Thread regarding Union Pacific Corp. layoffs

He didn’t set the rules. They’ve been in place for many, many years. The company has legal responsibility to the shareholders. Fiduciary responsibility. The money the spend has to be in the best interest of the shareholders. You not liking it doesn’t make anyone a bully. It’s the way it works in this country. You’re barking up the wrong tree.

You don’t get to set the rules like a bully. I don’t have to change it I don’t have to agree with it and I don’t have to leave. The sham capitalism that union pacific railroad operates under will destroy itself. And I will never give up on fighting UP and the people that agree with the way they do business. I will never quit and I will never give up. This not so dumb bridge is iconic of the greed and stupidity behind UPRR so it’s a perfect place to discuss the broader problems.

@3jti,

That's all fine, but the bottom line is that regardless of what you or anyone else thinks is morally correct, Union Pacific, as a privately held/publicly traded company, can cancel any project they want by virtue of shareholder prerogative.

You're trying to have a debate about whether their decision not to build this dumb bridge is the right thing to do according to your personal morality, and whether or not the best interest of the public is being properly served. That's the wrong debate to be having, and best left to another thread.

Bottom line: if they don't want to build the bridge, they don't have to, and it doesn't matter what you think about it unless you happen to be a major shareholder. That's capitalism. Deal with it, change it, or move elsewhere.

This post hit a nerve and I do believe some senior managers and maybe C-suite read this one.

I am the OP and I fully understand that UPRR is a private company, owned by shareholders, not the government, and nowhere in my OP did I suggest that UP is not a private company.
However, there are major differences between what I call a "real" private company, like Joe's Plumbing, Facebook, or Apple and organizations that provide societally indispensable utilities, like Verizon, UPRR, your local sanitary sewer district, or your local power company. These organizations, public or private, are natural monopolies, some far more naturally monopolistic than others. For instance, an electric company is the only one that can logically own the one power line going to your home. Verizon cell phone service has some real competition from AT&T, so not as much of a natural monopoly, but getting there.

UPRR and its Class I brethren are steel toll roads that set their own tolls. Outside of NAFTA, a railroad is treated the same as an interstate highway, i.e. a natural monopoly that is so fundamentally important to the economy, defense, and functioning of a nation, that it is fairest for it to be owned by the government. Again, Lance does not want to get to his exit for I-80 and have to pick between I-80A, I-80B, I-80C...which is what real competition looks like. Instead, only one I-80 fits through Omaha, it is free of charge, and we all use it. UPRR is not that different of a choice for most shippers. For many of them, only the UP toll road makes sense to drive on and nobody today will acquire a 100 foot wide right of way to compete. Most shippers only other realistic outlet is to truck everything...in which case, they go back to the federally owned highway system.

In most countries in this world, people figured out that having private railroads and public highways is a sham. The whole thing is an integrated system. Traffic flows from one to another and vice-versa. When private UPRR decides to put stock value and the arbitrary OR (another scam designed to artificially boost stock price) above all else, more traffic flows onto publicly funded highways. So we the American citizens, pay more in highway maintenance.

Not rebuilding a 102 year old swing span bridge over a major barge river, i.e. the mighty Mississippi, puts more trucks on highways. If we had a bridge that could handle 50 to 80 mph speeds, and allowed barges to go under unimpeded, then there would be more capacity on the railroad and the river modes of transport, and there would be less traffic on the interstate. Again, outside of piping liquids, railroads are the most efficient means of moving people and freight per gallon of fuel.

C-Suite understands the scary point I am making, so that's why they read this. Because guys like me are fine with free market capitalism in real free markets, like those for cell phones or cars. However, when we have natural monopolies, then either we bust them, nationalize them, or regulate them so they don't take advantage of all of us.

The Class I railroads don't have to be run as sham "free market" companies, they could just as well be run as public utilities or completely nationalized. FYI, this happened in WWI and some at the time argued that maybe the government should just hold on to them. I guarantee you C-suite million dollar salaries would disappear under that utility railroad model, but you, the mechanics, engineers, and field professionals would not be out of a job just to satisfy some Wall Street metric while Lance Fritz goes on television and rails against Chinese tariffs. They're afraid of that scenario, and that's why they're reading this post. They know that the Staggers Act made them rich, but they also know that PSR is fundamentally breaking the unwritten covenant in that act which is "do more with more", not "less with less".

