1A New DME president named

By Jeffrey Pieters

Post-Bulletin, Rochester MN

A new face is overseeing the Dakota, Minnesota & Eastern Railroad.

Track upgrades are coming down the line, too.

The railroad, now a division of Canadian Pacific Railway, announced both items of news at its annual Investor Day conference on Thursday in Toronto.


Vernon W. Graham, who oversaw DM&E’s transition into CP, was named Kevin Schieffer’s successor as DM&E president.

Graham, 57, is formerly CP’s vice president of engineering. He joined the railroad in 1991.

Also announced Thursday was CP’s decision to cut $200 million, or about 20 percent, from its capital improvements budget next year. The decision was driven by economic concerns.

However, the company’s $300 million commitment to upgrade the existing DM&E line remains firm, said spokesman Mike LoVecchio. The investment is a condition of the regulatory approval for the acquisition, he said.

Rochester leaders feel they have a sympathetic ear in Graham.

"He’s somebody that we’ve been communicating with," said Chris Gade, spokesman for the Rochester Coalition, a group composed of Mayo Clinic, the city and county governments, and the Rochester Area Chamber of Commerce to address — and usually fight — the railroad issue.

"Unlike the previous leader of DM&E, Vern really provides us an opportunity to really interact and engage with a person who has really listened to our safety concerns in detail," Gade said. "Our hope will be as he transitions into leadership that he will continue to be a person that we can talk with."

Graham will report in the CP organization to Kathryn McQuade, the company’s executive vice president and chief financial officer.


From CP’s perspective, Graham is an important selection to head DM&E because of his role helping Canadian Pacific win distinction as the country’s safest large railroad eight of the last 10 years.

"I think he’s an excellent selection for the position," LoVecchio said.

Leading the transition gave Graham the opportunity to become familiar with the condition of DM&E’s line and the cities and people along it.

"This was a natural transition for Vern," LoVecchio said.

Observers’ consensus is that much of the DM&E line is in poor shape. Part of the rationale for DM&E’s proposed $6 billion upgrade and extension into Wyoming’s Powder River Basin region was that it would replace sections of century-old track with modern, heavier-gauge welded rail that would solidify the company’s future viability.

Full replacement cost was once estimated by DM&E to be more than $800 million.

CP’s capital budget next year includes $100 million for DM&E. The full $300 million is scheduled to be spent within five years, LoVecchio said.

There is no determination yet which sections of the line will be replaced first.


Eventually, "that money will be spent network-wide, including Rochester," LoVecchio said.

Track condition ratings, traffic operations and other factors will determine which sections of line are upgraded first.

"The priority for us is the safety of the network," LoVecchio said.

There’s no decision yet whether CP will proceed with the Powder River Basin extension.

LoVecchio said he did not know the basis of some recent media reports that a decision on the extension is five to 10 years away.

"There is no timetable," he said.

What To Read Next
Get Local