Saving a Railroad – Changing His Trajectory – Part 3 of a Conversation with Dr. Kornhauser

It started with a phone call at the end of the 1975 Spring semester. Representative James J. Florio’s office was looking for expert help to evaluate a reorganization plan for the bankrupt railroads in the Northeast Corridor. In many ways, the eyes of the entire country were on this potential legislation and it involved the largest bankruptcy (PDF), Penn Central, in U.S. history.

Like a true entrepreneur, Professor Kornhauser said yes to the opportunity. Despite a struggle to understand the acronyms of an industry that was new to him, Kornhauser proved to be a quick study. Alain states that “This may be the best work I have ever done.”

Using state-of-the-art, IBM 370 mainframes with Tektronix 4010 graphic terminals, Kornhauser and his team of academics and students coded the first digital representation of the northeast railroads. This proved important in being able to quickly model different scenarios and create proforma financials. He likened the work to the same sort of computer analytics that he had done previously for trips to outer space and on personal rapid transit.

Still, the application of this technology and the creation of digital maps for transportation were pioneering. Their efforts led to Princeton’s Interactive Computer Graphics Lab. The multidisciplinary engineering and finance approach to optimizing solutions lives on through the work Kornhauser does as Professor of Operations Research and Financial Engineering Director of the Program in Transportation at Princeton’s Operations Research and Financial Engineering.

By September 1975, Kornhauser and his crew were in front of Congress presenting their analysis of how to keep the railroads. Later that year, Congress passed legislation forming Conrail which was spun off into a publically-traded company in 1987.

Stay tuned for part 4 of this interview, where Kornhauser explains how the approach they developed for rails shift his career to a new track in the trucking industry.

View part 2 of this interview here.