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.