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 Post subject: The price of EMD E-Units
PostPosted: Tue Sep 20, 2022 7:39 pm 

Joined: Sat Jul 02, 2005 7:16 am
Posts: 1870
Had a question this week about the price range of EMC/EMD E-Units over the years of their production span. Here, just for history, is the approximate range of new unit pricing from the B&O EA/EB to the final new construction E9A and E9B units.

B&O EA $180,000................B&O EB $180,000

E9A $250,000..................... E9B $236,500

PC

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 Post subject: Re: The price of EMD E-Units
PostPosted: Tue Sep 20, 2022 10:48 pm 

Joined: Thu Oct 24, 2019 11:05 pm
Posts: 81
PCook wrote:
Had a question this week about the price range of EMC/EMD E-Units over the years of their production span. Here, just for history, is the approximate range of new unit pricing from the B&O EA/EB to the final new construction E9A and E9B units.

B&O EA $180,000................B&O EB $180,000

E9A $250,000..................... E9B $236,500

PC

Real question being - what is that in 2022 $$$$$$

With the understanding that todays 4400HP AC 6-axles are about $2.5M each


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 Post subject: Re: The price of EMD E-Units
PostPosted: Tue Sep 20, 2022 11:42 pm 

Joined: Sat Jul 02, 2005 7:16 am
Posts: 1870
Here is a handy pricing update for that E9A right off an internet calculator. The result is no surprise:

"$250,000 in 1954 is equivalent in purchasing power to about $2,752,518.59 today, an increase of $2,502,518.59 over 68 years. The dollar had an average inflation rate of 3.59% per year between 1954 and today, producing a cumulative price increase of 1,001.01%."

That 3.59% average for 68 years does not end up at around the 254% that many people might predict, because inflation is not a simple multiplication, inflation compounds like interest. Thus the astronomical 1000% increase.

PC

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 Post subject: Re: The price of EMD E-Units
PostPosted: Wed Sep 21, 2022 9:59 am 

Joined: Thu Oct 24, 2019 11:05 pm
Posts: 81
PCook wrote:
Here is a handy pricing update for that E9A right off an internet calculator. The result is no surprise:

"$250,000 in 1954 is equivalent in purchasing power to about $2,752,518.59 today, an increase of $2,502,518.59 over 68 years. The dollar had an average inflation rate of 3.59% per year between 1954 and today, producing a cumulative price increase of 1,001.01%."

That 3.59% average for 68 years does not end up at around the 254% that many people might predict, because inflation is not a simple multiplication, inflation compounds like interest. Thus the astronomical 1000% increase.

PC

My understanding is the the passenger locomotives currently being delivered to Amtrak is going for between $4M & $5M per unit.


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 Post subject: Re: The price of EMD E-Units
PostPosted: Wed Sep 21, 2022 11:20 am 

Joined: Fri Nov 16, 2007 10:21 pm
Posts: 157
I think the modern units are going for over $6M, but it's hard to say from the media reports. I guess on a lot of these purchases, the reported dollar figure also includes maintenance plans.

Eric


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 Post subject: Re: The price of EMD E-Units
PostPosted: Wed Sep 21, 2022 2:29 pm 

Joined: Sat Feb 06, 2010 9:29 am
Posts: 307
The last time I looked it up, the average value of the dollar is about 10 times less now than in the 50's....$1 back then is about $10 now....
So, $250K then is about ten times that now, about $2.5 Million....
If you look at a graph of inflation, starting in the early '70's when we dropped the gold standard, the rate of inflation takes off at about a 45 degree angle from the value of gold, prior to that they stayed pretty close together....


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 Post subject: Re: The price of EMD E-Units
PostPosted: Wed Sep 21, 2022 5:04 pm 

Joined: Sat Jul 02, 2005 7:16 am
Posts: 1870
I suspect that if a passenger agency were to request bids today on a "modern" E9A with AC traction, inverter HEP, and all the current features and accessories, the price would be very impressive.

PC

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 Post subject: Re: The price of EMD E-Units
PostPosted: Wed Sep 21, 2022 6:42 pm 

Joined: Sun Aug 22, 2004 11:54 pm
Posts: 2286
One caveat: you really can't compare E-units to any modern units.

1.) Modern units have a variety of improvements and alterations that are the result of technological improvements and regulatory mandates.

2.) The producer market went from an EMD virtual monopoly in 1950; to ad hoc industrial production today. By 1950 Baldwin had no orders for passenger diesels and ALCO's PA series would end up playing a small role, railfan affections aside. Production was part of the overall product line and there was cross use of freight components in passenger locomotives; as well as the use of freight locomotives in passenger service. Today's market is largely boutique and specialized built to spec, using customized components (i.e. the Cummins prime mover in Siemens Chargers)

3.) The purchaser in 1950 was likely to be a railroad; rather than a federal, state or municipal transportation agency. Purchases were being made with ICC rate restrictions in mind; not with access to taxpayer subsidies or emissions/transportation grants.

4.) Purchases were thought to be periodic in that roads would be replacing the last steam and then having periodic roster refreshes. Today, the production is episodic; irregular and uncertain by fewer buyers, as opposed to somewhat continuous and spread out among many railroads.

5.) As it was mentioned, the ideal today is to sell service agreements along with the unit; not unlike the way cars are sold with extended warranty agreements. (This used to be taught as the "Gillette theory"; entice the customer to buy a handle; knowing they'd have "vendor lock" on blades. Railroads had mechanical staffs who had virtually interchangeable skills; modern passenger operations don't have that army, they require higher roster reliability and availability, and the boutique production requires more specific product knowledge and training.

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 Post subject: Re: The price of EMD E-Units
PostPosted: Wed Sep 21, 2022 8:16 pm 

Joined: Sun Aug 22, 2004 8:53 pm
Posts: 188
A friend who worked for NYC and successors, starting in 1945, told me that diesels were priced at approximately $100 per horsepower during the First Generation era. If you look at loco pricing, regardless of builder, this rule holds remarkably well, into the late 1950s. It starts to diverge during the Second Generation, and has continued to do so.

PCook's original post also illustrates this nicely.


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