On August 18 Chairman & CEO Dick Davidson announced a major reorganisation of Union Pacific’s rail operations. This reverses a centralisation plan adopted more than 10 years ago, since when the acquisition of three railways has doubled UP’s size and made it unwieldy. ’We’re trying to flip the pyramid’, said Davidson. ’We thought our centralised system would work, but it turned out to be too complex ... we want people in Omaha supporting the people in the field.’
Under the restructuring due to be completed by November 1, three operating regions - Northern, Southern and Western - will each be headed by a vice president with local autonomy. However, planning and oversight will continue to be based in Omaha, where a new Network Design & Integration organisation was unveiled on September 1. NDI is designed to bring together the responsibility for service decisions, transport planning and resource allocation. ’NDI will develop the game plan, marketing will win the business and operating will execute the plan’, explained Davidson. ’It will be a well-balanced team effort, which should assure customers, employees and shareholders that we are extremely serious about a strategic transformation.’
UP has also reversed its network downsizing strategy in favour of retaining strategic routes against future traffic growth. On August 24 UP released a letter to the Surface Transportation Board stating that it had decided not to abandon SP’s 278 km Tennessee Pass line in Colorado, which closed last year. The mountainous route will now be mothballed. Also to be retained is the ex-SP Modoc Line linking southern Oregon and western Nevada. UP spokesman John Bromley insisted ’it would be foolish to tear them up, and regret it later.’
On August 19 UP reached agreement to buy back the 172 km Northeast Kansas & Missouri Railroad from Upland, Kansas, to St Joseph, Missouri, which was sold to RailTex in February 1990. UP plans to use the line to handle northbound empty coal trains returning to the Powder River Basin. o
