Union Pacific engine

Union Pacific is suing the city of Palestine to invalidate a contract they've shared for more than 150 years.

Union Pacific in Palestine laid off 30 employees from its car shop Thursday morning. Those employees reported to work and were told they no longer had jobs.

“This morning, Union Pacific notified employees of a workforce reduction in Palestine, impacting mechanical workers,” said UP spokeswoman Kristen South. “These steps are part of Unified Plan 2020, which streamlines operations as we ensure Union Pacific remains a strong, competitive company that provides safe, efficient, and reliable service.”

The annual salary for the local jobs lost was roughly $65,000. That amounts to a hit of nearly $2 million a year to the area economy. The news comes a week after Union Pacific reported record earnings.

“I’m certainly saddened to hear that any individuals in the city of Palestine have been laid off,” Mayor Steve Presley told the Herald-Press Thursday.

Presley said UP must, by contract, maintain a certain percentage of jobs from the local community.

“Union Pacific is contractually obligated to keep a particular number of jobs based in Palestine,” Presley said. “UP has always been very good to our community and has always lived up to its contractual obligations.”

Presley said city officials would verify how many Union Pacific jobs remain here, and whether the company still complies with the contract.

South said the company would continue to meet contractual obligations. “Union Pacific remains in compliance with its agreement to maintain employment levels in the city and county,” she said.

Union Pacific would not confirm the number of local people laid off, but the Herald-Press was told 30 car shop employees were furloughed and two foreman were forced to give back to their tools. That leaves 56 car men, four foreman, two foreman generals, and two managers on staff.

On April 18, Union Pacific reported first-quarter net income of $1.4 billion, or $1.93 per diluted share. This compares to $1.3 billion, or $1.68 per diluted share, in the first quarter of 2018. Operating income totaled $2 billion, up 1 percent, and operating ratio of 63.6 percent, improved 1 point.

“We delivered record first quarter financial results driven by improved operating performance, while dealing with significant weather challenges,” said Lance Fritz, Union Pacific chairman, president and chief executive officer. “Unified Plan 2020 crated a more resilient and robust network, allowing us to quickly return to normal operations.”

In September 2018, Union Pacific announced its of Unified Plan 2020, a new operating plan that implements Precision Scheduled Railroading principles.

The Unified Plan 2020 launched Oct. 1 across the entire Union Pacific rail network.

Precision Scheduled Railroading aims to improved service reliability for customers, increase operating efficiency, and reduce network complexity.

Many laid-off employees hope for a call-back. Some will apply for other jobs within Union Pacific at other Texas locations. Others will take jobs locally and hope they are contacted by the Palestine branch for a job opening.

Jobs will be offered by seniority to those who were laid off first.

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