations, the Penn Central Transportation company was put into bankruptcy on June 21, 1970. It was the largest corporate bankruptcy in American history at that time. Although the Penn Central Transportation Company was put into bankruptcy, its parent Penn Central Company was able to survive.
The Penn Central continued to operate freight service under bankruptcy court protection. After private-sector reorganization efforts failed, Congress nationalized the Penn Central under the terms of the Railroad Revitalization and Regulatory Reform Act of 1976. The new law folded six northeastern railroads, the Penn Central and five smaller, failed lines, into the Consolidated Rail Corporation, commonly known as Conrail. The act took effect on April 1, 1976.
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Brand/Importer Information: Micro-Trains is the brand name used by both Kadee Quality Products and Micro-Trains Line. For a history of the relationship between the brand and the two companies, please consult our Micro-Trains Collector's Guide.
Micro-Trains Line Co. split off from Kadee in 1990 to form a completely independent company. For this reason, products from this company can appear with labels from both enterprises. Due to the nature of production idiosyncrasies and various random factors, the rolling stock from Micro-Trains can have all sorts of interesting variations in both their packaging as well as the products themselves. When acquiring an MTL product it is very important to understand these important production variations that can greatly enhance (or decrease) the value of your purchase.
Item created by: gdm on 2016-09-29 14:07:27. Last edited by gdm on 2017-04-14 16:46:45
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