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Thursday, September 24, 2009

BNSF poised to grow in Galesburg, Ill.

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BNSF officials were cautiously optimistic about the future at a special forum on the railroad industry at Carl Sandburg College in Galesburg, Ill., The Register-Mail reported. Plans to build a diesel repair shop, a third main track in the BNSF's classification yard in Galesburg and storage tracks that allow freight trains that are being made up to be moved aside to allow other traffic through, could lead to the creation of more jobs once the economy rebounds, the officials said.

BNSF's Assistant Vice President Paul Nowicki and Eric Pitcher, BNSF's regional economic development manager, spoke at a railroad forum hosted by the Galesburg Regional Economic Development Association.

The company has furloughed 135 employees, the result of a reduction in rail traffic, although that number is down from 150, according to BNSF Terminal Superintendent Rick Danielson, who also spoke. "We are in a prime spot here to be able to grow," Danielson said. "We just need the economy to get back up and running."

The state has applied for $52 million in stimulus funding to build a third main track and storage track, two facilities that will improve efficiency and allow for more traffic to pass through Galesburg.

Dick Smith, director of planning and progress with the Illinois Department of Transportation, said that if the stimulus application was not successful, the state would find other sources to fund the project. "Either way you are going to see that happen," he said.

The plan to build a diesel repair shop here has been put on hold, but should resume if the economy returns to health, Danielson said. Nowicki said BNSF's business was down 16 percent this year compared to 2008, after a steep decline in October of last year as the economy tanked. However, the company has weathered the storm better than its competitors. Union Pacific's business is down an estimated 20 percent. Other rail companies have a greater exposure to the auto industry, Nowicki said. Coal and agriculture products make up the bulk of BNSF's business. Nowicki said there are tentative indications that the economy is beginning to recover.

Pitcher pointed to the transport of agricultural products as a business model that could create jobs in Galesburg. "Shipping bulk agricultural material from this area seems to be a big opportunity," he said.

BNSF carries agricultural produce to the Pacific Northwest for shipment to Asia from this region and Pitcher predicted continued growth in that market as a new middle class in countries like China increases consumption. "We think this is going to be a good story going forward for Galesburg," Pitcher said.

He also said growth in the number of wind farms in this area could be exploited locally by BNSF to create jobs. "That's one of the potential new business areas for Galesburg," Pitcher said. Wind turbine parts are often transported by rail and Pitcher said that if a 40- to 60-acre storage area could be developed next to a rail line a hub for the distribution of the parts could be established. Pitcher said he had been working with GREDA's Greg Mangieri and third parties to see if a "transloading area" could be developed here.

Moffitt said both the $52 million to reduce rail congestion here and the $33.5 million awarded to the city to build grade-separations in Galesburg were bright spots on the horizon for BNSF and the local economy.