Montana ag groups feel little will change with BNSF sale
(The following story by Jo Dee Black appeared on the Great Falls Tribune website on November 4, 2009.)
GREAT FALLS, Mont. — Montana Grain Growers Association President Bing Von Bergen had no idea Warren Buffett's Berkshire Hathaway was working on a deal to buy BNSF Railway Co., the predominant railroad in Montana, but he wasn't surprised when the news broke Tuesday morning.
"These kind of things take place in corporate America all the time," said Von Bergen, a Moccasin-area grain farmer.
Still, the news commanded his attention.
"We're hoping this won't change anything and we don't anticipate it will," said Von Bergen. "MGGA has worked long and hard to develop a better relationship with this railroad, with strong lines of communications. If there are problems in the countryside, they are willing to sit at the table now and iron out differences."
He pointed to a mediation and arbitration agreement between MGGA, the Montana Farm Bureau Federation and BNSF that was signed in January. The agreement allows farmers with concerns about the fairness of rail rates to have those complaints heard without bringing a case to the Surface Transportation Board, which is very expensive to do.
"We've been assured this deal will not affect the day-to-day operations of the company, and we don't have enough information at this point to doubt that," said Jake Cummins, executive vice president of MFBF.
Montana Farmers Union President Alan Merrill doesn't think the deal will change much, but in his opinion, that's not a good thing.
"Montana's farmers have been in a captive shipper situation for years, with BNSF controlling more than 90 percent of the rail miles in Montana," Merrill said. "This purchase will not diminish that market dominance or its detrimental effect on Montana's farmers. In fact, the purchase could lead to more consolidation and concentration of the rail industry."
BNSF employs 2,000 workers in Montana, with an annual payroll of $118 million. About 100 BNSF workers are based in Great Falls, and another 100 work out of the Cut Bank, Shelby and Conrad area.
"Certainly, it's of great interest to Montana and exemplifies the value BNSF is in a nationwide transportation network," said Larry Bonderud, the mayor of Shelby and a BNSF stock owner.
"Warren Buffett is a miracle guy, most things he touches do a lot better," Bonderud said. "I think this is good. You've got stock increasing to a higher value, so the company should be able to do more improvement to infrastructure, add more jobs."
Hill County Commissioner Mike Anderson was surprised by the announcement, too. BNSF employs about 600 people in Hill County.
"I didn't know the railroad was for sale," he said. "The current management has always worked well with Hill County, and I'm optimistic that will continue."
BNSF stocks closed at $97 Tuesday, up from Monday's closing price of $76.07.
"A lot of my family worked on the railroad and bought a lot of stock in the company," Anderson said. "Hopefully, this will be a good thing for them and other stockholders."
Wednesday, November 04, 2009
