UP at capacity

Here's something I found I thought you'd like to see:

OMAHA, Neb. (AP) – The largest U.S. railroad is turning away some business as it struggles with a train crew shortage that has put its system near capacity, company officials said.
“There is more business than we can handle, really,” said Kathryn Blackwell, Union Pacific Corp.’s general director of corporate communications.
Beginning Monday, United Parcel Service will use trucks to transport packages that would normally go on Union Pacific’s express rail routes once a week each way from Los Angeles to New York, Dallas and Memphis, Tenn.
Under the one-month arrangement, Union Pacific will pay the added costs of drivers, gasoline and other expenses of putting those items on trucks, Black said.

Why does UP keep shooting itself in the foot?

Examples:

1. Took over C&NW and moved the dispatching job to Omaha. All of sudden METRA service goes to pot while they try to move freight. Made commuters not too friendly towards UP


2. Take over SP and get rid of their staff and all of a sudden they are in meltdown


3. Now they win the contract for UPS over BNSF and they again their RR is backlogged.



What are thinking?


Jerry

This is a classic example of what happens to a corporation trying to operate with few employees to please "Wall Street" and investors, stockholders.

Union Pacific should have learned something from the first "meltdown" a couple of years ago.

When will corporations learn that their most valuable asset isn't the stockholder, but it's their everyday employee who keeps the "wheels" profitbility turning.

mixer7 wrote:This is a classic example of what happens to a corporation trying to operate with few employees to please "Wall Street" and investors, stockholders.

Union Pacific should have learned something from the first "meltdown" a couple of years ago.

When will corporations learn that their most valuable asset isn't the stockholder, but it's their everyday employee who keeps the "wheels" profitbility turning.

Part of the problem is that corporations are not often adept at "learning." The culture of railroads is almost universally one of fear, which spawns over-reactions and avoidance behavior. Those in charge of hiring were afraid that seniors would disapprove if they were more agressive. No one wants to be the one who sticks out his/her neck when seeing something around the bend that doesn't please the CEO. Bad news is punished, and the organization suffers the consequences. Afterward, the tradition is to point fingers in all directions but home.

UP, as a company, is arrogant to a fault. The behavior that leads to mistakes of this nature is rewarded, therefore they repeat again and again.

Here is a "brief passage" from Today's Wall Street Journal. Their site is by subscription so a link to the article in its entirety is unavailable.

"The worst problems are focused in the Los Angeles area and along Union Pacific's busy freight route between California and Texas. But in many parts of the carrier's 33,000-mile route system, freight trains are coming to a stop on passing tracks and even on main tracks, sometimes for hours, because crews reach the limit of their federally mandated maximum 12-hour shifts, and new crews aren't available right away to move the trains forward."

Union Pacific, which is based in Omaha, Neb., has acknowledged that it far underestimated the number of train crew members that would leave after changes in the federal retirement law for railroaders two years ago. The new law, which lowered the age at which employees with 30 years service can retire with full benefits to 60 from 62 years of age, left Union Pacific short of locomotive engineers and conductors".

That's got to be a first; in the absence of a natural disaster or a terminal area being "clogged" account, for example, a strike, a railroad saying "take your business elsewhere, we haven't enough people on the payroll to move it over the road.

Also of interest is an article from The New York Times March 31 edition. Trust everyone is pleased to see Don Phillips byline with the most influential and respected newspaper out there.

http://www.nytimes.com/2004/03/31/business/31rail.html

Gilbert B Norman wrote: Also of interest is an article from The New York Times March 31 edition. Trust everyone is pleased to see Don Phillips byline ...

Yea and verily. The editors and publishers of the Post must feel REALLY stupid right now.

... with the most influential and respected newspaper out there.

Not so fast, keem-o-sobby... (so much for phonetic spelling )

I submit any of the following three papers are more influential, and certainly at least as respected, if not more so, than the New York Democrat:

The Wall Street Republican

The Times of London

The Financial Times

Must be great for those UP stockholders!!!
Just think - you own stock in a company that TURNS away revenue!!
Does wonders for the financial statements.

Serves the arrogant SOBs right. Maybe if they spent less time, money and energy trying to license their logos and their predecessors' logos and sticking it to the model railroad hobby, they instead could have paid attention to what was really going on.

But that's the UPRR for you. The most arrogant railroad ever.
Screwing the public and stockholders since 1861.
:D

Must be great for those UP stockholders!!!

Actually my Union Pacific stock has done quite well over the years and I look forward to the quarterly divedends-which have been raised 33% this past year.

Maybe if they spent less time, money and energy trying to license their logos and their predecessors' logos and sticking it to the model railroad hobby, they instead could have paid attention to what was really going on.

