UP Breakdown

[philg]

[left]The ongoing blundering by the UPRR management has had a recent culmination in the form of the UP giving up business like most the UPS contract which they had to give to the trucks or BNSF, several chemical contracts in Texas and many container agreements out of Long Beach. My contacts also indicate they are in danger of or Ford has given a portion of their traffic into So. California to BNSF and having GM VERY iritated. When the GM contract went to UP, my sources indicated that the UP had underbid the contract in general to a point where there was no profit, likely just to get the business. I know they then laygaged adding capacity to the Mira Loma auto depot for 2 years likely more. Now they have trains backed up to Yuma, AZ and beyond. Why? "Now that we have it, what doi we do?"
They've also been lally gagging completing double tracking across the Sunset Route. Meanwhile, the stockholders are getting a pretty good return on their investment, that I for one, would rather see put into the big picture which is the future. Oh, don't forget Mr. Davidson getting a 7 figure raise and 11 million bonus. FOR WHAT? He and his management (if that's you want to call them) have NO Clue and should get their pick slips! I think the terminology is "penny wise and pound foolish". And howabout the 6 trains a day on the tracks between Yermo, CA (Barstow, CA) and Salt Lake City. Why not use that as a (mostly) one way east for empties, especially auto racks. Oh DAAAH! They likely never thought about that.
In addition, they give Amtrak a red "neck" to the point the Sunset has been reduced to a milk run coming into LAX 12 + hours late, when UP "could" expidite Amtrak and get bonus money instead of paying out fines.
On the positive side: BNSF is the benifactor of the UP screwups. BNSF will likely charge more for expidited service which one would expect, but aren't they in business to make money? To wit, TRIPLE TRACK is being installed from LA to Riverside (CA) in place of double track that now exists and will soon begin installing the third track in the Cajon Pass. I think that's called "plan ahead" for increased capacity.
OH! Do you think the UP could get one of Mr. Davidson's "crew" to get off their "desk chair" and supervise getting a couple of locomotives washed? A clean locomotive is the best advertisement of a well run railroad". Someone said that. If the outside is dirty, what's the inside of the prime mover look like? I saw a brand new loco they other day that looked like it ran through a mud pit. Maybe it did! I think it's their East LA yard.
What do our Forum dwellers think?

[Anonymous]

I have to agree with you 100%.
BNSF railfan.

[bnsfkline]

ranter

[Anonymous]

............ranter?????????

[philg]

One responder would appear to have a high degree of interest in railroads in general. Therefore, they must have an opinion, in regard to the subject, other than your last response. What do we think? Speak up or they think we're ok with their conduct.
Would my submittion be in the catagory "to talk or say in a loud, wild extravagant way"? Maybe! Maybe someone at the UP will pay attention or-- NOT. But at least you know where we stand.

[Anonymous]

