Contract Switching at Magna and Garfield
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This page was last updated on February 24, 2016.
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RailWorks was incorporated in Delaware in March 1998 as a holding company to acquire companies that provide rail system services, including construction and rehabilitation, repair and maintenance, and related products. Kennedy Railroad Builders was one of RailWorks' 14 founding companies, and was established by John Kennedy in 1965. In 2001, Kennedy was named CEO of RailWorks.
Although it was formed in March 1998, no operations were conducted and no revenue was generated until August 1998, when RailWorks Corporation acquired, in separate concurrent transactions, 14 groups of companies engaged principally in the rail system services and products business, and consummated their initial public offering. These 14 companies were referred to as the Founding Companies. Since August 1998 through December 31, 2001, RailWorks acquired an additional 21 companies or groups of companies. At December 31, 2000, RailWorks streamlined their corporate structure by reducing the number of individual operating companies through various mergers and dissolutions.
Expenditures by rail system operators for new construction, rehabilitation, repair and maintenance were approximately $12 billion in 1997. The use of outsourced service providers had increased significantly as rail system operators sought to reduce costs by focusing on their core competencies. Shortline railroads and industrial companies generally outsource because they lack the know-how, specialized equipment and resources to cost-effectively install signal systems or build and maintain their own tracks. Finally, the rail system services and products industry was highly fragmented, presenting a consolidation opportunity to provide a competitive advantage over smaller competitors. (SEC Form S-1, RailWorks Registration, dated May 22, 1998, which includes a list of the 14 founding companies)
RailWorks Corporation was formed to capitalize on the growing need for rail construction, maintenance, and materials products and services. This growth was brought about by railroad mergers and increased federal funding for rail-transit infrastructure improvements, and manufacturers' needs for modern rail infrastructure in their facilities. In the years that followed, RailWorks grew by acquiring businesses serving a wide variety of rail and rail-transit needs, making the company capable of offering a broad array of rail-related products and services.
July 27, 1998
RailWorks Corporation, of Whiteplains, New York, was founded in 1998, with an initial public offering on July 27, 1998 for 6.8 million shares. (New York Times, July 27, 1998)
March 29, 1999
RailWorks filed its first annual report with the SEC, listing companies acquired up to that time. (Read the RailWorks 1999 Annual Report)
October 6, 1999
RailWorks Corporation agreed to buy four companies for an undisclosed price to expand outside of the New York area. (New York Times, October 6, 1999)
January 5, 2000
RailWorks Corporation purchased Dura-Wood Treating Company, Alexandria, Louisiana, a closely held maker of railroad ties. (New York Times, January 5, 2000)
February 29, 2000
RailWorks filed its second annual report with the SEC, listing companies acquired up to that time. (Read the RailWorks 2000 Annual Report)
During the year 2000, the Company's management and Board of Directors conducted and completed a strategic review of RailWorks' operations. The resulting restructuring plan involved systems integration, rationalization of real estate, equipment and inventory and maximization of human resource productivity around three lines of business. The restructuring resulted in reduction of personnel, facilities, and overall cost reduction.
In June 2000, RailWorks purchased Western Tar Products Corporation, Winslow, Indiana, renaming the company to RailWorks Wood Products, Inc., an operating unit of RailWorks Corporation. The new company manufactured and marketed cross ties, switch ties, crossing materials, and treated wood products to railroad contractors, industrial yards, and general construction industries.
September 20, 2001
RailWorks and its 22 affiliate companies filed for Chapter 11 bankruptcy.
RailWorks was operating with three separate segments: (1) transit services, (2) rail track services and (3) rail products and services. The transit services segment provided transit construction and rehabilitation services, as well as installation of signaling, communications and electrical systems. The rail track services segment provided design, engineering, construction, rehabilitation and repair and maintenance of track systems. The rail products and services segment provided a broad range of rail related products, including treated wood ties. At the time, contracts for New York Transit Authority provided 17 per cent of revenue.
In 2002, RailWorks integrated its subsidiaries into two divisions -- Transit Systems and Track Products & Services.
There were four major subsidiaries:
- RailWorks Wood Products, a leading producer of treated wood products used by the railroad industry and a manufacturer of creosote and coal tar products.
- RailWorks Rail Products & Services, and RailWorks Rail Services of Canada, which provided rail grinding services for Class I, short line and transit rail lines in the United States and Canada. It also provided switching, locomotive and car maintenance services. (The contract with Kennecott was with this third, rail services segment.)
- RailWorks Wood Waste Energy, a leading nationwide supplier of environmentally friendly crosstie pickup/disposal services and industrial tie-derived boiler fuel.
September 6, 2002
RailWorks became a privately held company and was no longer subject to the regulations of the SEC.
November 13, 2002
RailWorks was reorganized as a privately held company with new, experienced leadership and strong financial backing.
March 3, 2003
Kenneth J. Bauer ended his three-year stint as chief of Long Island Railroad, the nation's largest commuter line, on March 3, 2003 to become chief financial officer at RailWorks Corporation, a private transportation-services company in White Plains. (New York Times, February 23, 2003)
May 11, 2007
U.S. private equity investment firm Wind Point Partners acquired New York-based RailWorks Corporation in partnership with RailWorks president and CEO Jeffrey M Levy and other members of the management team. RailWorks served a broad range of customers including Class I, II and short line railroads, transit authorities, commuter railroads, municipalities, and industrial, manufacturing and power plant facilities. RailWorks has approximately 1,300 employees located at more than 30 offices throughout the U.S. and Canada. Its largest customer was New York City Transit Authority, which was planning several new projects.