(Reuters circulated the following article by Nick Carey on February 22.)
CHICAGO — Union Pacific Corp., the No. 1 U.S. railroad, said on Thursday it has laid off 124 rail workers and placed 455 more on part-time work, citing slowdowns in the U.S. housing market and other sectors.
“There may be more (layoffs), but we don’t expect them to be widespread,” Kathryn Blackwell, Union Pacific’s assistant vice president for corporate communications, told Reuters.
CSX Corp., another major U.S. railroad, told Reuters it has laid off around 300 rail workers, due in part to seasonal business but also to softness in some parts of the U.S. economy.
Blackwell said all of the Union Pacific layoffs were in regions of the country where the company relies on construction-related business, chemicals or the Big Three domestic U.S. automakers in Detroit.
All of the major U.S. railroads have said over the past few months that they have been seeing a slowdown in freight volumes related to the construction business, plus some softness in industrial freight volumes and shipments of cars made by General Motors Corp., Ford Motor Co. and Chrysler, a unit of DaimlerChrysler AG.
These railroads have posted strong profits for 2006, even as the economy showed signs of slowing late in the year, escaping the weakness that has hurt a number of U.S. trucking companies.
The 455 Union Pacific workers who have not been laid off are required to work weekends and receive some pay and all of their benefits, Blackwell said. According to company information, the railroad employs more than 51,000 workers.
The layoffs have been conducted in line with union agreements whereby workers with seniority are protected.
The laid-off workers may be called back by Union Pacific but Blackwell said “that will all depend on when the economy picks up.”
Like the other major railroads, Union Pacific is expecting U.S. economic growth to speed up starting in the second half of this year.
Blackwell stressed that Union Pacific was still hiring in other areas of the country, in particular to offset attrition as older workers retire.
“The union agreement we have prevents us from relocating (laid off) workers to other areas where there might be jobs for them,” she said.
Omaha, Nebraska-based Union Pacific still plans to hire between 3,000 and 4,000 people this year, Blackwell said.
CSX spokesman Garrick Francis said the company has laid off around 300 workers since January because of lower seasonal demand and because of some slower businesses. CSX, based in Jacksonville, Florida, employs roughly 36,000 workers.
“We are offering some of those workers temporary relocation,” he said, adding the rest would keep all of their benefits for four months.
“We hope to be able to call those workers back in the spring,” Francis said.
Representatives of the other two major U.S. railroads _ Norfolk Southern Corp. (NSC.N: Quote, Profile , Research) and Burlington Northern Santa Fe Corp. (BNI.N: Quote, Profile , Research) did not immediately return calls to ask whether they had instituted any layoffs.
Union Pacific shares closed down 20 cents at $104.11 on Thursday, while CSX closed down 42 cents at $40.45.