OT - Railroad Industry Employee Crisis

ironeagle2006 · **Joined:** Tue Aug 22, 2017 11:27 am **Posts:** 142

There's a perfect storm brewing right now in the USA for a massive earthquake in the economy. We have a very low reserve in fuel supply right now. Certain areas in this nation are running with less than a week of diesel fuel in reserve. Then throw in the holiday season rush with higher fuel demand and prices. Then a possible strike in the railroads. If I were a logistics manager right now I would be buying malox by the gallon along with tums by the case. Oh yeah throw in a nationwide shortage of Def and for the ultimate kick in the butt effective Jan 1st California is stupidity banning about 25 percent of all OTR trucks from their state for being to old. The trucks they are banning haul about 70 percent of all meat and produce into and out of California.

PCook · **Joined:** Sat Jul 02, 2005 7:16 am **Posts:** 2127

OT - The entire world economy is like a sinking ship with no lifeboats and few effective life jackets, and we are all trapped on it. It did not hit an iceberg, it is sinking from rust and rot. The passengers are busy fighting over the crumbs of an economic pie baked in 1945. But there is an abundant supply of toilet paper, printed in pretty colors with currency denominations of all the bankrupt countries that issued it. When people experience difficulty getting food or fuel they may finally start to pay attention to the dire financial situation.

For a really interesting look at the government money printing the last couple years see the video "We're Freakin' Doomed" by Mike Maloney. He is a precious metals dealer, but this appears to be based on good information. It is a very interesting presentation done with the government's own charts and numbers:

https://www.youtube.com/watch?v=sKBGuyMMjzk

And keep in mind that in the last year or so the Social Security Administration has pushed the "Trust Fund Depleted" date of Social Security from 2041, back to 2039, and then 2037. When it is depleted they intend to fund the payments as general debt.

This is part of why the unions might need to go after a 30% annual raise just to stay even.

And everyone else is on a sinking ship with no lifeboats............

PC

Tacky3663 · **Joined:** Wed Jun 01, 2022 9:08 pm **Posts:** 39

Kinda restarting this thread, But what are you guys' thoughts on Lance Fritz resigning and shareholders pushing for Jim Vena at UP

mmi16 · **Joined:** Thu Oct 24, 2019 11:05 pm **Posts:** 198

Tacky3663 wrote:

Kinda restarting this thread, But what are you guys' thoughts on Lance Fritz resigning and shareholders pushing for Jim Vena at UP

What I have read was the Fritz was antagonistic toward employees.

I haven't heard anything that Vena is much better, though he would have to work at it to be worse.

Tacky3663 · **Joined:** Wed Jun 01, 2022 9:08 pm **Posts:** 39

mmi16 wrote:

Tacky3663 wrote:

Kinda restarting this thread, But what are you guys' thoughts on Lance Fritz resigning and shareholders pushing for Jim Vena at UP

What I have read was the Fritz was antagonistic toward employees.

I haven't heard anything that Vena is much better, though he would have to work at it to be worse.

Vena was one of the co-founders of PSR. If Fritz was antagonistic with employees. Vena will be even worse

EJ Berry · **Posted:** Tue Feb 28, 2023 4:28 pm

Where's E. H. Harriman now that we need him?

Phil Mulligan

PMC · **Joined:** Sat Oct 17, 2015 5:55 pm **Posts:** 2876

UP is Anschutz from A to Z, it looks like he has decided to double down on the cost cutting. I can still remember the "Phuck Phil" employee commentary on the sides of Rio Grande coal hoppers in the 1990s.

Howard P. · **Posted:** Tue Feb 28, 2023 5:51 pm

Watch for Blackmon Auctions to list a 4-8-4 and 4-8-8-4 later this year...... they sell a lot of surplus UP stuff.

Howard P.

Tacky3663 · **Joined:** Wed Jun 01, 2022 9:08 pm **Posts:** 39

Howard P. wrote:

Watch for Blackmon Auctions to list a 4-8-4 and 4-8-8-4 later this year...... they sell a lot of surplus UP stuff.

Howard P.

Think you mean watch for them to make a trip to Silvis in the near future

J3a-614 · **Posted:** Fri Mar 03, 2023 11:42 pm

I'm anticipating that some people of "conservative" leanings may come out defending "capitalism" like it's some sort of religion to them. As a corollary, they may take to calling anything critical of our system "socialism."

The problem is, our capitalist system has devolved, been dumbed down, to where it's about money and nothing but money. Employees, the public, and even customers are at best secondary considerations, or at worst are impediments to even more profits.

