Railroad sale concerns Sen. Cullen
Photo 
Tim Cullen
JANESVILLE A local state senator is asking state and federal authorities to review the recent purchase of Wisconsin & Southern Railroad, but a railroad official said the senator should not be concerned.
Sen. Tim Cullen, D-Janesville, said in a news release Thursday that the acquisition of Wisconsin & Southern Railroad by Kansas-based Watco Transportation Services is bad for Wisconsin.
Cullen sent letters to the federal Surface Transportation Board and to Gov. Scott Walker asking for a review of the sale.
Wisconsin & Southern operates on state-owned tracks that the state has spent millions of dollars to repair and maintain, Cullen said.
"This proposed sale should be reviewed before we risk taxpayer investment in new operators and new ownership," Cullen said in a news release.
Cullen is concerned that the sale could lead to higher shipping costs and reduced service for Wisconsin businesses.
Seneca Foods of Janesville raised those concerns, an aide to Cullen said.
"The state has not been privy to the financial details of this sale," the senator said. "Wisconsin taxpayers paid for the freight rail infrastructure, such as acquiring the Five Points terminal in Janesville. As a railroad that has been dependent on the use of a state asset, Wisconsin & Southern should welcome greater public scrutiny of this transaction. I'm calling upon the federal government to delay approval of this acquisition to give the Walker Administration more time to ensure taxpayer interests are protected."
Asked for comment, Walker press secretary Cullen Werwie responded in an email Thursday: "No comment."
Ken Lucht, manager of community development for Wisconsin & Southern, said Cullen's statements surprised him, especially because the purchase has already been completed.
Lucht said meetings are set in the weeks ahead with other legislators—none from the Rock/Walworth county area—about the sale and plans, and he'd be glad to meet with Cullen, too.
Lucht said Watco now owns a majority interest in Wisconsin & Southern, and that will mean an infusion of capital to improve track and other facilities in Wisconsin, enabling the company to serve more customers, improve service to Wisconsin shippers and increase safety.
The investment should boost the state's economy, Lucht said.
Shipping costs will not increase, Lucht said. Truck and rail shipping costs are close, so the railroad would stand to lose business if it raised rates, he said.
"Watco and WSOR share long-term growth plans to expand in Wisconsin," Lucht said.
Watco officials have been meeting with numerous local and state officials for two months, Lucht said, and would continue to do so.
Lucht said he believes he could allay any concerns in a meeting with Cullen.
Watco has assured officials that WSOR will remain a strong competitor in the state's transportation industry, that WSOR's president and structure will remain in place and that Watco will make investments in Wisconsin for years to come, Lucht said.
Local rail provider eyes expansion in 2012
Wisconsin & Southern Railroad plans major investments to upgrade tracks and build an intermodal shipping facility in Wisconsin in 2012, a spokesman said.
The railroad also is negotiating with 12 Wisconsin companies that are either expanding their use of the railroad or will relocate next to rail lines, said Ken Lucht, manager of community development for Wisconsin & Southern.
"A couple" of those companies are in "the Rock County area," Lucht said, but he was not at liberty to say which companies are involved or where they might be located.
Wisconsin & Southern also is expanding its workforce. It hired 25 new people last year and expects to hire another 12 in the coming month, Lucht said.
Intermodal shipping facilities involve both rail and trucking, with semitrailers being carried on rail cars and then driven to their final destinations.
Lucht said he did not know where the intermodal facility would be located.
The investment is coming from Kansas-based Watco Transportation Services, which owns rail lines in many states. Watco recently bought a controlling interest in Wisconsin & Southern, Lucht said.
"We're expecting, with Watco's help and support, to infuse more capital, build additional facilities (in Wisconsin)," Lucht said.
Wisconsin & Southern serves more than 200 businesses in 21 Wisconsin counties, Lucht said. Plans are in the works to add more customers that are building rail spurs and/or relocating to be near the tracks.
"Major capital funds" will be invested this year and in years to come, Lucht said.
With more customers shipping more goods, the railroad is likely to increase the frequency of service on some lines, including between Elkhorn and Bardwell Junction and between Janesville and Monroe, Lucht said.
Service also is expected to increase in frequency between Madison and Prairie du Chien and to Chicago.
Businesses now served three days a week could see trains five days a week, Lucht said.
The 12 new or expanding rail customers are expected to increase shipments by 5,000 carloads a year, Lucht said.
Those new or expanding business plans represent $50 million in annual sales and more than 300 new jobs in the next 18 months with $13 million in annual wages, he said.
Wisconsin & Southern will need to invest in equipment and maintenance and improve its service plans, Lucht said.
