Layoffs are affecting numerous Union Pacific workers in Pine Bluff as company officials say they are working to streamline operations through regional consolidations and cost-cutting measures in order to boost revenue.
Layoffs began in early February, according to a statement made by Union Pacific Senior Director for Corporate Communications and Media Relations Kristen South. However, Union Pacific would not give specific numbers for jobs lost in the Pine Bluff shop, which is expected to close.
“Union Pacific notified its mechanical employees that approximately 450 (nationwide) positions are being eliminated in early February,” South said.
“We are not providing location-specific information; however, I can confirm Pine Bluff was impacted and the shop there is closing. The workforce reduction is a result of a reduced locomotive fleet.”
While the railroad would not give specific numbers, local employees who spoke under the condition of anonymity provided a breakdown for jobs affected at the Pine Bluff shop. One employee said that the railroad has laid off 37 machinists, 16 electricians, 18 laborers and four foremen for a total of 75 employees to date.
The total staff remaining is currently at nine machinists, nine electricians, five foremen and no laborers.
Pine Bluff Mayor Shirley Washington issued a statement late Thursday afternoon addressing the layoffs.
“When I heard the news about Union Pacific’s restructuring, I immediately thought of the railroad workers and their families who call Pine Bluff home,” Washington said.
“My heart goes out to those hard-working employees who will have their lives disrupted by this announcement. I am committed to working with Union Pacific, our Chamber and Alliance and local workforce training services to ensure that Pine Bluff workers have access to every resource possible to keep their talents in our community.
“The railroad has always been the beating heart of Pine Bluff and has made our community a hub of commerce and transportation for our region. I believe that workers in Pine Bluff will show their value and help the railroad industry thrive once again. I am committed to invest in the future of our city and our workforce so that Pine Bluff will attract and retain good paying jobs to support families in our community.”
One employee blames the job cuts on greed.
“The worst part about all the layoffs is no one knows when or where they are coming or how many will be cut,” the employee said. “The company that once claimed to love and value their employees are cutting them at alarming rates and for what? Greed? Take a look at Union Pacific's fourth-quarter earnings in 2018. Record profits and record safety, yet they lay off? Why? How?”
Layoffs were first announced late last year, according to an article in the Casper, Wyoming, Star Tribune dated Nov. 6, 2018.
According to the article, Union Pacific removed 775 locomotives from its fleet by the end of 2018, despite reporting $1.6 billion in net earnings for 2018, which was a 33 percent jump from 2017’s earnings and the highest ever third quarter earnings in the history of the railroad.
Also according to the Star Tribune, the plan to cut costs by the railroad is called Unified Plan 2020. The strategy follows a plan immortalized by the late Hunter Harrison, who led the third-largest railroad carrier, CSX, until his death last year.
Under Harrison’s efficiency model, the volume of shipments fell slightly, the workforce was cut, and the railroad network was constrained to hubs where cars were reshuffled back into the network of rails.
The ratio of cost to revenue reached unheard of lows. In a profile on Harrison after his death, Fortune Magazine wrote that Harrison had created “a new paradigm for railroading in a new market.”
In an email dated October 16, 2018, UP officials said 475 positions would be eliminated by the end of 2019, as would 200 additional contract positions. The company is also reshuffling the organization nationally, consolidating its three regions into two and closing five service units.
“Workforce reductions are extremely difficult decisions to make because we recognize the impact they have on families, friends and co-workers,” the company wrote in a note to employees. “We are taking steps today to ensure Union Pacific remains a strong, competitive and vibrant company. These steps are part of reducing our general and administrative support structure by roughly 30 percent by 2020. We also will need to drive efficiencies in all other parts of the railroad.”
One local employee speaking under the condition of anonymity is concerned about rail safety with the rash of layoffs.
“Keep an eye on rail safety in the near future when the new business plan reaps its consequences of poor maintenance,” the worker said. “Shareholders don't die in derailments, and after all, that's who really matters, right?”
Another employee speaking under conditions of anonymity shared similar concern.
“The problem with this new PSR (Precision Scheduled Railroading) is that all they look at is the numbers,” the employee said. “Anywhere that isn’t putting up the numbers gets the ax. This makes a very dangerous environment even more unstable. Employees now feel the pressure to not do their job as thoroughly and more quickly just to not draw attention to themselves. In an industry that preaches safety and has never had a year where someone didn't die, this is very scary for the employees.”
White Hall Mayor Noel Foster said the layoffs won’t just affect Pine Bluff.
“This is very unfortunate. The railroad has been a fixture in Jefferson County for as long as I can remember,” Foster said. “No family wants to go through that. We have a lot of UP employees who live here in White Hall, so this is very unfortunate. I hate that for any family. Anytime someone gets laid off from gainful employment it is hard on a family.”
Foster said that he, Washington and Jefferson County Judge Gerald Robinson have to continue to work to bring jobs to the area.
“I know that Jefferson County, Pine Bluff and White Hall have a lot of good things going, so we have just got to keep bringing other jobs here so that the people who are here can have employment here,” Foster said.
“We don’t need families leaving our area for jobs. We have got to keep working to bring other jobs here. I think that Mayor Washington, Judge Robinson, and myself working with the Economic Development Alliance, we are working diligently trying to get more industries to locate here. It is a very difficult path, but I do know that everyone is working together to bring jobs here; hopefully, that will continue to happen so we can offset these types of losses when we lose jobs like the UP jobs.”