By TOM MARTIN
National news hit home Tuesday with the announcement that Galesburg’s largest employer was purchased by billionaire investor Warren Buffett.
Buffett, 79, had owned 22 percent of Burlington Northern Santa Fe Corp. until a deal was announced Tuesday for his investment firm of Berkshire Hathaway to buy the nation’s second largest railroad company that has its second largest classfication yard here in Galesburg.
Our city’s history and future are tied to the railroad industry. BNSF’s performance has a direct impact here.
So, the question is, what does Buffett’s investment mean for Galesburg.
Apprehension generally accompanies such news. The city’s previous largest employer, Maytag, left town in 2004, taking 1,600 jobs with it. While that was more a result of a new philosophy rather than new ownership, it nevertheless proved the precariousness of large employers and how a single decision can impact a town. Maytag’s departure left BNSF as the county’s largest employer, now with 1,115 workers. And with this new BNSF ownership there’s bound to be a shake-up, which often affects personnel. But BNSF recently downsized, furloughing 135 jobs locally, so we can hope the company is lean enough already.
On the other hand, there is reason for hope.
Buffett, who Forbes magazine calls the world’s second richest man, is famous for making good investments. This being his largest deal to date clearly shows he believes the railroad industry is primed to prosper. Galesburg has lined up its ducks with that in mind.
The city has commitments or promises from state and federal governments of an $88.5 million investment in the BNSF’s Galesburg operations. Included are overpasses on West Main Street and North Seminary Street, as well as an underpass on East Main Street. That work is partially intended to position the railyard here for expansion once the economy rebounds. A third main line in the railyard and storage tracks also are part of the new BNSF components planned for Galesburg.
Buffett says he’s betting on a strong economic recovery. “I basically believe this country will prosper and you’ll have more people moving more goods 10 and 20 and 30 years from now, and the rails should benefit,” he told CNBC Tuesday.
One could also argue it’s a bet that coal, of which BNSF is the nation’s largest hauler, will remain as a part of our energy future. Or, maybe at least the energy future of China, where much of our coal is exported. It’s also a bet that petroleum prices will remain relatively high, making rail more attractive than highways.
Buffett’s faith in the railroad industry resonates here. And his previous business success should bode well for BNSF and gives us reason to hope for BNSF growth that will benefit Galesburg. — Tom Martin, editor
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