QUOTE: Originally posted by philg


[left]The ongoing blundering by the UPRR management has had a recent culmination in the form of the UP giving up business like most the UPS contract which they had to give to the trucks or BNSF, several chemical contracts in Texas and many container agreements out of Long Beach. My contacts also indicate they are in danger of or Ford has given a portion of their traffic into So. California to BNSF and having GM VERY iritated. When the GM contract went to UP, my sources indicated that the UP had underbid the contract in general to a point where there was no profit, likely just to get the business. I know they then laygaged adding capacity to the Mira Loma auto depot for 2 years likely more. Now they have trains backed up to Yuma, AZ and beyond. Why? "Now that we have it, what doi we do?"
They've also been lally gagging completing double tracking across the Sunset Route. Meanwhile, the stockholders are getting a pretty good return on their investment, that I for one, would rather see put into the big picture which is the future. Oh, don't forget Mr. Davidson getting a 7 figure raise and 11 million bonus. FOR WHAT? He and his management (if that's you want to call them) have NO Clue and should get their pick slips! I think the terminology is "penny wise and pound foolish". And howabout the 6 trains a day on the tracks between Yermo, CA (Barstow, CA) and Salt Lake City. Why not use that as a (mostly) one way east for empties, especially auto racks. Oh DAAAH! They likely never thought about that.
In addition, they give Amtrak a red "neck" to the point the Sunset has been reduced to a milk run coming into LAX 12 + hours late, when UP "could" expidite Amtrak and get bonus money instead of paying out fines.
On the positive side: BNSF is the benifactor of the UP screwups. BNSF will likely charge more for expidited service which one would expect, but aren't they in business to make money? To wit, TRIPLE TRACK is being installed from LA to Riverside (CA) in place of double track that now exists and will soon begin installing the third track in the Cajon Pass. I think that's called "plan ahead" for increased capacity.
OH! Do you think the UP could get one of Mr. Davidson's "crew" to get off their "desk chair" and supervise getting a couple of locomotives washed? A clean locomotive is the best advertisement of a well run railroad". Someone said that. If the outside is dirty, what's the inside of the prime mover look like? I saw a brand new loco they other day that looked like it ran through a mud pit. Maybe it did! I think it's their East LA yard.
What do our Forum dwellers think?

As for ***'s raise and bonus, the shortsightedness in infastructure, and stockholders return, I would imagine them to be as intertwined as anyother snakepit, and is a symptom of of a major weakness in the wallstreet oriented american business system.

CEO's are forced to have their performance judged based upon the quarter ahead and the quarter behind.

If you're like me you've seen dozens of companies that made their name selling first rate products redefine their mission statements and are now producing products that are barely adequate.

Of course, the railroads are foolish playing this game as it is their fixed plant that rots away first, not consumer confidence, that comes later

[UPTRAIN]

Most prime movers are greasy and oily on the inside, I've yet to see a spotless one!!!!

[Anonymous]

Phil-

UP is not necessarily a paragon of corporate virtue, however, you strike me as someone who thinks they have all the answers. I can assure you that you don't. Anything that appears obvious to you is probably equally obvious to UP management and there are likely a dozen reasons they won't work. For example, your idea of using the route through Salt Lake City as an eastbound route for empties may have one or many problems such as labor agreements, inadequate numbers of crews to move trains, congestion on other connecting lines or any one or more of many issues. It is always easier to be the armchair quarterback than to sit in the seat.

LC

[jeffhergert]

This may come as a shock to some, but business, especially the big ones are run for the benefit of the big institutional investors and senior management. One takes care of the other. To them, long term is the end of the next quarter.
Since I work for the UP, I see some of the questionable decisions that are made. They do a lot that hurts them in the long run. I don't understand undercutting the BNSF to get business but they do it. Maybe it made sense at the time when traffic was down, but now it haunts them when traffic is up. Selling their trucking subsidiary for less than they paid for it and spinning it into a profit then using some of the proceeds for bonuses. Yes, a lot could be done differently.
However, I also see them doing improvements. Every summer there is a major track project going on where I work. Some is just to keep up routine maintenance like new rail or wood ties. Others are upgrading to concrete ties, CTC extensions, a new interchange with a short line that receives coal and grain trains reducing the time the main line is tied up. I can't say what's going on elsewhere on the system, but I'd bet there is a lot of the same going on. Last year it was said that the UP couldn't buy all the wood ties it wanted. Yes sir, that sounds like a company that doesn't put money back into the property.
They still maintain 2 steam engines and a few historic diesels plus a business car fleet. Maybe they should scrap these so they can concentrate on the freight business. Would that make anyone happy?
To me, a lot of this UP hostility comes from them merging someone's favorite railroad. Sorry, but the SP was doomed for various reasons. If it hadn't gone to the UP, it would still be a fallen flag today. And 100 years ago the UP and SP were under the same management. The CNW was kept alive by the UP for at least 20 years. It was inevitable that some day it would be UP property. The MP, well who do you think's running the show. It ain't original UP management.
Or maybe it's their trade mark royaltly requirement. For the record, I too think it's dumb. Will cost more to litigate than they'll ever see in royalty payments. Still, they are within the law to do this. When a country produces more lawyers than it needs, this is what happens.
The UP is not perfect, but it's still running and will be probably as long as there are railroads.

