I’ve spent the last couple days packing up my office, and spending time talking with friends, business leaders, and community leaders about “what’s next” for me. The first thing is I plan to run through the tape, and hand over a business to Jim that is in good shape and ready for new leadership. After that I will spend more time with Julie and my family, enjoying moments that had to be put second to what the railroad needed. These conversations have also prompted reflection – on 23 years with Union Pacific, and the eight and a half years serving as chairman, president, and CEO.
Note: The following message was addressed to Union Pacific employees, written leading up to Lance Fritz’s retirement.
It has been the honor of a lifetime to lead our iconic, 160-year-old corporation, one that is incredibly important to the United States and world economy. The best part was working closely with the finest team I could hope for as we tackled challenges and endeavored to serve, grow, and win, together. My favorite days were the ones I spent with you, learning about your work, and seeing the pride you take in your work. We moved Union Pacific forward together, making a difference in the lives of many people.
Here are just a few of Team UP’s achievements I’m most proud of:
Courage to Care – An initiative that began over a decade ago remains one of the cornerstones of our safety efforts. Courage to Care was created to shift our mindset after a series of employee fatalities – each one a gut wrenching, soul crushing loss. From that misery was born a personal commitment to do our jobs with a passion for safety, to look out for each other, and to invite others to look out for us.
The Courage to Care pledge reads: “I pledge to shield myself and my team from harm. I will take action to keep them safe, by fixing an unsafe situation, addressing an unsafe behavior, or stopping the line. In turn, I will have the courage to accept the same actions from my coworkers, who care enough to correct my path.” Those words resonate as strongly today as they did 10 years ago.
Growth – Through the years, we’ve deliberately aligned our operations for growth outside our coal network. That required creatively developing more efficiencies in our premium and manifest networks. We brought on some terrific partners in the premium world, including Hub, Schneider, Knight-Swift and XPO (now STG Logistics) while continuing to run our EMP and UMAX products. We also created new opportunities through intermodal facilities in the Twin Cities, Houston, and Inland Empire. At the heart of our growth efforts was improving the customer experience throughout the entire customer journey. One result: Union Pacific was the only U.S. Class I railroad to experience volume growth in 2022, and we are outperforming the industry again in 2023. When our markets turn more favorable, we are ready to take off.
Employee Quality of Life – Our last round of labor negotiations provided significant wage increases, making our craft professionals among the highest paid in the industrial economy, and rightly so. Our jobs are tough, and our employees create great value for our stakeholders. They deserve to be paid well. In the short time since those negotiations, we passed more quality-of-life-impacting agreements than I experienced in my entire 23 years with the railroad. These include agreements to schedule unscheduled jobs for those who operate trains and provide paid sick days for all our craft professionals. And all along we’ve continued to enhance benefits for all employees, including an Employee Stock Purchase Plan that will help employees build retirement wealth. Driving these efforts is a need for our employees to feel valued and have some work/life balance, and to make these jobs more attractive so it’s easier to continue to hire great talent.
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Sustainability – We’ve deliberately leaned into sustainability over the past several years, not only because it builds value for all stakeholders, but because we understand the communities we serve give us a social license to operate. We take that obligation seriously – we’re experimenting with hybrid locomotives and hydrogen diesel engines, we’re rapidly converting our diesel consumption to bio and renewable fuels and Union Pacific will be the largest owner of battery electric locomotives in North America. The culmination of these efforts is to reach our goal of achieving net zero emissions by 2050.
Technology – Throughout my tenure as chairman, I’ve seen us implement game-changing technology that has impacted how we run our railroad. This includes Positive Train Control – a moonshot effort that has become part of the mosaic of the rail industry – as well as a new generation of computer aided dispatching we call CADX. And we are on the threshold of doing the final cutover of NetControl. When we cutover we will be the first in our industry to take the step from a legacy enterprise system to a modern, services-architected platform. Under the leadership of our Chief Information Officer Rahul Jalali, this last step will enable us to use Artificial Intelligence and Machine Learning technologies to make better decisions in real time. One source of truth, one team, one goal.
Diversity and Inclusion – After the murder of George Floyd in 2020, we reexamined our commitment to diversity, equity, and inclusion. While our audit was encouraging, we also discovered we could do more. We launched employee listening sessions, publicly committed to doubling our workforce’s female representation and growing our minority workforce to 40% by the year 2030, and worked to identify under-representation gaps and strip out unconscious bias. I’m proud of our commitment to fostering a diverse and inclusive environment that reflects the markets and communities we serve, one where people can be their best, personally and professionally. And we have built Union Pacific into the most attractive railroad to build a career – because great talent shows up from all walks of life.
But what I’m most proud of is how all of you, the entire Union Pacific team, show up every day to deliver North America’s safest, most reliable, and most efficient supply chain solutions. That is our purpose. You do it with a passion for performance, with high ethical standards, as one team, one railroad.
I have loved being your steward, your facilitator, your supporter, and your leader. As I said at the beginning of this letter – it’s been an honor of a lifetime. I look forward to watching you take this great railroad to places I could only dream about. Thank you!