1986 - The Exon Library

Proponents of the amendment pointed out that the Morgan
Stanley bid was superior to the Norfolk Southern (NS) bid
for the following reasons: it offers $1.4 billion instead
of $1.2 billion; it avoids the very serious antitrust
problems posed by merging two giant railways into one
behemoth; the investor group will not use Conrail tax
deductions to shelter non-Conrail income (which amounts to
a $400 million tax boon to NS); several thousand jobs which
would be lost by a merger would not occur under a
stand-alone Conrail; and an NS/Conrail giant may well have
adverse effects on the service provided by small regional
lines.
Opponents of the amendment noted that Morgan Stanley had
come in with an offer after the bidding process was over.
As an investor group, it could very easily bleed Conrail of
its assets and then sell to anyone. A stand-alone Conrail
is not economically viable, they contended. It will not
survive, and the government will end up owning a railroad
again. NS acquisition of Conrail will ensure the long-term
financial viability of Conrail which is essential to a
balanced transportation network.