Optimism for railcars

THE ISSUE

Billionaire Warren Buffet has boosted optimism to the Shoals with his $34 billion investment in Burlington Northern Santa Fe Railroad.

"Be fearful when others are greedy, and be greedy when others are fearful."

That's the axiom that billionaire Warren Buffet follows when making investment decisions. Although he has made mistakes along the way, it would be hard to question Buffett's overall strategy. He is, after all, the second richest man in the world.

So when Buffett spent $34 billion to buy Burlington Northern Santa Fe Corp., he grabbed international attention. He must know something about the future of railroad transportation.

The purchase also caught the attention of David Bronner, chief executive officer of Retirement Systems of Alabama. Bronner led RSA to invest heavily in the National Alabama railcar plant at Barton. That

$625 million bet on the Shoals has looked questionable since the recession derailed the railcar business just as the plant was coming online.

But Bronner remains optimistic, especially after learning of Buffet's deal.

"If one of the most successful and respected investors in the world believes that rail transportation is essential to recovery, Little Ol' David feels a lot better," Bronner told the TimesDaily's Montgomery reporter. "It means if the country's future depends on rail transport, we're going to be building railcars."

Buffett told the Associated Press he realized a few years late that railroads had become an appealing investment. Although railroad profits are down because of the recession, Buffett expects them to rise as diesel prices rebound and companies start shipping by rail instead of truck.

Others speculate a significant increase in the amount of coal and other raw materials shipped from the United States to China. Railroad is the method of choice when it comes to transporting coal to the West Coast, where it is loaded onto ships bound for China.

It appears both Buffett and Bronner have been following the same axiom. Hopefully the strategy of both men will pay off with future jobs in the Shoals.