OMAHA, Neb. — The head of the track workers’ union has warned federal regulators that Union Pacific aims to furlough up to 1,350 maintenance-of-way employees next month and will push the remainder of this year’s planned trackwork projects into 2024 as a cost-saving measure.
But the railroad says the move is nothing unusual. “This is a normal part of our capital planning process. Given the timing to post for the 2024 capital program bidding, we do not anticipate significant furloughs,” spokeswoman Kristen South says.
UP’s Engineering Department is running approximately $80 million over budget due to a combination of inflation and the impact of harsh weather on the railroad’s network this year, including a rare tropical storm that hit Southern California in August.
“Simply put, unforeseen, large-scale service interruptions greatly accelerated our spend through the first three quarters of the year,” Terrill Maxwell, the railroad’s general director of labor relations, wrote in an Oct. 13 email to leaders of the Brotherhood of Maintenance of Way Employes Division. “The need to balance the workforce was not readily apparent until very recently, thus leadership made the difficult decision to push a number of projects into 2024. It’s been about five years since we’ve had to cut gangs due to budget, so although many of our veteran employees have experienced this reality, it will be new to others. Although we have several open maintenance jobs on both the North and South, it’s conceivable we will have folks furloughed in December.”
The majority of the affected track and rail gangs will be abolished on Nov. 19. UP expects to re-post the jobs in mid-December with a start date of early January. “Most distribution teams will continue working, delivering material required for 2024 projects,” Maxwell wrote.
The furlough of 1,350 people – a total which UP now says is highly unlikely – would be a 16.7% cut to UP’s overall maintenance of way workforce, according to September employment data the railroad submitted to the Surface Transportation Board.
Pushing some track projects into 2024 comes amid what UP says is its highest capital spending in years.
“We continue to make record capital investments to increase capacity for our customers and harden the infrastructure across our 32,000-mile network,” Kenny Rocker, UP’s executive vice president of marketing and sales, wrote in an Oct. 27 customer update. “This year we plan to spend $3.7 billion, the highest we’ve seen in seven years. So far this year we have replaced three million railroad ties and over 400 miles of rail to keep the network running smooth.”
In the past four years, the average number of miles of track UP has resurfaced annually has declined by 10% compared to the average of the prior four years, according to data from the railroad’s annual reports. The decline is in line with the 9% drop in average annual gross ton-miles the railroad handled in each four-year period.
But UP replaced an average of 31.5% fewer miles of rail annually from 2019 to 2022 than it did from 2015 to 2018, according to the railroad’s data.
Tony Cardwell, president of the BMWED, claims that UP’s decision to postpone trackwork and furlough union members poses a safety risk.
“This drastic reduction in Maintenance of Way employees will only compromise the quality and frequency of inspections and necessary maintenance, thereby endangering the safety and reliability of our nation’s railroad infrastructure,” he wrote in an Oct. 27 letter to members of the STB.
Since adopting a Precision Scheduled Railroading operating model in October 2018, UP’s maintenance-of-way workforce has declined by 19.2%, according to STB data.
Cardwell wrote: “Union Pacific outright acknowledges that it is pushing projects into next year for fourth-quarter financial gain. In other words, Union Pacific intends to defer much-needed maintenance on its right of ways, tracks, buildings, and bridges for the sole purpose of showing a larger profit to its shareholders in the fourth quarter. As you are well aware, deferred maintenance will only lead to catastrophic outcomes.”
UP’s adjustments of its capital plan are normal at this time of year, Maqui Parkerson, vice president of labor relations at UP, wrote in an Oct. 30 letter to Cardwell that was posted on the STB website this week. The timing of potential furloughs comes at a time when track workers typically take vacations, Parkerson wrote.
“I am writing to correct your inaccurate assertions that Union Pacific’s current headcount levels are affecting safety on our railroad,” Parkerson wrote. “Most importantly, Union Pacific is committed to the safety of our operations. Our day-to-day work to maintain and inspect our railroad remains in place and will not be interrupted.”
Independent analyst Anthony B. Hatch says that while UP will be deferring seasonal trackwork projects for just a few weeks, “the optics are bad — not only for safety issues … but also given the STB’s focus on headcount and the opportunity UP has for a regulatory relationship reset.”
The STB has not yet responded to Cardwell’s letter. The Federal Railroad Administration, which oversees rail safety, is aware of the planned furlough and will be monitoring its impact on safety.
Note: Updated at 1 p.m. Central on Nov. 2 with comment from UP Vice President of Labor Relations Maqui Parkerson.
Share this article
