January 18, 2012

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Moving Forward

A Sentimental Journey with Modern-day Problems

Hilary Ingoldsby Whitesides

January 18, 2012

For almost 20 years, tourists and locals alike have traveled back in time with the Heber Valley Railroad. Despite the railroad’s historic charm, however, the problems it faces are in every way products of a present day crisis. The mission of the reincarnated railroad is the same today as it was in its inception in the early 1990s: to preserve history, provide entertainment and drive economic growth for the community and state. But, unfortunately, some of its struggles are the same as well. According to Executive Director Craig Lacey, when the railroad started up again in 1992 as a state agency, it was given $1 million in seed money to buy surplus engines and cars. With the high cost of train equipment, it was difficult from day one for the Heber Valley Railroad to get on top. Just as the railroad was starting to see a light at the end of the tunnel, it was presented with a new crisis—worn out equipment that needed to be replaced or repaired to pass stricter federal regulations. With new train cars costing up to $80,000 each and steam engines costing even more, Lacey and his team knew they needed a long-term financial solution. In 2005, the team decided to expand their shop facilities—including a huge electrical upgrade—to allow them to perform their own extensive train repairs, including an overhaul of their 103-year-old steam engines. Things were looking up as the railroad started to use the improved steam engines and pay off the debt it incurred in the shop expansion—and then the bottom fell out of the national economy, with tourism taking one of the hardest hits. Heber Valley Railroad found itself struggling financially once again. Whatever it Takes Lacey, a long-time train enthusiast and champion of the Heber Valley Railroad, decided to do whatever it took to keep the railroad up and running. And the other 15 full-time employees and 100+ seasonal/part-time employees and volunteers jumped right on board with him. Brainstorming creative ways to stay in business, Lacey realized that there was likely untapped potential in the expanded and improved shop space. Not only did the company have the space to fix trains, but if they could acquire the machinery—including machinery that can bend and cut steel—the shop team could completely refurbish and even manufacture train engines and cars. After all, if they couldn’t afford new engines and cars, perhaps they could repair old ones. “There is so little margin in this business that you have to barter, trade and bargain,” Lacey says. The newly energized railroad crew got right to work finding old parts and machinery from shipyards at a fraction of the price of new material. For example, the railroad recently bought an additional train car for the bargain price of $12,000. The crew repaired the car in-house, saving the railroad tens of thousands of dollars. “We found it was cheaper to do it in-house than to ship it to the East Coast,” Lacey says. And that’s not all. The railroad has been able to trade their services for needed parts and equipment, recently trading a diesel engine with the California State Railroad Museum for a plate sheerer that is used to cut metal for refurbishments—a purchase that would have cost $1 million new and only cost the Heber Valley Railroad $1,800 in transportation. Likewise, the railroad has traded surplus materials and transportation with a company in Chatanooga, Tennessee for more than $20,000 of machine work. Filling a Need The Heber Valley Railroad’s solution to its economic troubles has not only been creative, but has made it a rare commodity across the national railroad community. “Our shop is quickly becoming one of the best,” Lacey says. “We’re now doing specialized work for others because within this industry there is a real need.” According to Lacey, there are only a few shops nationwide that, like the Heber Valley Railroad, are capable of train remanufacturing and repairs, and most of them are on the East Coast. Not only is the scenery of the Heber Valley hard to beat, but the ability of the machinists and mechanics to make repairs look original is even harder to find elsewhere, according to Lacey. The workload at times is admittedly overwhelming, but Lacey says his crew is dedicated to the highest workmanship and their original-looking cars and engines are proof. Although the Heber Valley Railroad isn’t out of the woods yet (it had to cut its budget last year by 30 percent), it is certainly on the right track and hopeful for the future. With the impact the railroad has had on the community, Lacey hopes for additional funding from the state and dreams one day of having first-class climate controlled train cars. “We stretch our dimes as far as we can and we’ll do whatever it takes to get the job done,” Lacey says. “We love what we do.” Sidebar The Little Engine that Could The economic recession has many companies scrambling to stay afloat—let alone thrive and grow. Funding is scarce, consumers lack confidence—probably because many of them are still unemployed. But a little innovative thinking can make the difference between just scraping by and finding your wings. The Heber Valley Railroad turned a potential pitfall—the need to repair old equipment—into an effective cost-saving and income-generating enterprise. Your company could also hold a hidden, untapped source of new business. So it’s time to turn to the whiteboard, markers in hand, and do a little brainstorming: Can you tweak your product to fill a need in a different market? (For example, your retail bakery’s sales are down. Could you contract to bake fresh breads for the restaurant next door?) Think of at least three viable markets that you have not yet entered. Is your company uniquely positioned to offer a new service—even if it is tangential to your primary offering? (For example, your computer services company is chock full of technology gurus. Could you offer classes on Web security or other issues to families and seniors?) Think of three areas of expertise that your employees represent. Has your product or service become obsolete due to technology innovations? If so, how can you turn in a new direction while holding onto your core mission? (Nobody seems to rent movies anymore—at least not at storefronts. But many classic or art house movies aren’t available for download. Perhaps there is an opportunity there…) Plot the ways technology may influence your company in the near future—for better or for worse.
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