The break between the use of the E suffix (R8 program) and the R suffix (GRIP) appears to be in January 1977, when Southern Pacific Equipment Co., was merged into Southern Pacific Transportation Co. To show this change in ownership, the suffix portion of SP's locomotive classification system was changed. Examples include (for the SD9s): EF618-E1 and EF618-E2 becoming EF618-R1 and EF618-R2. At the end of 1976, the tax advantages of SP selling the units to SP Equipment Co., then leasing them back, apparently went away. From 1977 on, SP was able to retain full ownership and still claim new-unit status for its rebuilt locomotives because, as a source at SP has said, the rebuild effort was costing more than 50 percent of the cost of a new locomotive. This allowed the railroad (instead of its equipment subsidiary) to recapitalize the rebuilt locomotives and begin depreciating their value again. The GRIP rebuild program was introduced by way of a letter dated December 6, 1976 from SP's Chief Mechanical Officer, at which time the change to the new suffix, from E to R, was also laid out as to how the locomotive classifications would also be changed.
One GP35 was rebuilt by SP as a prototype to draw up plans for outside contractors, that locomotive became 6300. Locomotives 6302-6323 and 6353-6361 were rebuilt by Morrison-Knudsen, and designated GP35E. Locomotives 6324-6352 were rebuilt by the Canadian National and designated GP35R.
When SP's GP35 fleet came due for overhaul, one GP35 was rebuilt by SP as a prototype to draw up plans for outside contractors, that locomotive became 6300. Locomotives 6302-6323 and 6353-6361 were rebuilt by Morrison-Knudsen, and designated GP35E. Locomotives 6324-6352 were rebuilt by the Canadian National and designated GP35R.
Between 1977-1979, the SP contracted with both Morrison-Knudsen and the Canadian National to rebuilt 60 of its GP35 locomotives: The 31 units rebuilt by M-K ( SP 6302-6323, 6353-6361 ) were completed between October 1978 and November 1979 and classed GP35E. The 29 units rebuilt by CN ( SP 6324-6352 ) were completed between January and December 1979 and classed GP35R.
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