Get your own Free Site"On November 19, 1991, C.A. Pinkerton III, president of the Straits Corporation, sole owner of the Detroit & Mackinac, announced that a letter of intent for the purchase of certain assets had been executed with principals of the Huron Acquisition Corporation of Pontiac, Michigan, owned by James George and Richard Van Buskirk, both vice-presidents of the D&M."
"Effective February 17, 1992, the 97-year-old D&M became the Lake State Railway Company under a five-year lease purchase arrangement with the Huron Acquisition Corporation, providing rail service along the original Huron Shore Route from Bay City north to Rogers City and from Bay City north to Gaylord and Cheboygan on former Michigan Central (later Penn-Central) tracks paralleling I-75."
"The D&M system had encompassed approximately 300 miles after acquiring former Penn-Central tracks and served such companies as Weyerhauser, Georgia Pacific, LaFarge, Abitibi Price, Dow Chemical, U.S. Gypsum, National Gypsum, and Michigan Gypsum."
"The railroad transports gypsum and shale-rock from regional quarries, along with wood products and liquid wastes burned at an Alpena cement plant, but shipment of cement, limestone, aggregate, concrete block making machines, diapers, and paper products have diminished or disappeared due to dramatic industrial changes in the region."
"The national recession of the late 1970's and early 1980's, coupled with unprecedented inflation, was particularly severe on the building trades in Michigan and rail shipment of such natural resource products as gypsum and cement never returned to previous volumes due to overall decline of business and construction in the state, as well as competition for the railroad from lake carrier shipping and deregulated trucking."
"In announcing the sale, Pinkerton said that the loss of industrial and manufacturing business and lack of its replacement in Northeast Michigan resulted in major financial problems for the D&M. In July 1990, application was made with the ICC for potential abandonment of the Huron Shore Route, since derailed by the line's sale."
Two major blows to the D&M came when Proctor & Gamble Co., their largest customer, closed its diaper plant at Cheboygan in 1990-91, and the loss of a contract to haul jet fuel for Wurtsmith Air Force Base in 1993 due to the end of the Cold War. Wurtsmith was considered as the location for a military rail garrison to transport MX missiles, using D&M tracks which would be updated by the federal government. Wurtsmith was not chosen for a rail garrison and the MX program was set aside after the fall of the Berlin Wall.
"Despite the dim economic climate in the early months of 1992, the railroad's new owners have been quoted in the press as saying they plan to continue rail service to the region. "We wouldn't be doing this if we didn't think there was a future in it," declared Van Buskirk in a Bay City Times interview."
"The new Lake State Railway Company continues to operate former D&M locomotives and freight cars as the result of the purchase and, through an agreement with Pinkerton, continues to operate form the Straits Corporation office building (built in the 1930's by the D&M) and other facilities in Tawas City."
"Van Buskirk was also quoted in the press as saying, "we intend to contract for functions that were once performed in-house and look for more freight contracts from our existing customers." The former statement meant a down-scaling of jobs by the new railroad, which had dropped to around 75 employees prior to the reorganization."
"Pinkerton continues to serve as president of the Straits Corporation, parent company of the Central Michigan Railway Company and such other businesses as a large cattle ranch in Iosco and Ogemaw Counties."
"The Central Michigan Railway, comprising 200 miles of trackage and other property purchased from The Grand Trunk Western, became effective Friday, September 4, 1987, and resulted in an entirely new corporate structure headed by Pinkerton."
The purchase of trackage, largest in the history of the Straits Corporation and one of the largest in the state, extends from Midland to Bay City, to Saginaw, to Durand, to Owosso. The CM uses the former GTW yard off Euclid Ave. in Bay City, where dispatching had been handled for both railroads. Purchase of trackage from class 1 GTW required transferring properties in 10 counties. CM serves the Saginaw Division of General Motors, Dow Chemical, and Consumers Energy.
"It transports about 75 cars weekly for Dow Chemical and, in late 1991, began carrying and additional 30 chemical carrying tank cars for that firm. Three weekly shipments, which originate in Freeport, Texas, had traveled to Midland on CSXT tracks, representing the remains of Dow's former 70-car unit train."
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