Watco, based in Pittsburg, Kan., operates more than 3,700 miles of track in 26 states, according to its website.
Wisconsin & Southern operates on 600 miles of track throughout south-central Wisconsin and northeastern Illinois. Watco's acquisition will help Wisconsin & Southern reach new markets and establish cost-effective routings, according to a statement released when the sale was announced in November.


Jan 12, 2012 at 4:48 p.m.
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MOosho,
The Surface transportation board already signed off on this deal. The STP board is appointed by the POTUS and have 5 year terms.
The STB approved it.
The owners of WSOR and Watco Benefit-as do consumers and transporters of classII freight.
Intermodal shipping has trippled in the last 25 years-which is one reason why Watco is now the largest Class II freight operator int eh united states. Watco is a privately owned company and they've participated in about 20 plus acqusitions and probably enriched themselves in the process. Nothing wrong with that-sounds like the American dream.
Your point of WSOR requiring prior approval to change ownership might be true-however, the approval will not come from people like Illinois Tim Cullen-it will come from STB board members-appointed by President Obama and Bush. Case closed.
Cullen is trying to make political hay in an attempt to appear that he is going to save/create jobs. I beleive his session ended in November-where was Cullen prior to the sale? If his concern were valid-he would have looked into this transaction long before it closed. He's simply not concerned about the sale or the employees.
Jan 12, 2012 at 12:35 p.m.
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Yes a train with a mouse on board.
Jan 12, 2012 at 7:59 a.m.
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I've found the reason Cullen is ticked about this. The Wisconsin & Southern tracks don't go to Rockford, Ill.
Jan 12, 2012 at 1:31 a.m.
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WisconsinResident, you may be willing to cross your fingers and guess at their intentions, but they have actual responsibility due to the citizens of this state. Maybe Watco is benevolent and means well, but it's also possible that they don't, or that they can't follow through with their good intentions, or that it's a smokescreen. Lord knows that the Walker administration isn't to be trusted with the keys to the chicken coop here. There has been no real transparency with this sale, just a smarmy grin and a "trust us" brush-off. Given the fact -- fact -- that the president of the company pleaded guilty to violating campaign finance laws in order to give Walker as much support as he could funnel through his employees, you have to have just a tiny question in your mind what he expected to get from that support.
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A state that operates under the rule of law, with open proceedings and transparency of transactions, should welcome scrutiny. Instead we're hearing a lot of "oh, gosh, look the other way, why don't you?" Nothing garners my interest like telling me there's nothing to see here, move along, move along.
Jan 12, 2012 at 12:34 a.m.
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Where was Cullen, when Doyle wanted to buy a 47 million dollar train.
Jan 11, 2012 at 11:21 p.m.
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Sounds to me from the research I have done that the rail road is not planning any layoffs and that they want to grow and keep everybody in place like I stated in an earlier post. Now I was not able to too find out the terms and conditions but my opinion is this I am thinking they may expand services here in Wisconsin and possibly upgrade tracks in Wisconsin and make rail service in Wisconsin run more efficiently and that means you have to upgrade the tracks or replace old tracks with new ones and to do that they may need to hire more people. The only thing here is it is being turned into a political debate and that is not what this is about. However I could form a better opinion if I could see the conditions and terms of the sale so I can decide if we got a good deal or not. But early results from my research looks to me like this is a company investing in Wisconsin and has nothing to do with Walker and it is just about a candidate making a name for himself to look good if there is a recall election so Senator Cullen why don’t you find out the terms and conditions of the and do some research before you rush to a wrong conclusion.
Jan 11, 2012 at 6:41 p.m.
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bowgirl-Don't try to figure out mousey. He was so use to the Soros money pit that when the Koch brothers starting matching Soros the left started their favorite tactics of degrading and name calling. Mouse never even heard of the Koch brothers, who he rants is running everything in the state, until Walker was elected. Cry baby cry.
Jan 11, 2012 at 5 p.m.
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I didn't know Cullen relocated to Wisconsin.
Jan 11, 2012 at 4:18 p.m.
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mouse, why do you have such a fetish with Koch?
I would like to see you get on some web sites that show your party's questionable practices.
We all know it works both ways. Your closed minded debates are weak and mundane.
Jan 11, 2012 at 2:12 p.m.
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Before everyone jumps to conclusions here are some known facts straight from the WSOR website that I did research. Watco Transportation Services LLC, based in Pittsburg, Kan., will acquire controlling ownership of Wisconsin & Southern. Financial terms of the purchase were not disclosed.
