The Santa Fe–Southern Pacific merger was an attempted corporate consolidation of two of the major railroads in the Western United States at the time: the Atchison, Topeka and Santa Fe Railway and the Southern Pacific Railroad. The approximately US$5 billion deal (US$15.1 billion in 2024 dollars) was announced in September 1983 and in December 1983, both companies were acquired by a new holding company, the Southern Pacific Santa Fe Corporation and both companies' extensive non-railroad related assets were immediately combined. However, the Southern Pacific Railroad remained in a voting trust and the railroads continued to be operated independently and competitively while the merger worked through the regulatory process.
In March 1984, the companies asked the Interstate Commerce Commission (ICC) for approval to merge their railroads. Confident the deal would be approved, the company began repainting their locomotives into a new unified paint scheme that would allow the future railroad to be called SPSF.
However, in a surprise July 1986 decision, the ICC denied the merger and gave the companies two years to split. Southern Pacific was sold to Rio Grande Industries for US$1.02 billion in October 1988, the companies' California real estate holdings were spun off into a new company called Catellus Development Corporation, which would become the California's largest private landowner, and the former holding company would rename itself Santa Fe Pacific Corporation and retain the Santa Fe Railroad and all the non-railroad businesses of both predecessors.
Six months after the merger was denied, a pair of Atchison Topeka & Santa Fe diesels sit in the railway's San Bernardino diesel facility, painted in the proposed scheme for the ill-fated merger – upon approval, they just had to add large "SP" letters to their hoods and everything would be hunky-dory. This scheme was dubbed by railfans as the "Kodachrome Scheme," due the commonality of the colors shared with the Kodachrome slide film boxes purchased by so many railfans. Within a few years, on both ATSF and SP diesels, this scheme would be repainted into oblivion.
Santa Fe SD45-2 5824 is the former ATSF 7224, originally ATSF 5632. Coupled behind it is U36C 8752, which did not require renumbering upon the merger. (San Bernardino, California – December 23, 1986)