[kenneo]

It's not going to make any difference what we think. What is going to matter is when the stockholders pull thier collective head out of the sand that reads ROI and understands that management has run the property into the ground. Then, a buyout firm will purchase the remains and sell it off in pieces. You'ss see the KCS in the far west, NS in Seattle and CSX in Los Angeles -- or perhaps, the West Coast and Eastern owned by Cedar American.

[UPTRAIN]

Most railroads that UP bought were dieing railroads, UP bailed them out, dusted them off and ran them right. I don't remember one that UP said, "hey, let's go buy some railroads just to **** people off!" Give em a break already.

[Randy Stahl]

I've said it before UP s problems are not unique to the UP , All of the class ones suffer the same.
Randy

[Anonymous]

There is a trend in american business of companies buying out failing companies to assume their debt and then using that as a tax write-off by subtracting "lost" income from their balance sheets. This is similar to what happened at Enron.

[Anonymous]

I also firmly believe taxes are the reason companies are moving to other countries. The common complaint is that cheap labor is the reason. Are taxes too high? Probably not, but this is just another way to cut a corner and keep the balance sheet looking good to investors.

[Anonymous]

QUOTE: Originally posted by jruppert

I also firmly believe taxes are the reason companies are moving to other countries. The common complaint is that cheap labor is the reason. Are taxes too high? Probably not, but this is just another way to cut a corner and keep the balance sheet looking good to investors.

LOL! Is UP pulling up spike and moving to china now?

[Anonymous]

Maybe not. But who buys stock in large american companies?
- Foreign conglomerates.

[Anonymous]

QUOTE: Originally posted by jruppert

Maybe not. But who buys stock in large american companies?
- Foreign conglomerates.

Then they REALLY tend to tighten the old screws,,, Like when Kone bought Montgomery elevator or Tyco bought Simplex, Grinnell, and ADT.

Granted, it's not good to see all that cashflow going overseas, but it doesn't bother me as much as seeing all the manufacturing jobs sweeping to foreign continents.

I mean a "sit on your duff all day and clip dividend coupons" stockholder is a "sit on your duff all day and clip dividend coupons" stockholder. where ever they are. Unfortunately the days where the owner of a company had pride in the products produced because they had his name on them are almost gone.

[Anonymous]

Sad but true, so true. There are so many ways to point the finger, to write them all would be a waste of time. All I can say is that every day I try to do my part.

[Anonymous]

This seems to be another Penn Central in the making at Union Pacific. Instead of the Wall Street stooges they have in the executive suites now, what Union Pacific and the other railroads need are RAILROAD men and /or women running the carriers, not these Wall Street Stooges whose only focus is the bottom line, which , while important, is not the only item of importance to the railroads' survival. They seem to have forgotten that service and dependable service is all they have to sell. The Erie Lackawanna formed in October 17,1960 realized this from the get go, and Penn Central, stumbled badly in this respect from February 1, 1968 on to its collapse a little over two years later. The breakdown now taking place at Union Pacific has a hauntingly familiar ring to it. The Penn Central's service meltdowns were similar in nature though it was the incompatible computer systems that were a major cause of it. Union Pacific today is made up of railroads that do not seem to be all that compatible with each other, especially Southern Pacific, which, by nature of its construction, is largely a single track railroad, which is where a good part of the problem lies. Double tracking as much of the SP as possible would go a long way toward alleviating a number of the operational delays as would be having an adequate number of train and engine crews and maintenance of way personnel on hand to properly run the property and keep it in top operating condition. That is where Union Pacific and other railroads fall down badly. And it is all coming home to roost. Management listening to too many Wall Street bean counters who do not know what the heck they are talking about telling railroad management where to cut back. Cutting back on train operating and maintenance of way personnel is starting to bite UP and the other railroads on the *** and the growing frequency of train accidents, both between t rains and between trains and highway vehicles at road crossings, together with increasingly malfunctioning signal devices are all reflecting this. Not only that, but safety in operations at all railroads has been so badly compromised to the breaking point that people are getting killed on the job with greater frequency as a result, and regardless of how carefully they work, too. One remedy would be to g et rid of this remote control nonsense and get adequate crews on the trains. Two man crews are not always enough.

