Union Pacific Corporation

Union Pacific Corporation

General details

• Founders: Oakes Ames, Oliver Ames, and Thomas C. Durant 
• Distinction: Helped bridge east and west with first transcontinental railroad. 
• Primary products: Transportation services by train and truck. 
• Annual sales: $11.273 billion. 
• Number of employees: 52,000. 
• Major competitors: Burlington Northern, Santa Fe, FedEx, Norfolk Southern. 
• Chairman, president, and CEO: Richard K. Davidson. 
• Headquarters: Omaha, Neb. 
• Year Founded: 1862. 
• Web site: www.up.com.

Union Pacific Corporation.

When delegates arrived at the Republican and Democratic presidential conventions in August 2000, they were treated, among other things, to a rarely seen display of railroad opulence. As many as 25 classic rail cars—refurbished to the sheen they boasted when the railroad was America’s preferred mode of travel—sat directly beside both convention halls. Two or three times each day, selected delegates were invited onto trains in this Heritage Fleet, Union Pacific’s prized showcase of passenger rail transport. They toured the dining car, with its elegant white tablecloths and freshly cut flowers; the wine car, featuring custom wineglass holders affixed to each seat; the domed car, where a casual lounge is topped by an enormous clear roof; and, last but not least, the political car, which actually was used for “whistle stop” tours by pre-World War I politicians.

Union Pacific no longer operates passenger lines. It switched long ago to the transport of commodities (such as lumber and coal) along some 36,000 miles of track in 23 states, Canada, and Mexico. But the largest railroad in North America— in the for m of its parent company, and with help from its sister subsidiaries— enjoyed showcasing these relics from back in the day when Congress chartered it in 1862 to help build the nation’s first transcontinental rail line. When the fabled symbolic spikes were driven seven years later to mark its completion, the golden age of railroads and of Union Pacific began in earnest.
UP was ready as hopeful miners and other pioneers rushed to the newly opened West, and it jumped on the rollercoaster that followed. Before the 19th century came to an end, it had purchased several competing lines, expanded connections throughout the western United States, started a coal company, passed in and out of bankruptcy, and changed hands in a $110-million deal. More twists and turns followed in the 1900s, but by then UP had established its legacy as the railroad that moved people and products across a growing nation—a legacy still worth noting whenever powerful people gather as they did at the 2000 political conventions in Philadelphia and Los Angeles.

Abraham Lincoln approved the Pacific Railroad Act in 1862 to create the missing link in his drive to join America’s established East and Midwest with its rapidly growing West Coast. With the additional goal of possibly opening trade with Asia, this activated a Congressional charter that formed two private railroad companies—the Union Pacific and the Central Pacific—and charged them with bridging the vast wilderness that separated the country’s present from its future. In reality, work had begun earlier on lines that eventually would become part of UP and CP. But this was the great beginning. Both companies drove iron rails across some of the most dangerous and inhospitable land on the face of the Earth, spanning 1,700 largely vacant miles from Omaha to Sacramento to make a continually dispersing nation whole.
The route east from California would be built by Central Pacific, and it carefully planned its path over some very challenging terrain. The rails west from Nebraska would be built by Union Pacific, along a politically expedient course through the Platte River Valley, as determined by Congress. The only settlement of consequence in between was Salt Lake, and a spot northeast of the city was chosen for the actual connection. The subsequent task proved far more difficult than many anticipated, taking six long years to complete and some 20,000 men—most immigrants from China and Europe—performed the backbreaking work entirely by hand. The blistering desert, and mountains as high as 8,000 feet didn’t help, nor did local animals and Native Americans (who were both, quite justifiably, upset with the boisterous incursion on their land by hordes of people and tons of machinery). A pictorial record of the process was made by former official U.S. Army photographer Andrew J. Russell. But even today, there is confusion over how many died during construction and how much the project ultimately cost.
Problems, in fact, surfaced from the beginning. Union Pacific broke ground, badly underfinanced, just as the Civil War started. The uncertainties and lack of money kept construction at bay until two wealthy Boston brothers named Oakes and Oliver Ames threw their personal reputations (along with about a million dollars) into the languishing effort. As Central Pacific was already negotiating its way over the arduous Sierra Nevadas, UP finally advanced under the supervision of Thomas C. Durant—but not without complications. Problems couldn’t be avoided in a project such as this, which required 40 cars of material for every mile of track laid. It also required dealing with thousands of rough-and-tumble immigrants and war veterans engaged in the punishing pick-and-shovel work, which paid just $1 for every 12 to 16 hours of daily labor seven days each week.
Despite such obstacles, the competing crews hurried toward their rendezvous spot called Promontory Summit in Utah’s beautiful Salt Lake Valley. The first to reach it would win the right to establish a depot and capture future business, in addition to the 6,400 acres of public lands (later doubled). They would also receive liberal loans to as much as $48,000 per track mile that Congress set aside in its initial charter. When the end was near, shiny trains bearing company and government officials converged on the point. And on May 10, 1869, the connection was memorialized with the symbolic driving of two special spikes: a silver one by Durant, and a golden one by major Central Pacific backer Leland Stanford. A Western Union telegrapher signaled “done” to the waiting nation, and the New York-to-San Francisco journey that once took six months by wagon now could be completed comfortably in a mere 10 days.
Some former workers stayed on with the railroad to help it expand its branch lines. Some settled in the towns, farms and ranches that popped up in the suddenly accessible national interior. Still others joined the California and Colorado gold rushes of the 1870s, which brought even more hopefuls West by means of rail. UP’s success remained elusive, particularly after an 1872 scandal that engulfed Durant and other leaders. It turned out that they had been siphoning millions through a phony construction firm called Credit Mobilier of America that held UP’s liquid assets for five years. The fraud, along with other management-related fiscal damage, left Union Pacific heavily in debt. By 1893, it was forced into receivership, where it remained for four years until it was purchased for $110 million by a group of investors. It was reincorporated as the Union Pacific Railroad Company in Utah. Now under the control of Edward H. Harriman, serious remedies—such as buying new cars, replacing old bridges, and adding track miles—were implemented. And finally, the company attained economic stability.
During the previous decade, UP had been notably ahead of its time by utilizing mergers and acquisitions to expand its reach. Not all of it worked immediately, but all provided new and powerful connections throughout the region. At the same time, luxurious passenger service was building new converts and Americans became increasingly enchanted with the rails. Shortly after more powerful locomotives and improved construction (allowing trains to bend more easily around curves) was introduced, UP took advantage of its new financial equilibrium and added its first subsidiary: the Union Pacific Coal Company. Such expansion would remain the norm for many years.