Union Pacific says worker shortage cost it money
(The Star-Telegram posted the following article by Dan Piller on its website on January 22.)
FORT WORTH -- Union Pacific Railroad said Wednesday that its fourth-quarter results were hampered by a lack of enough workers, and it upped the number of workers it plans to hire in 2004 to as many as 3,200.
Chairman Dick Davidson said delays and other service problems cost the Omaha-based railroad up to $30 million from October through December. He said "the problem was pure and simple _ we didn't have enough people."
The carrier hired 2,400 workers last year, primarily for train crews, and expects to add another 3,200 this year to its 50,000 employees, spokesman John Bromley said.
As recently as October the company had estimated hiring between 2,000 and 3,000 workers in 2004.
"Most of the new hires will be train crew members," Bromley said. The hiring will come throughout Union Pacific's system, which covers the western half of the United States. Union Pacific has about 15,000 workers in Texas, of which 3,000 are in Tarrant County, most at the Centennial Yard west of downtown Fort Worth.
Union Pacific and other railroads have drastically cut employment in the past 50 years, down to 227,000 at the end of 2002 from 1.2 million in 1955 and 548,000 in 1975.
"Hiring new people can be difficult because of the lifestyle," said John Bentley of the Brotherhood of Locomotive Engineers and Trainmen of the worker shortage. Bentley noted that crew fatigue has been an increasing problem. "If you're on a train crew, you have to be on call 24 hours a day, seven days a week. Not everybody wants to do that."
Bentley said a change in railroad retirement law last year allowed workers to retire at age 60 after 30 years of service, causing an exodus from most carriers.
Davidson made his comments Wednesday as Union Pacific reported a 9.5 percent drop in fourth-quarter earnings from continuing operations, from $368 million in 2002, or $1.38 per share, to $333 million, or $1.28 per share last year. The 2002 fourth-quarter earnings were inflated by about $50 million by real estate sales.
For the year, Union Pacific earned $1.056 billion from continuing operations, down from $1.265 billion a year earlier. Per-share income from continuing operations fell from $4.78 in 2002 to $4.07 last year. During 2003, Union Pacific spun off its Overnite Transportation truck subsidiary in an initial public offering.
Davidson said that fourth-quarter carloadings, up 5 percent from the fourth quarter of 2002, "are a clear sign that the economy is improving." He noted a 13 percent increase in intermodal shipments and a 9 percent rise in industrial products during the last three months of 2003 compared with the previous year.
Against that, however, were diesel fuel prices that exceeded $1 per gallon, the highest in 20 years.
Thursday, January 22, 2004
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