[Anonymous]

When the pressure on a steam engine exceeds a certain level, pop valves blow to reduce the pressure and to keep the boiler from exploding. UP's solution to the problem, however, is to reduce the size of the boiler!!!! As such, this breakdown represents no surprise.

Two scenario's come to mind and, undoubtedly, there are more. The rationalization of main line trackage such as the Modoc Line and trying to pass all traffic through Roseville was a really stupid move and failed strategy. It was an accident waiting to happen. The Modoc was the pop valve available to reduce Oregon congestion. But no more......

I also hear a lot about the need for a second main track on the Sunset Route. A pop valve that still exists is the Phoenix line west to Yuma. I believe it is still intact, albeit not used except for some small segments (someone correct me if I'm wrong). Why not resurrect this line as a second main line and initiate directional running? This would save millions in construction costs and would eliminate the installation of a second main track between Picacho and Wellton. It may not be the total solution to this serious problem, but at least for a few hundred miles, trains can move with a lot more freedom than they do now.

I've always said that wheels that don't move don't make money for the railroad. They have to be turning in order to make money. And it makes me sick to my stomach to see a railroad decline business and give it to their competitors. Ouch!!

UP's mismanagement and arrogance is amusing to watch. They have failed miserably which is why they had to drop the brilliant "We Can Handle It" trademark for nothing. All of this put together equals a not so proud chapter in the company history book.

[Anonymous]

I have to wonder how much of it is "chicken vs the egg"

Though I have never worked in railroading, I did work in management for 28 of the 20 years I wiorked for the same real estate company. And stood witness to managerial "misdirection" that takes place as a company grows, on several occassions.

It goes like this: you have a guy who can do his job well so you give him more to do, relying on "good ol Bob" to carry the ball for you Bob may be very good at what he does, middle management in this example, but after enough years of top management coming through, deciding "what else" he can or SHOULD be doing, you get to a point wher it's more than any one man cn do. If you complicate that with enough of the high powered executives from th top telling Bob "What ever you do, I don't EVER want to come through here again and see "this (new) portion of your job not done again" then Bob has to start shuffling priorities, and pretty soon Bob becomes more of an expert on the things that he safely can NOT get done, where he will be the only one who knows what isn't getting done, and his job becomes one of rushing around, putting out "fires"

I say this without knowing a darn thing about running a railroad simply because, for all the faults the "failing" railroads that ultimately came together under the UP flag, SP, CNW, Frisco, etc MANAGED to run a railroad for years longer as an on going entity before some genius decided that the holy grail was to merge, eliminate duplicity in function among the staff, and try to take advantage of the resulting numbers, yielding the current condition.

If you are establishing policy for large operation from a central location, you better be darn sure that policy "fits" the situation "all throughout the kingdom", if it doesn't because of unique local conditions,...you are sunk.

Sure, it's "all" just running a railroad, but one of the biggest benefits of 'decentralized' administration is flexibility, something that appears almost absent in the leviathon UP. All that "nasty flexibility" seems to be branded "waste" and cut out accordingly...

