By Chuck Kelly
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Consider:
Matthew Rose, CEO of Burlington Northern, made $5,024,285 in 2002.
Richard Davidson, CEO of Union Pacific, made $16,278,789 in 2002.
Undoubtedly, they cite their outstanding management skills as justification for such high incomes. These skills would include cutting labor and equipment costs to the bare bones—to the point where both people and machines are stretched to their breaking points.
Employees not only experience more stressful working conditions, they also find that their vulnerability to future layoffs prevents them for pressing for higher wages—even enough to keep up with inflation. In today’s economy, it seems that only low-level employees must make the sacrifices necessary for corporate profits.
As you read the following excerpt, ask yourself: was the public well served by the effects of these incredibly greedy CEOs on the national economy?
From The Wall Street Journal, December 1.
Railroad Logjams
Threaten Boom
In the Farm Belt
Delays in Grain Shipments
Reduce Potential Profits,
May Affect Overall Economy
In a harbinger of potential snags across the U.S. economy, a sudden boom in the farm sector has combined with shortages of railcars and crews to delay freight trains and lead to higher delivery costs for farmers across the country….
That is because years of cost-cutting on both personnel and equipment have left railroads short-handed, forcing them to scramble to deal with the unexpected surge in both the agriculture sector and the economy in general.
Indeed, railroad delivery times for everything from lumber to containers of consumer products have started to climb. And that could eventually lead to higher prices for items ranging from breakfast cereal to cars….
The problems threaten to give the railroad industry a black eye just as it was poised to try to grab more business from trucks. Railroads unveiled new, faster schedules in the summer, and some public officials are showing more interest in funding rail projects that would remove trucks from congested roads….
Meanwhile, railroads are scrambling to hire more crews and secure more locomotives. Burlington Northern plans to increase its capital spending next year to $1.9 billion from $1.7 billion this year, as it expands track and acquires new freight cars….
Burlington Northern, for instance, was caught off-guard by the record U.S. corn harvest and a bumper wheat crop. It had allowed its fleet of grain-hopper cars to shrink 24% over the past five years to 26,500 cars. Grain cars are now in such short supply that Burlington Northern has temporarily stopped guaranteeing when it will deliver any more to customers….
In addition to equipment, the railroad industry is short of skilled workers. For example, Union Pacific Corp., the nation's largest railroad, didn't move quickly enough to replace retiring locomotive crews….
Grain industry officials say the logjams are the worst since 1997, when railroad mergers left the Farm Belt in knots. The added expenses threaten to put a dent in the recovering agricultural sector. Some grain elevators—the economic engine of many Plains towns—are seeing their potential profits shaved by their limited ability to conduct business during the recent commodity-price rallies….
Even when the train shortage ends, some costs will remain higher. Burlington Northern plans to raise its basic rate for hauling corn from the Northern Plains to ports in the Pacific Northwest by 8%, or $160, by February. Canadian Pacific says it is raising its rate for similar service by 8% to 10%.
"It galls people that they're putting in a rate increase when they can't perform with what they got," says Jerry Cope, transportation manager of South Dakota Wheat Growers Association, a farmer-owned cooperative based in Aberdeen, S.D. ….
Cutting costs is all the rage today, no matter how stupid, and as long as it improves the short-term bottom-line. Instead of maintaining employees and equipment—by repairing, training, upgrading and preparing for the future—the egomaniacs at the tops of our railroad corporations wanted to make their quarterly reports look good so their bonuses and stock options would be worth more.
So, they got incredibly rich, while forcing expenses on practically all other sectors of the society, which are paying dearly for their greed and poor management.
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Chuck Kelly is at http://www.KellySite.net. He holds a Ph.D. in industrial communications from Purdue University, is now a retired management consultant, and author of the books, THE DESTRUCTIVE ACHEIVER, THE GREAT LIMBAUGH CON, and CLASS WAR IN AMERICA. This article is originally published at opednews.com. Copyright Chuck Kelly, but permission is granted for reprint in print, email, blog, or web media so long as this credit is attached
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