Watco is a privately held rail transportation services company operating more than 3,700 miles of track in 26 states. Watco is America's largest privately held short line railroad company and employs 2,200 people.
Wisconsin & Southern employs about 250 people. No layoffs are planned as a result of the agreement. "From an employment standpoint, we want to continue to grow (Wisconsin & Southern) and keep everybody in place," said Stefan Loeb, vice president of business development at Watco. Wisconsin & Southern will retain its corporate structure and its name. Its headquarters will remain in Milwaukee, where dispatching, customer service and other administrative functions will continue. Wisconsin & Southern operates via an agreement with the State of Wisconsin in which the state owns the rails and the company agrees to maintain and operate trains on them. The publicly owned tracks, abandoned in the late 1970s, used to be part of the Milwaukee Road and Chicago & North Western railroads. Watco Transportation Services filed a change of control notice with the U.S. Surface Transportation Board on Tuesday that is expected to become effective by the end of December. The projected date of the transaction is Jan. 1. Watco operates 14 rail car repair shops, four locomotive shops and 19 mobile mechanical shops. The transload and intermodal services division manages 16 transload facilities, seven warehouses and one intermodal location.
Jan 11, 2012 at 12:43 p.m.
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Nicely done rremployee!
Here is a great example for all you voters to see for yourself. What kind of government do we want? Do we want excessive government intervention (after the deal was reviewed) or do we want to encourage business to do well and grow by minimal (one efficient review) oversight? He that has ears, let him hear.
Jan 11, 2012 at 12:08 p.m.
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Senator Cullen can use his considerable talents at cost cutting that he honed as a greedy health insurance executive where costs are skyrocketing at the expense of taxpayers. Gotta love it!
Jan 11, 2012 at 11:18 a.m.
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When it comes to anything dealing with government, local, state, or federal - we will never get ALL the facts and I don't think our elected officials get (or give) ALL the facts either.
Jan 11, 2012 at 10:13 a.m.
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bebe53 old and FYI by them doing so we were all made aware of the criminals who are running this state and their bullying behaviors against the 99%...I would be concerned as to who is behind Watco the ones who purchased it and who they really are.
Jan 11, 2012 at 9:41 a.m.
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Cullen is just grandstanding, he has to come up with something to keep his name in the paper. He is a bigger phony that Gore.
Jan 11, 2012 at 9:19 a.m.
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I guess the question is do we have all the facts?
Jan 11, 2012 at 8:49 a.m.
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Isn't that Cullen's job as Senator to answer anything that deals with the public that may/may not be legal or ethical. Before using inflammatory rhetoric, wouldn't it be better to get ALL OF THE FACTS?
Jan 11, 2012 at 8:33 a.m.
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If it is a positive for Janesville then it must be wrong. You want jobs but a majority of people here are more interested in making comments that seem the exact opposite. Why? You always are looking for the negative or trying to make it negative and then you turn around and complain that no one is doing anything to bring jobs to our fair city. WHY??
Jan 11, 2012 at 8:12 a.m.
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"You silly people will never understand that going to Illinois made Cullen a hero." You've got to be kidding. Look up the word "hero", please. There was nothing brave or noble about running away from his responsibilities and hiding in Illinois. That behavior is called "grandstanding", not "heroism".
Jan 11, 2012 at 7:44 a.m.
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Under what law can Cullen demand this information?
Moosho-you can bet your life that the CEO of WSOR made money on this deal.
This is nothing more than last ditch attempt for Cullen to remain relevant if Walker is recalled.
Jan 11, 2012 at 6:50 a.m.
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The railroad deal may have to be looked at but it is Cullen that concerns me most. He needs to be watched very carefully. His actions don't match his words. He likes to saunter around and be known as the great "compromiser" but his actions speak a different story, such as running to Illinois.
Jan 11, 2012 at 6:37 a.m.
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Rremployee....+1 It makes no sense that a company shows up, makes a huge capital investment in our state, and while they are in the process of doing this are vilified by certain grandstanding politicians. The same people whining to Walker about job growth, are those that are condemning business deals that bring the very jobs that they are whining about not having into the state.......sad and pathetic.......
Jan 10, 2012 at 8:55 p.m.
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W&S employees 200+ people, many of whom live in Janesville, or the surrounding area. With the purchase by WATCO, money is already beng spent to service customers in the area. Off Cty.O, work is in process to build a facility to offer customers service by rail that do not have direct access to rail. Money being spent for this job is going to local contractors, who employ people who then spend their earnings in the area. The same is true for all those W&S employees. Yes, the state owns much of ,but not all the track that W&S services. The political rambling is just that by Sen. Cullen! The sale is complete. Furthermore, would it be fair to ask to see the books of all the trucking companies that run their businesses on the very roads we tax payers subsidize,I think not. Maybe it's time for all politicians to come together, and start serving our best interests, and quit the game playing.
