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Re: “Devastation of Union Pacific management”
Author: Railbaron
Date: 11-17-2018 - 07:13
This has little to do with "Precision Railroading"; this is keeping Wall Street and the investors happy.
CSX got their operating ratio down to 58 and now investors want UP to do the same. They have their "2020 Plan" where by 2020 they would like to be down to 55, although 58 is a shorter term goal. If they don't do it the most senior management jobs are on the line and they want their jobs. And if they don't do it then you'll probably see somebody like Hunter Harrison come in and really gut UP. Investors don't care about long term company health - they want their profits.
Entire departments are being gutted and/or abolished to get rid of people. Regions have been cut to two from three so that entire management level can be eliminated. At the end of the day the closer a manager's job is to the cars, the safer his job is. That doesn't mean terminal managers, the lowest managers are safe, because they are cutting there also but also requiring managers to move from a surplus terminal to a shortage terminal and as one manager was told, his options are move or quit - he moved.
As far as freight, UP has made it known that if a shipper doesn't fit UP's operating plan, they don't want the business. They are storing cars by the thousands and shippers ill simply have to deal with a shortage of cars. UP's attitude is that fewer cars means fewer trains and that saves money. The same holds true with locomotives as fewer locomotives mean cost savings by not maintaining or operating them; trains will be maxed out to their maximum tonnage ratings so they can run fewer trains.
CSX got their operating ratio down to 58 and now investors want UP to do the same. They have their "2020 Plan" where by 2020 they would like to be down to 55, although 58 is a shorter term goal. If they don't do it the most senior management jobs are on the line and they want their jobs. And if they don't do it then you'll probably see somebody like Hunter Harrison come in and really gut UP. Investors don't care about long term company health - they want their profits.
Entire departments are being gutted and/or abolished to get rid of people. Regions have been cut to two from three so that entire management level can be eliminated. At the end of the day the closer a manager's job is to the cars, the safer his job is. That doesn't mean terminal managers, the lowest managers are safe, because they are cutting there also but also requiring managers to move from a surplus terminal to a shortage terminal and as one manager was told, his options are move or quit - he moved.
As far as freight, UP has made it known that if a shipper doesn't fit UP's operating plan, they don't want the business. They are storing cars by the thousands and shippers ill simply have to deal with a shortage of cars. UP's attitude is that fewer cars means fewer trains and that saves money. The same holds true with locomotives as fewer locomotives mean cost savings by not maintaining or operating them; trains will be maxed out to their maximum tonnage ratings so they can run fewer trains.
