These are notes that I am writing to help me learn our industrial history. They are my best understanding, but that does not mean they are a correct understanding.
Sunday, March 19, 2017
Was Duval Junction: UP/C&NW vs. CN/SOO/WC
"Duval" was a spelling error. This is now another stub because the contents has been moved to Deval Tower.
The reasons for the demise of Mesta were multiple and complex. It was a great company to work for. I was there for 26 years and I left in 1981 as I could see with certainty that the end was near. Included in the reasons, not mentioned above, were government policies that forced interest rates to a level that consumed profits on work in progress. In other words, while the Company would "progress" bill customers for work in progress, it was still necessary to borrow more funds to complete work in progress. Interest rates, about 18%, were more than potential profit margins. Additionally, tax policies, mainly depreciation, were such that large long term investments were unattractive. As I recall, it took about 17 years to depreciate such capital investments in the US while other countries offered as little as 3-5 years. Thus, domestic investment dried up.
The reasons for the demise of Mesta were multiple and complex. It was a great company to work for. I was there for 26 years and I left in 1981 as I could see with certainty that the end was near. Included in the reasons, not mentioned above, were government policies that forced interest rates to a level that consumed profits on work in progress. In other words, while the Company would "progress" bill customers for work in progress, it was still necessary to borrow more funds to complete work in progress. Interest rates, about 18%, were more than potential profit margins. Additionally, tax policies, mainly depreciation, were such that large long term investments were unattractive. As I recall, it took about 17 years to depreciate such capital investments in the US while other countries offered as little as 3-5 years. Thus, domestic investment dried up.
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