RailTex was a transportation

holding company A holding company is a company whose primary business is holding a controlling interest in the Security (finance), securities of other companies. A holding company usually does not produce goods or services itself. Its purpose is to own Share ...

that specialized in owning and operating short line

railroads Rail transport (also known as train transport) is a means of transport using wheeled vehicles running in tracks, which usually consist of two parallel steel rails. Rail transport is one of the two primary means of land transport, next to road ...

across

North America North America is a continent in the Northern Hemisphere, Northern and Western Hemisphere, Western hemispheres. North America is bordered to the north by the Arctic Ocean, to the east by the Atlantic Ocean, to the southeast by South Ameri ...

. Based in

San Antonio San Antonio ( ; Spanish for " Saint Anthony") is a city in the U.S. state of Texas and the most populous city in Greater San Antonio. San Antonio is the third-largest metropolitan area in Texas and the 24th-largest metropolitan area in the ...

Texas Texas ( , ; or ) is the most populous U.S. state, state in the South Central United States, South Central region of the United States. It borders Louisiana to the east, Arkansas to the northeast, Oklahoma to the north, New Mexico to the we ...

, the public company was a leader in making unprofitable lines shed by

Class I railroads Railroad classes are the system by which freight railroads are designated in the United States. Railroads are assigned to Class I, II or III according to annual revenue criteria originally set by the Surface Transportation Board in 1992. With a ...

into viable transportation routes. The company was taken over by

RailAmerica RailAmerica, Inc., based in Jacksonville, Florida, was a holding company of a number of short-line railroads and regional railroads in the United States and Canada. In 2007, RailAmerica was acquired by Fortress Investment Group. Before that, it t ...

in February 2000.

History

RailTex was founded in December 1977 by Bruce Flohr as a business that leased rail cars. Flohr had invested $50,000 of his own money and had investor help for another $50,000 from investors. Flohr had started as a

Southern Pacific The Southern Pacific (or Espee from the railroad initials) was an American Class I railroad network that existed from 1865 to 1996 and operated largely in the Western United States. The system was operated by various companies under the names ...

train-crew brakeman in 1965 and rose to superintendent of Southern Pacific's San Antonio Division until he became deputy administrator of the

Federal Railroad Administration The Federal Railroad Administration (FRA) is an agency in the United States Department of Transportation (DOT). The agency was created by the Department of Transportation Act of 1966. The purpose of the FRA is to promulgate and enforce railroa ...

in 1975. Seeking to broaden the revenue base, he purchased the

San Diego & Imperial Valley Railroad The San Diego and Imperial Valley Railroad (SD&IV) is a class III railroad operating freight rail service in the San Diego area, providing service to customers in the region and moving railcars between the end of BNSF Railway in downtown San Die ...

. Operating the railroad the company quickly developed a formula for a series of successful takeovers, including: *Taking over only railroads where he could operate on a non-union basis - RailTex trains operated with two employees paid $10 to $15 an hour while union trains operated with three to four paid an average of $25 an hour. RailTex employees were called transportation specialists or "transpecs," *Deploying three marketing managers rather than the usual one for the line and then marketing to businesses five to 10 miles from the track as opposed to the usual next-to-the-track customers *Purchasing older locomotives which could be acquired for a fraction of the cost of new locomotives. In 1986 it acquired its second short line,

Austin & Northwestern Railroad The Austin and Northwestern Railroad began construction on a rail line west of Austin, Texas, USA, toward Llano on April 20, 1881. The railroad was originally built as a narrow gauge line with plans to connect to the Texas and Pacific Railway a ...

.In 1989 it sold its rail car business to

Chrysler FCA US, LLC, Trade name, doing business as Stellantis North America and known historically as Chrysler ( ), is one of the "Big Three (automobile manufacturers), Big Three" automobile manufacturers in the United States, headquartered in Auburn H ...

. By 1991 it operated 1,500 miles of track in 12 states with 60 locomotives. RailTex went public in 1993 trading on

Nasdaq The Nasdaq Stock Market (; National Association of Securities Dealers Automated Quotations) is an American stock exchange based in New York City. It is the most active stock trading venue in the U.S. by volume, and ranked second on the list ...

under the sign RTEX. In 1996, RailTex was part of a consortium with

Companhia Vale do Rio Doce Vale (), formerly ''Companhia Vale do Rio Doce'' (Doce River Valley Company), is a Brazilian multinational corporation engaged in metals and mining and one of the largest logistics operators in Brazil. Vale is the largest producer of iron ore an ...

that was awarded a concession to operate the 4,400-mile Center Eastern Network in

Brazil Brazil, officially the Federative Republic of Brazil, is the largest country in South America. It is the world's List of countries and dependencies by area, fifth-largest country by area and the List of countries and dependencies by population ...

. Later the same year, in a consortium with

GP Investments GP Investments, Ltd (also GP Investimentos), is a leading alternative investment firm in Latin America with a strong presence in asset management, principally private equity funds. The firm's shares are listed on the Luxembourg Stock Exchange and ...

it won a further concession to operate the Southern Network. The Brazilian interests were sold in 1999. In February 2000, the company was taken over by

. It had 26 railroads over approximately 4,100 route miles in the southeastern, midwestern and

New England New England is a region consisting of six states in the Northeastern United States: Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont. It is bordered by the state of New York (state), New York to the west and by the ...

regions of the United States, as well as Eastern Canada and Mexico.RailAmerica to Acquire RailTex, Creating World'sLargest Short Line/Regional Freight RailroadOperator
''

Business Wire Business Wire is an American company that disseminates full-text press releases from thousands of companies and organizations worldwide to news media, financial markets, disclosure systems, investors, information web sites, databases, bloggers, ...

'' October 14, 1999

References

{{Reflist Canadian railroad holding companies Companies formerly listed on the Nasdaq Railway companies established in 1977 Railway companies disestablished in 2000 United States railroad holding companies 1977 establishments in Texas 2000 disestablishments in Texas