Southern Pacific Santa Fe HO Scale Models

The Southern Pacific Santa Fe, operating under the reporting mark SPSF, was the anticipated product of one of the most ambitious and ultimately unsuccessful railroad merger attempts in American history. On September 27, 1983, the Atchison, Topeka and Santa Fe Railway and the Southern Pacific Transportation Company jointly announced their intention to combine into a single western railroad giant. The motivation was rooted in competitive pressure: recent consolidations had transformed the Burlington Northern and Union Pacific into formidable rivals with combined revenues roughly equal to those of the two merging roads together. In December 1983, a new holding company called the Santa Fe Southern Pacific Corporation was created through a stock transaction valued at approximately five billion dollars, bringing both railroads under common corporate ownership while requiring them to continue operating independently and competitively under the supervision of a voting trust pending regulatory review. Formal application to the Interstate Commerce Commission was submitted on March 23, 1984, and the holding company proceeded with considerable confidence that approval would follow. As a visible expression of that confidence, the corporation authorized the repainting of locomotives in a new unified livery that blended elements from both predecessors. The scheme combined the Santa Fe's yellow nose treatment with Southern Pacific's scarlet red along the sides and a black roof, producing a striking combination that observers and railfans quickly nicknamed the Kodachrome scheme for its resemblance to the colors on Kodak's slide film packaging. Because the two railroads were legally obligated to remain separate during the review period, locomotives were lettered either SP or SF with space left to add the remaining letters once the merger was consummated. Approximately 306 Santa Fe locomotives, 96 Southern Pacific locomotives, and a small number of cabooses and slugs received this treatment before the process came to an abrupt halt. The ICC surprised the industry on July 24, 1986, when it rejected the merger by a vote of four to one. The commission determined that the two railroads operated extensive parallel routes across California and the Southwest, and that their combination would cause substantial harm to competition in the region. The ruling left the holding company scrambling to restructure, and its chairman, John J. Schmidt, resigned under board pressure in April 1987. After an unsuccessful appeal, the ICC formally ordered the divestiture of one or both railroads in June 1987. Southern Pacific was ultimately sold to Rio Grande Industries for approximately 1.02 billion dollars in October 1988, while the California real estate holdings accumulated by both companies were separated into a new entity called Catellus Development Corporation, which became the largest private landowner in the state. The holding company itself was renamed Santa Fe Pacific Corporation and retained control of the Santa Fe Railway along with various non-railroad business interests. The SPSF thus existed as an operational railroad identity only in partial form, never achieving the full integration its planners had envisioned. Its legacy endures chiefly in the Kodachrome locomotives that briefly roamed western main lines and in the cautionary lesson the episode provided about regulatory limits on competition in regional rail markets. Both of its component railroads eventually found their way into larger systems through subsequent mergers: the Santa Fe joined with Burlington Northern in 1995 to form the BNSF Railway, and Union Pacific absorbed Southern Pacific the following year, producing ironically much of the western consolidation that regulators had once moved to prevent.