Repealing the Staggers Act is to Fritz and company what a crucifix is to a vampire. Fritz and company love the trappings, money, and cultural propensity to bless private business and damn the government. They wrap themselves up in that. The reality is that Union Pacific Railroad is no GM, Ford, Catterpillar, US Steel, Foxcon, Apple, your local restaurant…i.e. companies with tough competition that provide dispensable (key word dispensable) services and products.

If they continue fuc**** the railroad for cash, at some point, unique (to put it nicely) individuals like Sanders, Warren, and their thousands of truly anti-capitalist supporters will shine that spotlight on Fritz and company. At that point, my post will seem like a very well thought out, educated, and what’s the word…civil, opinion.

@2drz,

I don't sit in the C-Suite, and I don't support the current UP policy on workforce reductions, or (frankly) any other policy they have.

There is a difference between pointing out someone is wrong and taking the opposite side. My point stands: UP is a privately owned, publicly traded company, and as such carries no obligation to anyone other than their shareholders. They are not "publicly owned" as the OP and some others have suggested. If they decide not to build a bridge, then they don't have to build it. It's that simple.

If anyone wants to debate whether what UP is doing is morally right or wrong, I would suggest starting up a new thread. As far as capitalism is concerned, the only morality is the bottom line.

1uii

You just confirmed what we wondered all along, that you guys in the C suite do read these things. You’re still bending over for the shareholders and taking it with a smile though....

UP didn’t fire a bunch of mechanics at METRA. They furloughed Carmen at Proviso, who in turn displaced apprentices at METRA. METRA didn’t lose headcount. Proviso did.

Strange They were ordered by the us coast guard to replace this bridge

@1bwa,

UP isn't "publicly owned" it is publicly traded. There are important differences between the two.

UP is a private company and they are under no obligation undertake investments for any reason other than the benefit of their shareholders. Most people refer to this as free-market capitalism.

What your posts are suggesting is that UP is comparable to fully nationalized transportation companies in other countries. It isn't. You're wrong, and so is everyone who agrees with you.

The fundamental problem on this quasi-forum is that people are missing the forest for the trees.

Someone here wrote that the OP is speculating as to why this project was cancelled and that it was due to lower future profits. Another wrote that Chicago is a shell of its former self, and therefore, there is less demand on the bridge. Both comments are built on false premises. Hear me out.

The private freight railroads within NAFTA are essentially toll roads that get to set their own tolls. That's what they fundamentally are. Your actual toll roads have a great deal of government oversight and can't set tolls willy nilly, or shut down sections of toll road, or shut down lanes, to boost profit PSR style.

Until the Staggers Act was passed, the government had to approve the toll rate charged by the RR and also had to allow railroads to shut down lines, i.e. lanes. They had to do that, because a long time ago, before the free interstate highways were built, the railroads were the only way to really move people and freight and they used their power to overcharge customers and squeeze us dry.

Once Uncle Sam built the Eisenhower interstate system, which is essentially free to use, why would anyone spend money on a steel toll-road? So the railroads went bankrupt.

The problem is that we have a national freight transportation system. The interstate highways, US routes, toll roads, freight, and commuter railroads do not operate in separate silos. The railroad is the most energy efficient way to move people and freight per gallon of fuel. When the railroads went bankrupt, that meant more trucks on interstate highways intended for medium and short trips, thereby clogging those highways, generating pollution and wasting precious fuel. There are industries like coal, petrochemicals, and aggregate mining that are absolutely made for being hauled by rail and would overwhelm highway structures.

So, the government passed the Staggers Act. The railroads got to set their own tolls and even could shut down loss making lines. The railroads could unashamedly exploit their monopolies over captive industries, their bread and butter for making money. However, the unwritten expectation was that those profits would be used to upgrade the national freight railroad system and eventually grow it so that the overall national transportation system would use more fuel efficient trains and slow down the unsustainable growth in trucking.