Jan 10, 2012 at 8:54 p.m.
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Bebe, this is just too funny to pass up: "@nomores-the insult is because you made an assumption -I presume based on your own prejudice(s)"- you presuming I'm assuming - that's funny.
Jan 10, 2012 at 8:50 p.m.
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Sorry, Bebe, but it seems you can't handle the truth. There were no assumptions on my part - I simply gave you my impressions. If you can't understand that then I guess you're not too bright. Perhaps remedial logic/reasoning would be more appropriate for you.
Jan 10, 2012 at 8:29 p.m.
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Bebe, before you start hurling insults perhaps you should consider what you write: "@nomores-obviously you either can't read or your comprehension is sorely lacking" - I didn't say you espoused your support for Walker, I said it sounds like you think Walker is right. It must be embarrassing to toss out those insults and then find that you are the one who fits your own criticism. Thanks for the entertainment.
Jan 10, 2012 at 8:16 p.m.
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Talk about a day late and a dollar short!! Where has old Timmy been? This transaction has been in process for months and has hardly been kept quiet. I get a kick out of the clueless wonders--not naming any names(Mooshoe:)) that are demanding to know who signed off on this........southern didn't sell the tracks, they sold the business. Using your logic, any trucking company or any other business for that matter, that used highways--which are subsidized by the state--would have to get approval from the state before selling??
Jan 10, 2012 at 8:08 p.m.
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Beneath this article in the paper was another article about jobs and investment coming up with the railroad. Jobs in Wisconsin? No wonder Cullen is upset. Why can't they be in Illinois to make him happy.
Jan 10, 2012 at 8:03 p.m.
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I don't know about anyone else, but if something happens with something that I have my money in, I'd like to know.
Jan 10, 2012 at 7:39 p.m.
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Yes, ozzman, as were the record amounts of refined oil products that we exported last year.
Jan 10, 2012 at 7:21 p.m.
Jan 10, 2012 at 6:26 p.m.
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@Bebe, it sounds like you are supporting Walker's sale and doubting that Cullen's position has any merit. I don't know who's right, but it sounds like you have already decided Walker is. Unless you have more information I think you're still espousing a partisan viewpoint. The question seems reasonable to me.
Jan 10, 2012 at 6:19 p.m.
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"Wisconsin & Southern operates on state-owned tracks that the state has spent millions of dollars to repair and maintain, Cullen said."
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Just one more case of corporate entitlement programs funded by taxpayers. Add it to the list of the $700 billion per year we give away to military contractors in defense entitlement programs to profitable corporations. We've built ports on both coasts for highly profitable shipping companies, we subsidize almost every business in one way or another. And the right screams socialism when someone suggests a national health care system to protect those without healthcare?
Jan 10, 2012 at 5:41 p.m.
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Anyone asking the kind of questions Scott Walker was paid not to ask could face some serious consequences from the Koch brigade. Thank you for your courage Gove ... I mean Senator Cullen.
Jan 10, 2012 at 5:28 p.m.
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You silly people will never understand that going to Illinois made Cullen a hero. Well, you can have fun chewing it over after Scottie loses.
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The WSOR has achieved its success and business value on the foundation of a considerable taxpayer investment and continued subsidy. As such, its sale is of interest to the state and scrutiny is warranted. The concern is that this out-of-state company could make business decisions that eliminate or reduce service to Wisconsin businesses, for which we, the taxpayers, paid for track construction and repair.
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Of course, it's quite hilariously ironic that a Koch-connected company depends so heavily on corporate welfare. You know darned well that's exactly where they think your tax dollars should go: to support THEM. One day you'll realize how completely you've been rolled by these charlatans.
Jan 10, 2012 at 5:01 p.m.
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I think he is just wanting to get his name in the paper so he can appear concerned if he decides to run against Walker, if the recall wins.
Kinda late now to be worried about this.
Jan 10, 2012 at 4:52 p.m.
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Mr. Cullen does not seem to understand that market forces dictate prices.
He feels the need for government intervention. I'm sure its for the 'common good'.
Jan 10, 2012 at 4:49 p.m.
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I agree with Bebe. Timmie will do anything to get his picture in the paper.
Jan 10, 2012 at 4:47 p.m.
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Bebe, the sale was announced in Nov. So, if Cullen is correct, you would prefer to bring up an unrelated jab at Cullen & give Walker a pass? Wouldn't it be better to have good government rather than this partisan garbage?
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