History
In 1887, Arthur Edward Stilwell and Edward L. Martin began construction on and incorporated the Kansas City Suburban Belt Railway in suburban Kansas City, Missouri. Beginning operations in 1890, the railroad served the Argentine District in Kansas City, Kansas; Independence, Missouri; and the riverside commercial and industrial districts of Kansas City.
While the Belt Railway was a success, Stilwell had a much bigger dream. Over the ensuing decade, the line grew through construction and acquisition of other roads, such as the Texarkana and Fort Smith Railway, to become a through route between Kansas City and Port Arthur, Texas. With the final spike being driven north of Beaumont, Texas, on September 11, 1897, the Kansas City, Pittsburg and Gulf Railroad Company (KCP&G) was completed. In 1900, KCP&G became The Kansas City Southern Railway Company (KCS).[9] In 1939, KCS acquired the Louisiana and Arkansas Railway (L&A), providing a route extending from Dallas to New Orleans, via Shreveport, Louisiana.
In 1962, KCS reorganized as a holding company, Kansas City Southern Industries, Inc. (KCSI), as it began to diversify its interests into other industries under the CEO William Deramus III. The new KCSI focused primarily on the financial industry, along with the rail industry. In 1969, KCSI started the two largest companies that came out of the diversification: DST Systems and Janus Capital Group, which was known as Stilwell Financial at the time.[10][11] DST Systems is a software development firm that specializes in information processing and management, with the goal of improving efficiency, productivity, and customer service.[12] Janus Capital Group is a finance firm that provides growth and risk-managed investment strategies.[13]
Expansion in the 1990s
The core KCSI rail system changed little until the 1990s, when the purchase of MidSouth Rail extended KCSI's reach east from Shreveport into Mississippi and Alabama. Combined with existing KCSI routes, this created an east-west mainline marketed as the Meridian Speedway. Another acquisition, the Gateway Western Railway, extended KCS's reach from Kansas City to St. Louis, Missouri, and Springfield, Illinois.
The 1990s also saw KCSI expand into Mexico with the acquisition of partial interests in the Texas Mexican Railway (TM) and Grupo Transportación Ferroviaria Mexicana (TFM). TFM was created when KCSI and Transportacion Maritima Mexicana (TMM) purchased a government concession to operate a rail system in Mexico. The concession was also bid on by many other major companies, including the United States' largest railroad, Union Pacific Railroad. KCSI and TMM bid on, and won, the concession for $1.4 billion USD, paying 49% and 51%, respectively. TMM already partially owned the Texas Mexican Railway through a previous concession from the Mexican government. TM was particularly important to KCSI because they held the link from KCSI tracks to TFM tracks via trackage rights over the Union Pacific line.
Shortly after acquiring the Mexican government's concession, KCSI entered into another joint venture to purchase a government concession. On June 19, 1998, the government of Panama