Outside of NAFTA, railroads are just like highways, government owned. There is nothing fundamentally wrong with that government owned model unless you think you should pay a toll to a private company every time you get on the interstate...

UP's profits are often a facade when looked at from the perspective of the national transportation network. UP forces state level Departments of Transportation to comply with unyielding demands when a new overpass or highway is built over their tracks. Caltrans, for instance,had to shut down certain major highway improvements because UP would not allow a certain column in their yard, and would not even consider shutting down traffic on a few tracks to improve an interstate used by millions. This type of story repeats itself in every state UP crosses.

Then there is passenger service. Your highway is free and your gas tax is not enough to pay for it. So, your highway is heavily subsidized. Passenger trains are subsidized too, and the goal is to take people off the highway and put them in a more energy efficient train. Maybe they'll enjoy the ride too, instead of gridlock.

Well, UP does not work well with passenger service. It won't cooperate with California high speed rail, it puts Amtrak trains behind schedule as they have to wait for freight trains to pass, and it just fired a bunch of mechanics working at Metra operations.

In other countries, a bugbear these days being China, this categorically does not happen. Holistic decisions are made and the government owns all major transportation assets. So when a new highway interchange is built, or conversely a new railroad yard, assets are moved around to maximize overall utility. If a column has to go in the rail yard, fine, that will happen, rail traffic will shut down on a couple of yard tracks which is really no big deal in the big scheme of things. In the US UPRR pulls the private property card and tells the DOT to f-off, and that there is no way critical rail traffic can be put on hold...nevermind the fact that PSR will shut the whole yard down in a week. Likewise, the DOT gives UP the finger if a rail expansion involves moving a piece of interstate...which it almost never does, but I'm trying to be fair.

When you consider those hidden costs that UP incurs on the overall system and you factor in the reality that Uncle Sam gave UP their land in the first place...which is another story... how much of a net profit does UP really generate for the country?

Going back to the bridge. This bridge is on the transcontinental route paralleling I-80. We will be in an economic apocalypse before this route will get less than 20 freight trains a day. The bridge is over 100 years old and you have to go over it really slow because it is a swing span to boot. Outside of the US, such a bridge would be in pictures in a museum. Here, we run freight traffic at a snail's pace on it and will continue to do so until it breaks in an emergency, or jams open or jams closed...which is always funny.

Staggers Act envisioned that a virtuous cycle would develop where UP and their like would make big money and take a bridge like this, replace it, triple track it, advertise the higher speeds and reliability, grow the business, and put more trains on more rails. Instead, a death spiral is in place where UP sweats the assets, plateaus or lowers the business, and increase earnings per share at all costs... because UP can do that when there are only four American Class I railroads.

By private company bgo meant not a government entity...

bgo - UP is NOT a private company. They are publicly owned, which is why Lance and Rob are bending over, and the main reason UP now s—s. As a publicly owned company, with the luxury of acting like a monopoly, I opine the company leadership should have some obligation to leave the country a better place than they found it. God knows this country has made them fabulously wealthy for being rather mediocre and unethical leaders.

@OP,

A lot of what you posted is speculative. The simplest explanation for why the project was canceled is a change in the investment climate brought on by economic policies that add more risk to already risky investments.

A lot of people on this thread, including the OP, seem to be forgetting that UP is a private company, and as such it has no obligation to pursue a project deemed potentially unprofitable based on what anyone but their shareholders want. That's capitalism. Deal with it, change it, or move elsewhere.

I did not know about this at all, thank you for telling us.

I bet Fritz didn't mention to the President that he cancelled this project along with Brazos...while firing thousands of employees and purchasing foreign steel. All on the heels of record profits courtesy of the same President.

Lance just could not source his rails from American mills...just had to go to Japan. That I do know about and it disgusts me as much as this decision.

OP: Are your surprised? Several capital gains projects (especially within the bridge department) were cancelled over the past year. The tariffs that you agreement people seemed to like so much put a major dent in projected profits, so being the greedy (–) that they are, they cut jobs and scaled back major investments.

This project has been cancelled for months. Why are we all of a sudden in an uproar about it?

They are driving away customers, Hauling less and less cars so why spend the money, Chicago is a shell of what it once was so the traffic is down.