In 1988 Southern Pacific was bought by Rio Grande Industries who owned the D&RGW RR, the takeover is a somewhat complicated issue, as was the later Union Pacific takeover. The short story would seem to be that SP had better conditions as far as access, trackage rights and run-through agreements was concerned so the whole corporation came under the Southern Pacific umbrella.
In a bid to present a modern image, perhaps unify all the paint scheme into one and probably in a small way boost employee morale, a new paint scheme was developed based on the practices of the former separate railroads. This became known in time as the "Speed Lettering" or "Speed Lettered"
The very first unit to be painted in this scheme was a GP40 rebuilt by Morrison-Knudsen numbered #7107 and known on the SP as a GP40M-2, all units up to #7111 had a smaller size roadname than what would be applied to GP40M-2's from #7112 onwards; and other Speed Lettered units would have a size determined by their size, it was obviously smaller on a Slug or Switcher than an SD70M.
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