The Union Pacific and Norfolk Southern Railroads announce plans to create the first transcontinental railroad. (Courtesy of Norfolk Southern)
OMAHA — Omaha-based Union Pacific Railroad’s announcement Tuesday that it is acquiring the Norfolk Southern Railway — a move that would create the first transcontinental, coast-to-coast rail system — drew praise from Nebraska’s public and business leaders.
Omaha Mayor John Ewing Jr. lauded U.P.’s decision to remain headquartered in Omaha and to keep its name, saying that both decisions give the city “confidence in a long, proud, shared future.”
“We would welcome any future employees from the combined railroads to settle in Omaha,” Ewing, the mayor of the state’s largest city, said in a statement.
A Union Pacific train transports coal through Spanish Fork Canyon in Utah County, Utah. on Wednesday, July 31, 2024. (Photo by Spenser Heaps/Utah News Dispatch)
Nebraska Gov. Jim Pillen noted on social media that President Abraham Lincoln envisioned a railroad extending to the Pacific Ocean and chose the Omaha area as its starting point.
“U.P. has been building America ever since, and Nebraska has become a centrally-located national transportation hub along the way,” he said. “The State of Nebraska looks forward to supporting this tremendous partnership, and we are proud to host America’s First Transcontinental Railroad.”
Span 50,000 miles
Railroad leaders said the proposed merger, projected to wrap up in early 2027, could transform the U.S. supply chain, unleash American manufacturing, preserve union jobs and drive economic growth.
Jim Vena, the railroad’s chief executive, said in a statement that the new network would span more than 50,000 miles, serve 43 states from the East Coast to West Coast, link about 100 ports and reach nearly every corner of North America.
“It will enable us to stay at the forefront of technological advances that continue to fundamentally change how freight moves,” he said, adding that the move spurs a “new era of American innovation.”
Union Pacific CEO Jim Vena, left, and Norfolk Southern CEO Mark George sign an agreement between the two companies that would create a true transcontinental railroad. (Courtesy of Union Pacific)
Vena and Norfolk Southern’s Mark George appeared on CNBC to talk about the purchase deal that is said to be worth $85 billion.
The result, the companies’ statement said, is the creation of a “combined enterprise of over $250 billion.”
Vena is to run the combined entity and is viewed as the architect. He said during the interview that the railroads are sure they will grow the business and workforce. Both leaders said they wouldn’t shed unionized jobs as part of the plan.
George said the two CEOs got together several months ago and talked about what they could do to create something bigger. If approved, the new “Union Pacific Transcontinental Railroad” would combine U.P.’s strength in the western two-thirds of the country with Norfolk’s base in 22 eastern states.
“It became very very clear how big these revenue synergies are,” George said. “So we’re really excited about the future.”
Norfolk Southern’s current headquarters in Atlanta is to become a key site focused on technology and innovation.
For now, Vena said, “it is business as usual,” though he acknowledged the many questions that people have.
In coming months, he said, the railroads would submit a formal merger application to the Surface Transportation Board. During that period, the two companies will continue to operate separately.
George said two years of planning the integration should allow the merged railroad to “hit the ground running.”
Scrutiny ahead
Vena, on his company’s website, said the proposed transcontinental network is expected to deliver faster service by eliminating car touches and interchange delays, opening new routes, expanding intermodal services and ensuring faster movement along key rail corridors.
“We will take even more trucks off highways, decreasing congestion and reducing wear-and-tear on taxpayer-funded roads,” he said.
More than 40,000 U.P. and Norfolk Southern union employees move goods essential to daily lives, he said. Together they have 360 years of history.
The deal likely faces regulatory scrutiny amid concerns, including from labor unions, over potential job eliminations and disruption in service.
The Transport Workers Union of America, which represents workers at Norfolk Southern, said in a statement Tuesday that it strongly opposes the planned merger and urged federal regulators, lawmakers, shippers and unions to block the deal.
“A supersized Union Pacific would be catastrophic for TWU rail workers, shippers, and the safety of millions of Americans who live and work near freight rail lines,” said International President John Samuelsen.
SMART Transportation Division (SMART-TD), described as the largest rail labor organization in the U.S., said in a statement it is “deeply engaged” in evaluating the implications of the proposed merger.
The union said the deal would encourage further consolidation across the rail system, “triggering another wave of transcontinental mergers creating a duopoly. Both history and logic suggest this would drive higher rates, fewer service options and diminished competition.”
U.S. Sens. Deb Fischer and Pete Ricketts, both Republicans, called the planned merger great for Nebraska and America.
“Employing over 5,000 Nebraskans, Union Pacific plays a crucial role in our state’s economy,” Fischer said. “I look forward to seeing the growth that will come to our state as a result of this crucial partnership.”
Said Ricketts: “This has the potential to create jobs, increase wages, and streamline the supply chain.”
Heath Mello, CEO and president of the Greater Omaha Chamber. (Courtesy of Greater Omaha Chamber)
Base remains Omaha
Heath Mello, president and CEO of the Greater Omaha Chamber, said local business leaders were proud that “one of the most iconic names in American industry, continues to call Omaha, Nebraska home.”
Mello said the U.P. leadership and decision “reinforces our region’s central role in building a more connected and prosperous nation.”
“Railroads were built in America to bring people, communities and commerce together — and this new transcontinental network is the embodiment of this dream,” Mello said.
Vena told his company’s workforce that the two railroads have roots in spurring the Industrial Revolution.
He added, “I’m being straight with you when I say, ‘There is no better combination of railroads to finalize President Abraham Lincoln’s original vision to create a transcontinental railroad.’ ”
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