FEBRUARY 26, 2023 — MANAGEMENT CHANGE, PERSONNEL DISRUPTIONS COMING
Activist investor, New York, NewYork-based hedge fund Soroban Capital Partners, has demanded the replacement of CEO Lance Fritz in 2023.
“As you are aware, we have been consistent in privately expressing to you and other Board members our displeasure with years of persistent operating underperformance at UNP and our long-held view that current management is not capable of driving strong operating performance. This most recently includes our August 2022 Board-level discussion where we highlighted the gravity of today’s challenges. Regrettably, acute operating issues at UNP have continued, and we see a heightened risk of permanent damage to the franchise if left unaddressed. While it is highly atypical for Soroban to publicly disclose our communication with a board of directors, given the Board’s prolonged inaction despite years of underperformance, we feel it is critical for the Company’s future that we highlight the need for Mr. Fritz to be replaced with best-in-class leadership.”
When management changes, look for reorganization and personnel changes.
JUNE 21, 2021 — PALESTINE, TEXAS LAYOFFS DELAYED BY COURT BATTLE.
“An ongoing legal battle has delayed plans to lay off 57 workers at Union Pacific’s Palestine railcar shop. At issue is a 1954 contract between the railroad AND THE MUNICIPALITY.
APRIL 18, 2021 — CLOSURE OF MAIN RAILCAR REPAIR FACILITY IN PALESTINE, TEXAS WITH 57 LAYOFFS
Union Pacific’s Palestine, Texas railcar repair facility will close June 14, 2021, with 57 layoffs.
According to a company spokesperson, “While Union Pacific is closing our main car repair facility in Palestine, limited car repair activities will continue in the Palestine area. We did not take today’s step lightly but we are determined to do the right thing for thousands of customers, employees, and communities who rely on us to help build sustainable economic growth across the western two-thirds of the United States. We appreciate the support we have received over the years in the communities of Palestine and Anderson County, as well as the hard work and dedication of our employees. We are working with those impacted to help them with job placement activities.”
SEPTEMBER 5, 2020 — MORE LAYOFFS COMING
Although the company declines to state how many salaried and union jobs are on the chopping block, it did confirm that there will be a significant number of layoffs.
According to a company spokesperson, “These are difficult decisions; however, we remain committed to providing our customers safe, efficient, and reliable service that ensures Union Pacific remains a strong and competitive company."
APRIL 23, 2020 — NEW COST-CUTTING MEASURES INCLUDE EXECUTIVE PAY CUTS AND FORCED UNPAID LEAVE
Citing an “unprecedented drop” in freight traffic, Union Pacific President and CEO Lance Fritz announced “Many of our customers have reduced or halted production and overall freight transportation has declined dramatically.
Union Pacific has enacted several cost-saving measures, but they are not sufficient to offset the significant decline in volume.
Accordingly, the railroad also is implementing changes that will impact our workforce.
Every non-union UP employee will take one week of unpaid leave in May, June, July and August. Executives and board members will see a 25% reduction in pay over that same time period.
I considered many possible scenarios, including furloughs or permanent workforce reductions,but the leaves and pay cuts meet UP’s short-term needs. UP has canceled its 2020 summer internship program, reduced or eliminated non-agreement hiring, and eliminated nonessential spending through the end of 2020.”
OCTOBER 17, 2019 — SHUTTING DOWN OPERATIONS AT THE NEFF RAIL YARD.
The company has announced that it will be transferring switching operations from its Neff Rail Yard in Kansas City, Missouri to a rail yard in Kansas City, Kansas a distance of 17 miles. The number of layoffs is uncertain at this time due to the proximity of the two locations but is estimated as being up to 200 employees.
A company spokesperson noted that this is another facet of the company’s unified plan to streamline operations as part of its Unified Plan 2020 which will improve service reliability for customers, increase operating efficiency and reduce network complexity.
UPDATE - MAY 22, 2019 — OREGON LAYOFFS
UP has announced that they will be laying off 195 employees at the Hinkle Rail Yard, Supply Warehouse, and Mechanical Locomotive Shop in Hermiston, Oregon. The layoffs include machinists, electricians, switchmen, material handlers, and general laborers.
The rail yard will be permanently closed and The locomotive repair shop and Supply Warehouse will remain open.
The layoffs are part of the "continuous improvement plan" known as “Unified Plan 2020, which streamlines operations as we ensure Union Pacific remains a strong and competitive company."
UPDATE: NOVEMBER, 26, 2018 - ADDITIONAL LAYOFFS ANNOUNCED
In addition to the previously announced layoffs, UP will be laying off an additional 60 employees, mostly in the Little Rock, Arkansas area.
According to a company spokesperson, “The workforce reduction is an effort to reduce our general and administrative support structure as we continue implementing our new operating plan, Unified Plan 2020, which ensures Union Pacific remains a strong, competitive, and vibrant company.
UPDATE: OCTOBER 25, 2018 UNION PACIFIC ANNOUNCES ADDITIONAL LAYOFFS - 675 POSITIONS TO BE ELIMINATED
Union Pacific has announced prior to the release of its 3rd Quarter results that it will be laying off approximately 475 employees and 200 contracted positions as the first of additional rounds of job cuts as it implements a new operating plan to reduce or eliminate many of the service and congestion issues that are currently plaguing the company.
Chairman and CEO Lance Fritz noted that “these steps are part of reducing our general and administrative support structure by roughly 30% by 2020.”
Other efforts which may portend a reduction in force include: consolidating operations from three regions — north, south, and west — to two: north and south; eliminating five service units: Denver, Livonia, St. Louis, Sunset, and Twin Cities; and transferring customer service from the Marketing & Sales to Operations.
Original post
Like many other large industrial corporations, Union Pacific has announced that it will be reducing its workforce by approximately 700 employees, mostly at its Omaha, Nebraska headquarters. It is anticipated that the cuts will impact 500 management and administrative positions and about 250 hourly positions by mid-September (2017).
Union Pacific, a Fortune-500 company, and the nation’s second-largest freight line is profitable but sees that cost-cutting improvements can be made. The key metric driving the cuts is the “operating ratio” which is a railroad’s proxy for profitability. The ratio consists of expressing operating expenses as a percentage of revenue. The company is prepared to spend approximately $90 million, including $15 million for severance pay plus pension benefits and other expenses, to reduce their operating ratio from last quarter’s 61.8 percent to a more desirable 55.5%. The company plans to offer early retirement and buyout plans for employees meeting certain criteria. This should ease the financial and emotional stress on some employees.
Union Pacific is looking at the benefits of running longer trains and more automated systems that replace personnel. One significant adverse impact on the industry came from former President Barack Obama’s climate initiatives and his attack on coal mining and coal-fired power generation plants. The last two years have been rough for the industry. Competitor, CSX announced that it had trimmed its workforce by approximately 2,300 hundred positions and 900 locomotives.
However, an opportunity is where you find it because several realtors in Omaha appear to be looking for relocation sales into a tight and rising housing market.
Change is coming. There will always be a tomorrow, no matter how much you may try to ignore it. There are no guarantees in life or promises for a bright future. Just because something bad hasn't happened yet, doesn't mean it won't. It can happen to anyone, anytime, anywhere. No one is guaranteed to wake up tomorrow and still have a job by evening. Are you now wondering, Am I Next?