29 December 2008
Schieffer Catches Breath After Leaving Rail Venture
The irony is not lost on Kevin Schieffer, says a story in the
Sioux Falls, South Dakota, Argus Leader. Two years ago when the Federal Railroad Administration denied the Dakota Minnesota &
Eastern Railroad a US$2.3-billion construction loan, it set in motion events that resulted in the DM&E being sold to
the Canadian Pacific Railway for about US$1.5 billion, with possibly another US$1 billion in contingency payments. Had Schieffer come
to the federal government now with a massive building project, a new president promising huge spending to revive the economy might
well have thrown money at him.
"Everything had lined up. We needed the financing to get it done, but somehow that last brick didn't fall into place,"
Schieffer said. Timing was everything.
After the deal, Schieffer walked away from railroading a wealthy man. But his dream to extend the DM&E into Wyoming's Powder River
Basin coalfields - the largest railroad expansion since the 19th century - faded away.
Canadian Pacific now seems content to weave the existing DM&E into its operations.
"It's a natural fit. You're talking about two companies whose service lines complement each other very much," CP spokesman
Mike LoVecchio said.
Schieffer abruptly left the DM&E in October after it became clear that the expansion project was not a CP priority, he says. The
CP people who helped craft the merger with the DM&E with an eye toward finishing the project "had all been fired or
re-assigned," Schieffer said.
Although he left with an undisclosed fortune resulting from the merger, Schieffer "would be very happy to be a lot less liquid
and building" the PRB project, he said. Instead, Schieffer, 50, finds himself contemplating another of the major life changes
that led him from a planned career running a gas station to the staff of Sen. Larry Pressler to becoming U.S. attorney for South
Dakota to the DM&E.
So what's next for him? Unless an unexpected opportunity jumps out at him, he plans to take at least a year to decide.
Schieffer's tenure was notable in part for the antagonistic relationship that developed between the DM&E and foes of the Powder
River project.
"I always thought of him as being a politician in the railroad business rather than as a railroader," Larry Kaufman, a
transportation writer and railroad consultant, said of Schieffer. "I did not think his building project worked."
Dennis Hanson, president of the Rochester, Minn., City Council, looked back on the years battling Schieffer and the DM&E, saying,
"We both started off on the wrong foot. It was very antagonistic from day one."
But he called Schieffer "a very sharp individual. If you could look back, and we could have gotten off on the right foot, you've
got to wonder sometime where things would have led."
Luther Miller of Railway Age magazine predicts that passenger rail will grow under the Obama administration and that new track will be
laid to improve its infrastructure.
"Someone like Schieffer, with a solid background in Washington and in railroads' needs, could be working in that area as a
consultant," he said.
Schieffer is not sure he wants to get back into railroads.
Sen. John Thune has known Schieffer since they both worked on congressional staffs in the mid-1980s. Thune said Schieffer
"is a person who wants to be in the mix. He wants to make things happen. I don't think Kevin and railroads have seen their last
days."
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