[Anonymous]

Whoops, forgot the closing metaphor,....When the chicken starts spiting the egg, it's not a pretty picture for either

[tree68]

Two thoughts:

AntiGates' comments reminded me of that old bastion of management - The Peter Principle. Just because a person is a great first level supervisor doesn't mean they will be a great middle manager... Very possibly too many people have been promoted beyond their level of competency.

Second - One reason jobs are going overseas is because the work gets done cheaper there. We are up against a classic chicken/egg problem here, and you can't point the finger at any one group. Just because I start with labor doesn't mean they are to blame. Thus: Worker wants more pay to meet increased expenses/improve standard of living. Worker gets more pay. Employer raises prices to cover increase of costs. Worker wants more pay to meet increased expenses. Worker gets more pay. Employer raises prices to cover increase of costs.Worker wants more pay to meet increased expenses. Worker gets more pay. Employer raises prices to cover increase of costs. And so it goes. It's far more complicated, but you get my drift.

[Anonymous]

That "Peters Principle" can be true all the way to the top, especially in the case of "absentee ownership" as we call stockownership.

When a guy is given more work to do, but gets his head chewed off for asking for more resources necessary to get it done, after awhile, an unhealthy pattern can get started where there is no choice but to start dropping work to tend priorities.

May not be the incompetance of the middle manager so much as the greed of the top to try and squeeze the unsqueezable

[Anonymous]

I think what larry described is inflation. Something that other countries represent to american business is more than just cheap labor. They also represent a complete lack of regulation, low or non-existent taxes, and (supported by our tax law) banks to put money tax free out of the reach of uncle sam.

But, this discussion is about the UP which like it or not is stuck right here in the U.S.A.. Maybe somewhere along the line, all of the "investments" designed to help employees (poeple) in the long run became "expenses" instead. I am always hearing how in europe business may be more tangled but run with an outlook of generations instead of quarters or years.

Maybe, because technology in the last hundred years has advanced so far so quickly, that as a society, we are constantly playing catchup, forcing us to become a culture of the short term. The guy out there pushing iron today is the same guy as a hundred years ago, the iron just lookes a little bit different. Since the time of cave men the basic problems of life have not changed.

[twhite]

I'm not anti-UP by any means (after all, Cecil B.deMille was able to make a pretty good movie about their early history) but being kind of new to this railroad merger game, I've got a few questions. When UP bought SP and inherited the Donner Pass route, all I heard was big speeches about how the route was going to be resuscitated and all the double track between Emigrant Gap and Truckee replaced, the tunnels on the original 1863-69 line widened and deepened for double-stacks. That was about ten years ago, I think. UP is still sending most of their former Overland freight via the Feather River canyon, which while very scenic for train-watchers and despite its easy 1% ruling grade, is single-track, curvy and VERY slow. Meanwhile, except for AMTRAK and non-container freights, the Donner Pass line is still limping along . And please don't tell me that it's because of a ruling 2.2% Eastward grade. Most new diesels could make hash out of that. Lord knows SP/s cab-forwards used to. My question is, WHAT HAPPENED? Is Donner Pass doomed to be the next Tennessee Pass? Lord, I HOPE not!

[espeefoamer]

QUOTE: Originally posted by Randy Stahl

I've said it before UP s problems are not unique to the UP , All of the class ones suffer the same.
Randy

I'll say this again: The railroads in America are getting too big to manage properly.They are on the edge of collapsing under thier own weight.

[Anonymous]

Big deal!

[Anonymous]

The Union Pacific is trying to right it self. True the may have faltered,but they are rectifying their mistakes[censored][censored]

[Anonymous]

I have to say first that I do not know much about the business of railroading, and I wish I knew more and maybe in time I will.

On the surface, it seems that with ever increasing focus on unit trains and container frieght, the major railroads have less time for smaller customers.

Maybe a solution would be to separate this type of business from the rest of rail service; a kind of privately run Amtrack for container traffic. This would be analogus to the breakup of Bell telephone, where the service provider is a separate business from the infrastructure owner.