It wasn't always like that. Business owners, even of major corporations, pursued profit of course, and could even be quite aggressive about that, but they also saw themselves as builders, as citizens, and they took pride in that. That's why factory buildings were built of brick with the company name carved in stone, and sometimes also set into tiles in the bricks of the smokestacks they had. The owners expected to be around for a while.

Today you're lucky to see a plant made of tin, with a plastic sign. That sign's important, because the company itself isn't. The plant may have been built by ABC Co., then sold to hedge funder guys at XYZ Inc., and now is owned by PFFFTT, LLC, which has closed the plant and is moving everything to China.

Capitalism used to be symbolized by people like Andrew Carnegie, Thomas Edison, and Henry Ford. Today the more proper character is Henry Potter, the villain from "It's a Wonderful Life."

Our system just ain't what it used to be.

It's not just railroads, it's everything of any size.

Quote:

Nearly two decades before Boeing’s MCAS system crashed two of the plane-maker’s brand-new 737 MAX jets, Stan Sorscher knew his company’s increasingly toxic mode of operating would create a disaster of some kind. A long and proud “safety culture” was rapidly being replaced, he argued, with “a culture of financial bullshit, a culture of groupthink.” 

Sorscher, a physicist who’d worked at Boeing more than two decades and had led negotiations there for the engineers’ union, had become obsessed with management culture. He said he didn’t previously imagine Boeing’s brave new managerial caste creating a problem as dumb and glaringly obvious as MCAS (or the Maneuvering Characteristics Augmentation System, as a handful of software wizards had dubbed it). Mostly he worried about shriveling market share driving sales and head count into the ground, the things that keep post-industrial American labor leaders up at night. On some level, though, he saw it all coming; he even demonstrated how the costs of a grounded plane would dwarf the short-term savings achieved from the latest outsourcing binge in one of his reports that no one read back in 2002.*

Sorscher had spent the early aughts campaigning to preserve the company’s estimable engineering legacy. He had mountains of evidence to support his position, mostly acquired via Boeing’s 1997 acquisition of McDonnell Douglas, a dysfunctional firm with a dilapidated aircraft plant in Long Beach and a CEO who liked to use what he called the “Hollywood model” for dealing with engineers: Hire them for a few months when project deadlines are nigh, fire them when you need to make numbers. In 2000, Boeing’s engineers staged a 40-day strike over the McDonnell deal’s fallout; while they won major material concessions from management, they lost the culture war. They also inherited a notoriously dysfunctional product line from the corner-cutting market gurus at McDonnell.

And while Boeing’s engineers toiled to get McDonnell’s lemon planes into the sky, their own hopes of designing a new plane to compete with Airbus, Boeing’s only global market rival, were shriveling. Under the sway of all the naysayers who had called out the folly of the McDonnell deal, the board had adopted a hard-line “never again” posture toward ambitious new planes. Boeing’s leaders began crying “crocodile tears,” Sorscher claimed, about the development costs of 1995’s 777, even though some industry insiders estimate that it became the most profitable plane of all time. The premise behind this complaining was silly, Sorscher contended in PowerPoint presentations and a Harvard Business School-style case study on the topic. A return to the “problem-solving” culture and managerial structure of yore, he explained over and over again to anyone who would listen, was the only sensible way to generate shareholder value. But when he brought that message on the road, he rarely elicited much more than an eye roll. “I’m not buying it,” was a common response. Occasionally, though, someone in the audience was outright mean, like the Wall Street analyst who cut him off mid-sentence: 

“Look, I get it. What you’re telling me is that your business is different. That you’re special. Well, listen: Everybody thinks his business is different, because everybody is the same. Nobody. Is. Different.”

The article this is from, and another one from The Atlantic, are a bit lengthy, but worth reading.

https://newrepublic.com/article/154944/ ... revolution

https://www.theatlantic.com/ideas/archi ... gs/602188/

J3a-614 · **Posted:** Sat Mar 04, 2023 5:50 am

Another quote from that New Republic article worth reading--again.

Quote:

No one at Boeing really knew what had hit them after the McDonnell merger. Stan Sorscher was at a family reunion when he started putting the pieces together. He’d been talking (OK, ranting) to his Uncle Sidney, a gentle and brilliant man widely considered to possess the brightest mind to have ever emerged out of Flint, Michigan, about the depraved new managerial culture that had taken hold of his company, when Uncle Sidney cut him off, looked him straight in the eye, and, with a kind of precision and clarity Sorscher had only ever seen in “like, Nobel Prize-winning physicists,” told his nephew:   

You are in a mature industry that is no longer innovative; it’s a commodity business. The last great innovation capable of driving major growth in aviation was the jet engine back in the 1950s, and every technological advance since has been incremental. And so the emphasis of the business is going to switch away from engineering and toward supply-chain management. Because every mature company has to isolate which parts of its business add value, and delegate the more commoditylike things to the supply chain. The more you look to the market for pricing signals, the more the role of the engineer will shrink. 

