(The following story by Mark Young appeared on The North Platte Telegraph website on November 14.)
NORTH PLATTE, Neb. — Union Pacific Railroad is certainly feeling the effects of the economic downturn, causing the company to cut back its workforce.
However, through the company’s “furlough” program, UP executives believe they can recover lost employees quickly when the economy strengthens again.
According to Mark Davis, director of corporate relations and media for the Northern Region, Union Pacific is experiencing some sharp drops in traffic in most of their transportation areas. The exceptions are agricultural and energy products, such as coal, both of which saw increases.
Based on third quarter earnings for this year, Davis said agricultural traffic increased by 5 percent and energy products increased by 3 percent compared to 2007 third quarter earnings.
Chemical traffic, which Davis said included materials that are the building block for plastics and other related production items have dropped by 6 percent. Industrial traffic, which includes items such as steel and lumber for construction have dropped 3 percent while consumer goods have dropped by 9 percent.
The heaviest hit for Union Pacific has been automotive shipments, which are down by almost a quarter at 24 percent, as new car sales have dropped significantly across the nation.
The decrease in train traffic has led Union Pacific to make the difficult decision of cutting back their workforce; however, Davis believes Union Pacific has a system in place that protects the future of their employees thanks to a deal the company and the unions worked out a few years ago to address this type of economic crisis.
The company established a furlough system, which is basically a layoff, but the program continues to allow employees to work minimal hours and keeps their health benefits in place.
“The key part of this program is that the employees don’t leave,” said Davis. “We need our employees and as the economy gets better, we bring them back to fulltime. The benefits are probably the most important part to their families and in this program, they are able to maintain those benefits.”
Davis said that across the UPRR system, 738 employees have either been furloughed or let go, but that the majority of them remain in the furlough system. Throughout the North Platte area, there have been 111 UPRR employees furloughed and only three who were not placed into the program.
While the program allows minimal work and benefits, these families are still victims of tough economic times, but at least, Davis said, their jobs are there and ready when the economy turns back around.
“We don’t know what’s going to happen with the economy,” he said. “Like everyone else, we have to make decisions based on how well the economy is doing. Our employees are sticking with us even though it is difficult for them right now and that’s really the key part of this program that was worked out between the company and the unions.”
There have been rumors circulating that more layoffs – or furloughs – are in store for UPRR employees. Davis said there was no way to know for sure, at this time whether further furloughs will be needed. He instead looks forward to an economic recovery and getting all of the company’s employees back to work.
“We’re ready as soon as the economy comes back and we’ll have our employees back ready to handle the increased traffic that will return,” he said. “North Platte obviously plays a huge role in that for our entire railroad.”