Most people, railroad or otherwise, are myopic. The lower they are on the ladder, the more myopic they are likely to be. That's in reply to the guy above talking about MOPs while the house is burning to the ground.
UP, like all the other railroads, will over cut, break the railroad, and then hire back just a smidgen after it hits rock bottom. That's all CP, CN, and CSX have done. They demolished their railroads, and then pulled back 1/8". For all of these organizations, the long term outlook is unknown because the damage done to their in house expertise is massive, and it will take many years to really tell the damage.
That being said, here are some myths and food for thought:
- UP is saving money by outsourcing work. That is a myth. The external companies popping up have a profit margin, are not directed by UP, and also have to pay fairly high wages along with benefits. They may pay their employees less than UP, but the overall cost to UP for employing these companies is higher than simply hiring someone in house based on the profit margin alone.
The multi-millionaire hedge funds behind the board don't know, or don't care, because they categorize these costs as capital expenses, which lowers their tax bill and does not count towards the operating ratio. In-house employees, on the other hand, hit the OR.
They will pump and dump. They pump by laying you off, talking up the operating ratio, boosting it, raising the stock price, and then selling for profit after a year.
When you have hundreds of millions to invest, a 10% boost in the stock value could mean tens of millions of dollars in capital gains. Oh, and those gains are taxed at a much lower rate than your working wages...something like 15%.
- All the railroads in North America will get away with it because they operate as duopolies, and for many of their customers, de-facto monopolies. Diesel is expensive, truck drivers are scarce, and we've built all the railroad corridors that there are to build, i.e. we cannot really acquire new corridors of land.
Even if UP decided to take a giant turd on itself, many of its customers, especially those moving heavy bulk commodities, have nowhere else to go. This is even more so in Canada, where the distances are longer, the highways more scarce...a perfect country for north-american style private railroads.
- Long term, we, the workers (management or otherwise...railroad is so da** focused on management versus non-management ridiculousness, it's like being in 1880...but anyway) and the country will lose.
In most countries, railroads, like highways are government owned. So they can do things like build a commuter railroad system alongside freight tracks in a busy city with no issues. Or enhance a line because strategically, it will attract business in the future, even though right now, it may seem lackluster.
Not to mention, since land is the most important asset of the railroads, these countries can easily build high speed corridors in the existing right of way, or make that right of way a little bigger then build a new line.
Here in our country, UPRR actively undermines the high speed rail line in California and takes years (that's a fact) to even approve a highway overpass. By the way, UP fired all of the people that used to review other entities' plans to cross our tracks and is now happily paying even more to slower consultants to do that.
While the Chinese have built the world's longest high speed rail network in the last 10 years, and literally moved mountains to upgrade their freight network we can't even build Brazos Yard. Just think about this one example. The People's Republic of China built a line thousands of miles long all the way to Tibet, with long term strategic thinking in mind...and we can't even build one new hump yard in Texas. A hump yard which is a drop in the bucket compared to the stuff being built overseas, and we can't even build that...
Our system is a joke folks...and the joke is on us.