Record profits, but UP opposes PTC costs
On the same day (Jan. 20) Union Pacific reported record fourth quarter and record calendar year 2010 profits, UP Chairman Jim Young said he is headed to Washington to meet with President Obama’s economic advisers to oppose a congressional mandate that railroads implement crash-avoidance positive train control by year-end 2015.
UP told investors its 2010 fourth quarter earnings had soared by 31 percent from the same quarter in 2009, and that its calendar year 2010 profit rose by 47 percent to a record $2.8 billion.
Twice during 2010, Union Pacific raised its common stock dividend, raising the dividend by 40 percent in 2010. Since 2001, the Union Pacific common stock dividend rate has been raised by 280 percent, for an average of 28 percent annually.
Young called 2010 the “most profitable year in Union Pacific’s nearly 150-year history.
“Economic indicators point to growth [in 2011], and if jobs improve, there will be even greater strength,” said Young, according to progressiverailroading.com. “The bar is raised, and last year the floor was set. We’re setting our sights even higher.”
UP repeated a previous announcement that it will increase its workforce by more than 4,000 in 2011 — an increase of almost 10 percent in its workforce — while bringing back the remainder of furloughed workers.
As for the Washington trip, in which Young said he will be joined by executives from other railroads, the Journal of Commerce reported that Young “strongly complained about the heavy expense of developing and deploying positive train control technology, which means outfitting locomotives with automated braking gear and tying it into trackside warning devices and other remote control systems.”
The railroads’ opposition to PTC — that its costs outweigh benefits — is disputed by independent studies, some commissioned by the Federal Railroad Administration.
The National Transportation Safety Board has long advocated implementation of PTC as a necessary safety overlay. The UTU and other rail labor organizations similarly support implementation of PTC.