Union Pacific will do all in its power to stop rail mergers- CEO
By Nick Carey
LOMBARD, Ill. Jan 13 (Reuters) - No. 1 U.S. railroad Union Pacific Corp believes major railroad mergers are not in the interest of the rail industry or customers and is working behind the scenes to make sure none take place, the company's top executive said on Wednesday.
"We don't want Class I railroad mergers to happen," chief executive Lance Fritz told Reuters when asked about Canadian Pacific's unsolicited bid for U.S. railroad Norfolk Southern Corp. "We'll do everything in our power to make them not happen."
Fritz, who was in the Chicago suburb of Lombard to address a meeting of the Midwest Association of Rail Shippers, said Union Pacific has been talking to state and federal legislators across its network, its customers and regulators including the Surface Transportation Board about why mergers would be bad for business.
"I think we're doing a fair job of helping them understand our perspective," Fritz said. "I think (the chance of a merger happening is) slim because I want it to be slim and we're working hard to make it slim."
He said a merger would create problems in Chicago where all major U.S. railroads interconnect and stressed a flurry of mergers in the 1990s created huge service issues.
Union Pacific has also talked to other major railroads about the potential impact of a merger, though those conversations are limited by law.
Canadian Pacific in mid-November disclosed its $28 billion offer to buy Norfolk Southern.
Norfolk Southern has spurned the Canadian railroad's interest, setting the scene for a potentially lengthy proxy battle. A number of customers and legislators have written to the Surface Transportation Board (STB) opposing the proposed merger. Continued...