(The following story by Jack Naudi appeared on the St. Louis Post-Dispatch website on March 13.)
ST. LOUIS — Union Pacific Railroad’s once-booming operation in downtown St. Louis will virtually shut down this year. The company announced Tuesday that it would transfer 1,038 jobs to Omaha, Neb.
The job shifts are scheduled to begin in May and continue through September, said a company spokeswoman. When it’s complete, only a dozen people will work at the Union Pacific building at 13th and Olive streets.
The job cuts mean St. Louis will lose about $60 million in payroll, according to Union Pacific estimates.
Richard Fleming, president of the St. Louis Regional Chamber & Growth Association, said the decision by Union Pacific to transfer virtually all remaining downtown jobs to a new corporate headquarters in Omaha was not surprising.
“We knew that the fundamental decision had been made by the corporation to consolidate everything back to Omaha,” Fleming said. Union Pacific was founded in Omaha in the 19th century.
Kathryn Blackwell, general director of corporate communications for Union Pacific, said it was uncertain how many employees would accept the transfers. But based on experience, she expected about 80 percent would move.
Most employees must make a decision by the end of the month, Blackwell said.
While a job transfer had been expected, the size of the move announced Tuesday by the company was not.
In June 2001, nearly 1,800 people worked at the downtown St. Louis operation when Union Pacific announced that 500 to 700 positions would be transferred to Omaha, mainly in customer service.
Among those expected to stay in St. Louis were about 300 information technology employees. But on Tuesday, Union Pacific announced those jobs also would be shifted to Omaha.
“As we got closer to the opening of our building, and we were looking at how many employees we can hold, we determined that it would be appropriate to move our technology professionals from St. Louis,” Blackwell said.
In addition, company officials now say they eliminated about 700 jobs over the last two years.
“We have been reducing head count on an ongoing basis, mainly through attrition and productivity improvements,” Blackwell said.
Employees who accept the transfer will work in Union Pacific’s new headquarters, a 19-story, 1.1 million-square-foot building in downtown Omaha that will open in May.
The building is the cornerstone of a redevelopment effort in that city. Nebraska offered Union Pacific two tax breaks, which vary based on the investment and employment level at the headquarters. If Union Pacific invests $260 million in the project, it could receive more than $80 million in tax reductions and credits.
“This is really a banner day for Omaha, the state of Nebraska and our company,” Union Pacific Chairman and President Dick Davidson said Tuesday.
Union Pacific officials said they never approached St. Louis or Missouri officials about a counterproposal. The company, Blackwell said, had no interest in pitting one community or state against another.
Union Pacific rebuffed efforts by the state and city in 2000 and 2001 to help preserve the St. Louis jobs.
“When they’re touting this as a big Omaha turnaround and there’s an incentive package that’s pretty substantial … it doesn’t take the sting out of people losing their jobs, but it at least puts into context that there’s some things you just can’t turn around,” Fleming said.
After the job transfers, Union Pacific still will have about 300 employees scattered throughout the metropolitan area in a variety of positions. Statewide, the railroad will have about 3,000 jobs, mostly in the Kansas City area. The company has 4,000 employees in Illinois. The railroad operates a large rail yard in Dupo.
Union Pacific’s St. Louis operations began in 1982 after it merged with Missouri Pacific Railroad, which was headquartered downtown. At the time, Missouri Pacific employed about 400 people in the St. Louis area. Union Pacific quickly began adding jobs by merging far-flung customer service and technology operations into the downtown St. Louis building.
(The Associated Press contributed to this report.)