Monday, May 27, 2024
HomemidwestNew Union Pacific CEO prioritizes safety and efficiency over sweeping cost cuts

New Union Pacific CEO prioritizes safety and efficiency over sweeping cost cuts

Union Pacific’s new CEO, who came into the job last month with a reputation for cost-cutting, says he won’t shy away from that but no one should expect the kind of sweeping changes he made when he first oversaw the railroad’s operations a few years ago.

Jim Vena told investors Tuesday in some of his first public comments since he became CEO Aug. 14 that he’s focused on improving safety and service at the railroad. While he’s willing to invest in that, mostly he wants to make sure Union Pacific’s day-to-day operations are steadily improving.

“When you’re operating the railroad, you don’t make one big mistake normally and you cause yourself to impact the system and you slow down and then you can’t provide the service,” Vena said. “What happens is you make a lot of small mistakes, and if you make small mistakes, they come back all of a sudden add up and you wake up one day and you go, Wow! So that’s what I want to make sure that we’re on top of.”

Initially, that means Vena is looking closely over the shoulder of Union Pacific’s chief operating officer, the job that Vena previously held at the railroad in 2019 and 2020. He’s also working to speed up decision making at the railroad to help make Union Pacific more responsive to customers. Vena was hired after a hedge fund that was disappointed in the results under previous CEO Lance Fritz put pressure on UP.

Vena said he’s not changing from the lean operating principles he honed during four decades at Canadian National railroad, so more cuts are likely coming. But he said they won’t be as drastic as in his first tenure because Union Pacific already made most of the big moves when it first adopted the “precision scheduled railroading” model and slashed thousands of jobs and shut down a number of railyards across its 23-state network in the West.

Railroad safety has been in the spotlight this year ever since a Norfolk Southern train derailed and caught fire in eastern Ohio back in February. That crash prompted temporary evacuations, calls for reforms and months of cleanup that still isn’t complete. It also left the people who live near East Palestine with many lingering health worries.

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