(The following appeared on the Great Falls Tribune website on December 14.)
Burlington Northern Santa Fe President Matt Rose says the global economic slowdown will impact the railroad company in 2009, but just what that impact will be is unclear.
“We had good growth in 2008 and we’d rather continue to be in a high growth position,” said Rose when he was in Great Falls Tuesday. “We’ve been in a recession for 10 months, according to the experts, and our company has been doing well. Now it’s all about the future and there is uncertainty about what’s to come in 2009.”
Burlington Northern Santa Fe, which trades on the New York Stock Exchange under the symbol BNI, reported third quarter earnings of $2 per diluted share. That compares with third-quarter 2007 earnings of $1.48 per diluted share.
Freight revenues increased $818 million, or 21 percent, to $4.77 billion compared with the third quarter of 2007, and included higher fuel surcharges of approximately $570 million.
At the end of November, BNSF stock was down 8 percent for 2008, compared with a loss of 40 percent for the broader S&P 500 Index.
“Long term, our industry is in a great position, as companies look for more fuel-efficient ways to move their products,” Rose said. “But right now, we are in a normal downturn process. That means we’ll have to hold capital projects and jobs.”
Rose said the company, which has been on a hiring upswing in anticipation of waves of attrition due to the anticipated retirement of longtime workers, hopes to avoid layoffs.
“We’ve always had furloughs in certain crafts, such as maintenance, due to the seasonality of our demand, but we really hope not to have layoffs,” Rose said. “First, it’s devastating to the people who lose their jobs, and it also costs the company money.”