 Sidney Davidson was a pioneering University of Chicago accounting professor who viewed his profession, in the words of one of his textbook titles, as “the language of business.” And while he was wrong, Sorscher knew, about airplane manufacturing, his glib analysis was compelling in large part because fin de siècle Boeing was being devoured by the trendy accounting standards of the day. The new model for measuring long-term profitability in corporate America had boldly eclipsed the old Warren Buffett-style metrics like earnings and operating margins. Companies with traditional earnings fell out of favor—now, businesses that weren’t overcapitalized tech start-ups clamored to position themselves as turnaround stories. Boeing was telling its own version of this story, with the aid of another Stonecipher initiative that naysayers dubbed “the cult of RONA,” or return on net assets

My own take on things--

In the land of opportunity, opportunity is running out.

It's running out because we are dealing with both a technically mature economy and what is probably a super saturated economy.

Let's tackle the technical side first.

Who among us would think it was a good idea to build another car, in particular another gasoline or diesel car? In particular, in view of the huge investment that would have to be made in designing and building and testing prototypes, and then the plant to build the new cars in quantity, could you offer something better than what's already available from Ford, Chrysler, GM, Toyota, Mercedes-Benz, Audi, Volkswagen, Nissan, Kia, and all the rest?

Could you build something more fuel efficient? Could you build something safer, overall better, than anything from anybody else, better enough to be competitive?

And even if you did, would it be enough? Would it improve the driving experience enough?

One thing that used to be a big selling point for cars was that they got you places faster than a trolley or bus. Well, today you can buy a Corvette or other road rocket that can launch you into high speed rail velocity and cruise at it all day long (though you're going to have to stop for gas really often). But can you use all that speed?

In reality, when you get on the highway, you will either get stuck in traffic with everyone else, or, if you do have something resembling an open road, you'll likely draw unwanted attention from the Highway Patrol.

Quote:

You know, I imagine back in 1953 when this car came out, and you bought one, you thought, "Well, cars can't get much better than this." You've got three speed with overdrive, it's smooth, it's powerful, it handles nice, it's got a heater, it's got a radio--I mean, was--eh, this is living the American dream--Jay Leno regarding a 1953 Hudson Hornet

Source (and a cool video, at least I think so!):

https://www.youtube.com/watch?v=-J-wuKfp-Pk

Expanding roads doesn't seem to work too good anymore, either. Bigger roads seem to make for bigger traffic jams, and even in open country, you aren't getting anywhere faster than you did when the first parts of the Interstate system opened back in the 1950s.

We should have listened to General Electric instead of General Motors:

https://www.youtube.com/watch?v=x6dltiZMlaU

More thoughts on some things--

One of the things a lot of returning veterans did in the postwar era was to go into business for themselves. Many of these businesses were diners, roadside restaurants, an icon from the "goodle days" of the 1950s, or more properly, the whole period between the end of WW II and the Cuban Missile Crisis and the assassination of John F. Kennedy.

Our population has multiplied to almost triple what it was then, and that would suggest we should have a lot of roadside places like that now, and we do--but they all are named McDonald's and Waffle House.

I can remember independent grocery stores; a next door neighbor and his brothers ran one just up the street from my house when I was a kid. There were at least two others nearby, and an A&P Supermarket, too (my dad worked there, by the way.)

(And how many of us recall A&P, officially The Great Atlantic and Pacific Tea Company, with roots going back to before the Civil War?)

https://en.wikipedia.org/wiki/A%26P

All are gone now.

Where I currently live, there are very few independent grocery stores. All are parts of chains (Wal Mart, Aldi's, Martins, Food Lion, etc.). The few independents that are around are in some kind of backwater places, like at a crossroads community about six miles from me, but which feels much further off, (it has one corner grocery, a couple of churches, a post office, and perhaps 30 houses) Another is a former convenience store at trailer park on a former main road that was bypassed some years ago with a four lane highway, and a third is another little crossroads place that is even smaller than the first one mentioned. All are in places where the big corporations don't think it's worth going to.

When you look at things through this lens, it makes sense that corporations, in particular those run by these funds, would act this way. It's logical if money is your only goal.

