(The following article by Paul Beebe was posted on the Salt Lake Tribune website on May 4.)
SALT LAKE CITY — Union Pacific Corp., the nation’s largest railroad, will hire 5,000 employees this year as it works to meet rising demand for rail shipments and to make up for the expected turnover of half its workforce by 2013.
Hiring will take place across the entire UP system, CEO Jim Young said Thursday at UP’s annual shareholders meeting in Salt Lake City. The system covers the western half of the nation, including Utah, where about 1,700 people work for the Omaha, Neb.-based company.
“Our hiring is really across our whole system, and it’s not only where you think traditionally of train and engine crews, conductors [and] engineers. It’s really across the board, in all of our ranks,” said Young, who answered a shareholder’s question about hiring. “If you know anybody who wants to work for Union Pacific, refer them over to us.”
UP employs nearly 50,000 people, and the company has signed up more than 13,000 employees in the past two years as it hires for growth and to offset attrition. That figure will reach 20,000 by the end of this year, Chairman Richard Davidson said.
“That’s just a huge number,” Davidson said.
The reason: After years of little or no growth, the railroad industry is surging with new demand. As recently as early 2005, some analysts were questioning whether the new demand was sustainable.
“Today, we believe that it is,” Young said.
The resurgence can be traced to several factors, including growth in imports from Asia to western U.S. ports, truck driver shortages and a strong appetite for energy that is driving fuel prices to record levels. At the same time, UP is investing in sophisticated freight locomotives that are three times as fuel-efficient as over-the-road trucks.
“In fact, in the first quarter, we handled a record volume [of freight] without an increase in fuel consumption,” Young said.
Wall Street apparently is paying attention. UP shares are up 46 percent in the past 12 months, closing Thursday at $93.50.
“Investors are excited about the long-term fundamentals of the rail industry. They see strong demand and improving yields, as well as additional efficiency gains that will drive further earnings improvements,” Young said.
Last month, UP reported that its net income soared in the first quarter to $311 million, an increase of 143 percent on record revenue growth over the same quarter of last year.
The company earned $1.15 per share, beating the estimates of analysts who expected UP to rake in $1.07 per share.
On Thursday, Young said revenue over the four quarters of this year is expected to increase “12 percent plus.” Earnings per share are expected to range from $5 to $5.50 a share. If earnings come in at the high end, they would be 50 percent higher than in 2005.
In other business in Salt Lake City, shareholders approved a proposal by the Sheet Metal Workers’ National Pension Fund to elect directors by a majority of votes cast during annual shareholder meetings.
The proposal had been opposed by directors, who are are elected by plurality vote.
Spencer Eccles, former chairman of Wells Fargo’s intermountain banking region in Salt Lake, retired from UP’s board after 30 years.