Rails boost spending, hiring, dividends
Railroads, enjoying record profits, say they will invest $12 billion in improving their track and operations in 2011, a significant increase over the $10.7 billion spent on capital improvements in 2010.
Additionally, the railroads say they will hire some 10,000 employees in 2011 — and more than 70,000 new workers over the next five years — but many will be to replace those retiring. Specific figures by railroad, or as to new hires versus replacement workers, were not provided by the Association of American Railroads (AAR), which made the announcement on capital spending and hiring March 9.
More than half of the $12 billion in new capital investment, or almost $7 billion total, will be spent together by BNSF and Union Pacific, while CSX and NS combined will invest about $3.7 billion in 2011. No figure was provided for Kansas City Southern.
Canadian National and Canadian Pacific are expected to invest near $3 billion combined beyond the $12 billion total of BNSF, CSX, Kansas City Southern, Norfolk Southern and Union Pacific.
Meanwhile, Bloomberg financial news reports that BNSF, which is privately held and no longer reports its earnings, has paid sole owner Berkshire Hathaway $2.25 billion in dividends since Berkshire acquired BNSF 13 months ago. Bloomberg said the dividends recently paid by BNSF are “nearly three times” the BNSF dividends over a similar time period prior to its being taken private.
The publicly traded railroads also have ratcheted up their dividend payouts during the past year, reflecting the record 2010 profits of most.