UP has notified the mechanical department that 450 positions will be eliminated across the system this month. In addition, 250 other jobs were eliminated, most of them in Omaha, the Omaha World-Herald reported, citing a UP memo to employees.
The moves were not unexpected. On the railroad’s earnings call in January, executives said they were banking on $500 million in productivity improvements this year, a figure that would include an unspecified number of job cuts.
The mechanical department furloughs come as UP is reducing the size of its active locomotive and car fleets.
“We are not providing location-specific information; however, I can confirm Pine Bluff and Hinkle were impacted and the Pine Bluff locomotive shop is closing,” UP spokeswoman Kristen South says. “The workforce reduction is a result of a reduced locomotive fleet. As we look for ways to streamline our work under Unified Plan 2020, we have removed more than 1,200 locomotives and approximately 30,000 freight cars from our network since Aug. 1.”
The fleet reduction is partly due to the easing of congestion on UP’s system and partly due to operational improvements since the Oct. 1 launch of an operating plan based on the principles of Precision Scheduled Railroading.
As the railroad moves the same amount of tonnage on fewer trains it requires fewer locomotives and freight cars — and not as many people to maintain them.
UP eventually will require fewer train crews, as well, as it reduces train starts by moving tonnage on longer trains. Last month, executives said the railroad was exploring ways to shuffle its capital budget for this year to allow for siding extensions across the system in order to permit operation of ever-longer trains.
Pine Bluff shop workers told the Pine Bluff Commercial newspaper that 75 employees lost their jobs, leaving a workforce of 23 people at the former Cotton Belt facility.
It was unclear how many employees were furloughed at the Hinkle locomotive shop.
UP closed its locomotive shop in El Paso, Texas, in November.
UP employed 8,635 people in maintenance of equipment roles in December, according to data filed with the Surface Transportation Board, meaning the layoffs represent about 5 percent of the mechanical department’s headcount.
The railroad’s total employment stood at 41,696 in the fourth quarter, according to the railroad’s financial report. That was up slightly from 41,589 a year ago, largely due to the hiring of more train and engine crews.
UP posted record earnings in 2018 but has been cutting jobs as part of its drive to reach an operating ratio of 60 percent by 2020 and, ultimately, 55 percent. Most recently, the railroad cut nearly 700 positions in late 2018.
Big bucks for the big shots. Capitalism at work.
Mr. Grant:
Once I built a (HO scale model) railroad, I made it run
Made it race against time
Once I built a railroad, now it’s done
Brother can you spare a dime
Now I’m into LGB, I need a million today
I know that ain’t hay
Just checked their prices again, now I’m broke
Brother better send me a billion instead
Mr. Toth:
Breaking News: Amazon & Facebook, corporate mega-companies, have reportedly “$0” Federal tax due this year after tax-reform passed. Our family, however, where we barely break six-figures, saw an increase in individual Federal tax owed due to “tax reform” passed in 2017. Yes, that’s right. I am now paying MORE than I did pre-tax reform. King Donald and his minions fooled me, big time.
So your point is well-taken – the government “…got the gold mine, I got the shaft!” (quote courtesy of Jerry Reed). Brother, can you spare a dime?
Steven: Can a man pencil whip a tweet to make the numbers look good too?
I’m well aware that you can’t reviel the name of the port in question but is it on the east, west, or gulf coast?
Despite the fact Germany’s Deutsche Bahn AG continues to be faced with major problems to the best of my knowledge container traffic that moves through the ports in northern Germany is well organized with no delays currently being encountered.
I reread the Trains Newswire piece on UP’s CEO Vena. OK, the man will receive a base salary of $600,000 and be elgible to receive an annual $750,000 cash bonus. This isn’t chicken feed by any means either. Wonder if he’ll pay his “Honest Fair Share” of Federal Income Tax or do “Legal Loop Holes” exist that only a CEO can enjoy compared to Blue Collar Workers who pay up front and hope and pray for a shiny new dime refund at most?
Joseph, that is not the case. What is meant there, if you read the article, is that the day it was announced that Vena was the new COO, the stock price shot up so much it generated approximately 9 billion in value for the stock.
Meanwhile back here in reality, my friend says his hopper train finally departed after waiting 73hrs or more for power. The funny thing is, the train only shows departing 1:15 min late even though it carries a symbol date of the 13th. I guess anything can be pencil whipped to make the numbers look good.
…and the new CEO at UP will receive a $9 billion dollar package?
Trains Newswire, Jan. 9, 2019: Jim Vena: Union Pacific’s $9 Billion Dollar Man.
GIVE ME A BREAK!
Why is it that so many feel the an employer ‘owes’ someone a job? If a railroad is able to operate with fewer locos and cars, then they don’t need they people that maintain them, forget wallstreet, it’s just what happens in the real world.
Good point Mr Toth. We are all aware that playing the market can increase your buying power for whatever you may need or want. One wonders however, what will we do with all that buying power once there is no one to produce or deliver those products.