What does an underestimation of the economic recovery and the subsequent need to add more train crews have to do with any type of licensing agreement that U.P. is enacting?
Last time I looked most people pay a fee to use anothers intellectual property whether it went on clothing, mugs or toy trains. A better argument might be made if one were to dispute the Union Pacific ownership of logos from the aquired fallen flags.

I can't speak for anywhere else on the U.P. system but I know morale here in the L.A. Basin is the pits and sinking even faster. If I didnt have too much to loose in my retirement I would quit railroading today. We have a management that feels that employees having levels of dicipline make better employees then those who dont. Typical nineteenth century thinking... Why would these people retire at the first chance they have instead of staying on? What is the motivation to stay past retirement day? In our case. 54 months with out a contract would be a good start. Of course there is the FTX program except it does not apply here in the L.A. basin. FMLA? U.P forces an employee to use vacation time before the FMLA kicks in. Violation of federal law? Yes, but we are the Union Pacific and we will tie it up in courts for years to come. Berevement leave? Union Pacific has defined exactly what a family unit is by not reconizing "step children" as family members and denying three days pay to employees who attend funerals for step children. I have two "step children" (I hate that term) that I have raised since the oldest was 8. He is 22 and in Afghanistan. Hs is no differant than any of my "natural" children -except in the eyes of the big Yellow Brick. Anyone wishes to challenge me on any of this feel free. I have all the documentation to back my statements.

Paul
Redlands, Ca.

Union Pacific... We are Borg. Resistance is futile.

As someone who is a life long railroader, that has held both management and craft positions in the industry I can safely say that my four years at the U.P. were the most miserable, by far, in my 30 year career. I have seldom met a more ignorant and arrogant bunch of managers (with exceptions here and there of course). From top to bottom they were mostly ignorant of their own safety and operating rules, made decisions based on scant information without regard to a bigger picture and routinely punished those below them for their own failings, the micro managing was incredible. I can only assume that the U.P. continues to make a profit by sheer momentum and having captive shippers (a quote to me from a grain elevator manager: "If I could helicopter my cars over to the BNSF yard I would, the U.P. is just terrible, I don't know what I'm going to do").
Things will never get better in the railroad shipping industry until the government clamps down on corporations like the U.P., unlikely with the Vice President of the United States being a former board member and are you aware that "Big Dick" Davidson is the chairman of the Transportation Safety Committee reporting to Tom Ridge!? The man that shouldn't be running a toy railroad is making safety recommendations that affect the safety of your family regarding dangerous chemicals being subject to terrorist actions in your communities, think about it.
Enough ranting, I would recommend this website started by the Families of U.P. employees for the inside story about "Uncle Pete". http://www.rresq.com/

Thanks for that, outdoorbob. I've found that western roads, in general, have been operated in the manner in which you state so well. A bit of experience of my own with the big yellow thing has shown me much of the same sort of culture.

Organizationally, they are about as adept as they were when the company was founded. Technology has advanced a great deal. But management practices, as they apply to dealing with people anyway, are archaic at best.

What it comes down to is that there are no advantages for anyone who tries harder than they have to. Therefore more energy is expended avoiding blame and conducting micro-management than to making the company work better overall. Capacity is severely limited in this way, I believe.

Compare to Southwest Airlines where people actually work as a team to keep things running well, and actually have fun doing it! You'll not find a hint of this on the large yellow machine from Omaha.

Here's what I've seen on my 12 years with Uncle Pete at North Platte:
When things go right, Upper management takes all the credit and cuts themselves a nice, fat bonus check. When things go wrong, Us poor slobs on the shop floor get the blame and upper management cuts themselves a nice, fat bonus check.

arnstg wrote:Why does UP keep shooting itself in the foot?

Because it can.

Union Pacific is responsible to UNP shareholders. As long as investors are satisfied with the returns they're getting from the current management--through dividends, stock appreciation or both--that's all that matters. If you think UP is "shooting itself in the foot," the people to take up that issue with are the shareholders.

As long as investors are satisfied with the returns they're getting from the current management--through dividends, stock appreciation or both--that's all that matters.

True statement, as far as it goes.

Leading indicators of how shareholders will eventually view the situation are the satisfaction of customers and the growth rate of revenues/earnings per share. My guess is that a 62% drop in net earnings is not auspicious in this regard. Deflecting business is an excellent way to displease current and potential customers in the short run, and shareholders in the long run.

I predict impending changeouts in the "persons in charge" at UPRR HQ.

Here I am, watching Fox News and reading these UP posts, when that commercial narrated by Sam Elliott comes on.

Union Pacific--Building America?