Really, think of how hard it is for a railroad to compete these days with subsidized roads and a public that thinks your industry has been obsolete and is even government subsidized when it isn't? Wouldn't this seem like a part of an economy with limited, even shrinking opportunity? Wouldn't it make sense to go out of business while taking as much out of the business as you can before you fold up?

Doesn't this look a lot like what we are seeing in the railroad industry, and others was well?

Stationary Engineer · **Joined:** Thu Dec 12, 2013 1:26 pm **Posts:** 258

There is an interesting column in the April issue of Trains by Bill Stephens, entitled "Union Pacific has lost its way." He lays blame right away on UP's goal of an operating ratio of 55%. He relates, as an example of that goal, that the Sunset Limited is Amtrak's worse performing long distance train. Amtrak claims that the reason for its poor on-time performance, is the fact that UP runs trains that are longer than the length of the sidings.

I blame the almost unattainable goal (in my opinion) of 55% O.R. on Wall Street. They demand ever higher returns each year and corporations demand ever more cost savings from their managers every year. Which means, even lower head counts. I read that an investor group owning just one percent of UP's stock, forced Fritz out.

Kelly Anderson · **Joined:** Tue Sep 14, 2004 7:52 am **Posts:** 2477

J3a-614 wrote:

The problem is, our capitalist system has devolved, been dumbed down, to where it's about money and nothing but money. Employees, the public, and even customers are at best secondary considerations, or at worst are impediments to even more profits.

America has entered a new era of Robber Barons, it's as simple as that.

co614 · **Posted:** Mon Mar 06, 2023 10:23 am

I was disappointed not to know any of the Robber Barons listed at the bottom of that Wikipedia page.

Interesting page...well worth reading. Ross Rowland

J3a-614 · **Posted:** Mon Mar 06, 2023 12:42 pm

First, I appreciate that, so far, the corporate defenders are not commenting; I'd like to hope they are considering what I have had to say with some seriousness!

Anyway, one thing my mom taught me was that I shouldn't criticize too much unless I had an alternative to propose.

As noted, a lot of this is at least partially due to the corporation model. Corporations actually go back to Colonial days; The East India Tea Company was one such firm (and in a way a predecessor of today's multinationals). Some of the 13 Colonies were also privately incorporated; essentially they were real estate development projects.

Frankly, I think corporations are undemocratic. Think of how voting takes place in one, with stock. Would a stockholder with 10,000 shares be ten times smarter, ten times a better person than a stockholder with only 1,000 shares? If not, why do we give him or her ten times the voting rights?

It's a classic case of "Might makes right." We know that's often not a good approach.

An alternative might be to outlaw corporations--and automatically, at the same time, make them cooperatives.

The two have a lot of similarities, including limited liability provisions for the shareholders and officers, ease of changing ownership with stock that doesn't change the identity of the enterprise (a partnership becomes a completely new entity when partners come in or leave the partnership, with complications in things like business registration), and distribution of profits or losses according to stock ownership.

The key difference is in voting. In a cooperative, you get one vote per stockholder or proxy for a stockholder; stock ownership doesn't come into this at all. In effect, it's how we vote in this country (or are supposed to, anyway). If it's good enough for the grand enterprise that is the United States of America, it's good enough for a company!

We have a lot of companies that are cooperatives. They include grain elevators (usually owned by farmers), food processing companies (also owned by farmers who provide the food for processing; I had a plant owned by such a cooperative right down the street from where I live), some electric companies, and credit unions (in effect banks that are owned by their depositors). If you have an insurance company with "Mutual" in its name, it's owned by the policy holders that are also its customers. (My wife worked for one for 12 years; it's still there, in Martinsburg, W.Va., only about 12 miles from my house, and well into its second century.) No doubt there are others; the controversial Alexandria Ocasio-Cortez has commented that her district, which is part of New York City, has "hundreds" of businesses organized as cooperatives.

It's not like that approach is a total stranger in the land of free enterprise.

That's one approach.

Another might be to look at whether some companies have gotten too big, becoming monopolies. Maybe we need to break them up. (Hello, Teddy, can you come back for a while?)

Finally, in the case of railroads, maybe some sort of nationalization program might be in order. Some might get a fainting spell at that idea, but consider what the hedge funders want for returns--and look at how I and at least one other person here think maybe those rates of return just aren't possible without cannibalization. With the right terms--say a lease with a guaranteed return of 6%, or outright purchase, or some mixture of the two--we could take a "problem" out of the hedge funders' hands and do better work without having to worry about those unattainable profit levels. (The hedge funders could then play their games with stock manipulation, and we wouldn't have to worry about paying for it, at least at the operating level.)

These are just ideas, and maybe they're just so much hooey, but then again, what we have now is not serving us well, not at all.