Joseph – and David – You may be right about UPRR, time will tell. Somehow I think Omaha will be smarter about PSR than Jacksonville has been.
Mr Withorn, I don’t believe that any one here is saying that jobs owed by an employer, just as we are not obligated to purchase services from that employer. I think the problem here is that at one time industries were driven by consumer demand. The old saying that the customer is always right. Now it seems that they are driven by Wall Street, Hedge funds and investors hoping for a quick and large return on their investments. When that starts costing jobs in that industry there is and should be cause for concern. It is not a secret that many investors have made quite a bit of money off of Wall Street, but many workers have lost jobs because of it.
Mr. Downie: Sadly it isn’t just Union Pacific but most of Corporate America in Century 21.
I hope all the railfans who own stock in UP enjoy their next dividend at the expense of all the railroaders who have lost their job and source of income.
Building America? Just ask the POTUS!
Robert, I wish you could see what I am seeing right now regarding “operating with fewer locomotives and cars”, and closing facililites, one recent one which appears to have already had a little backfire.
Same pooh as what happened on CN when PSR rolled-out in 2001: trains held for lack of crew and power, overflowing yards, angered shippers, and cooked books showing favourable but meaningless statistics, aimed at hiding the ugly reality. How could you expect things to be any different on bigger, more complex UP? Oh, this also reminds me of certain events starting around Houston’s Englewood, Strang and Dayton yards in 1997, quickly spreading and freezing the whole western US rail system in a matter of weeks.
Re-regulation is coming. If things turn really sour, re-regulation might even do railroads and their shippers some good. Talk about a self-inflicted tragedy.
https://en.wikipedia.org/wiki/Transportation_in_the_United_States#Cargo
Steven; your friend’s experience highlights one of the inconsistencies associated with PSR implementation. There are the BS service metrics the railroads serve up to the Wall Street “analysts” and then there is the reality experienced by the folks who are actually using the railroad. I guess the theory is if you keep banging out the message that PSR is the best thing since sliced bread, everyone simply has to believe it.
No wonder why BNSF keeps getting busier.
“The fleet reduction is partly due to the easing of congestion on UP’s system and partly due to operational improvements since the Oct. 1 launch of an operating plan based on the principles of Precision Scheduled Railroading.”
Meanwhile, a friend of mine who works for one of the Port railroads has had a hopper train ready to move since yesterday, and cant move do to a lack of power for the train. The power is supposedly coming off an inbound that wont be there until Friday.
Discusting news from a company going in the wrong direction. Shame on you UP!
Dateline: Trains News Wire, January 9, 2019: Jim Vena: Union Pacific’s $9 billion dollar man.
Vena’s paycheck’s gotta come from somewhere so might as well start by scraping customer service, lay off 700 employees (who give’s a rat’s rear end about them or their families anyway), close Pine Bluff shop, and whatever you do, be sure to polish the Union Pacific Building America sign in front of company HQ in Omaha, while preparing to celebrate the return of a Big Boy and Golden Spike ceremony.
Please pass the Barf Bag……opps. sorry, too late!
Curt, another question I have is in regards to the “downgrading” (my term) of a bunch of K and Z trains into I trains. Now, these once expedited trains are now making pickups and and/or setouts along the way, some of it manifest traffic. Moving cars efficiently? Yes I can see that I guess. But my question is this: did the shippers who were paying to have their traffic moved on an expedited schedule get a discount because their traffic is now moving on a slower schedule? I’m not saying anything top secret here. Any train buff with a scanner and who pays attention to operations around their given area can see the changes. I guess I am just more interested in the nuts and bolts behind the updated reports.
In regards to the hopper train, my friend is the one who asked me about it. Wanted to know what is going on and how the railroad can talk about storing engines but yet his train is waiting for power.
A couple of weeks back in a blurb here, the CEO said most of the customers were happy with the changes. Again, my question is this: in regards to the customers who are not happy, is there a dialogue going on with them to see what can be done to make them happy, or will they just let those customers find another option for moving their goods? I hate to see business lost, but I have no control over that.
It would be interesting to see data regarding which mode carries what percentage of freight today. Theres a good chance railroads are carrying proportionatly less than just ten years ago. Thats what you get when rail executives believe cutting in a booming economy achieves growth.
Bob Crowe,
Yes, I have a solution…and it will actually bring manufacturing jobs back to America, unlike a certain other individuals promise to do so. Initiate a split corporate tax rate on income based up on the location of the manufacturing center, if you use the correct percentage it will make it less expensive for companies to produce their products in the U.S. than overseas…win-win.
But there is money to pull another engine out a museum when we already have two, rebuild it, and then send it to a big party in May. How is this contributing to the 55 OR?
Glad I don’t work there. Been thru corporate lay off hell before.. Kevin Smith.
I’d bet that this PSR BS has morale somewhere in the negative range (except of course for the short-term-mentality investors).