Rail merger could make first transcontinental railroad under a single brand

Rail giants Union Pacific and Norfolk Southern have agreed to a merger valued at $85 billion. If approved, the two companies would come together under the Union Pacific label, control over 50,000 miles of track in 43 states and be the first transcontinental railroad in U.S. history under a single brand.

Matthew Gustafson is a professor of finance at Penn State University.

Matthew Gustafson, Professor of Finance, Pennsylvania State University: 00:01:17:21 - 00:01:34:11 Well, it's very complicated on on a lot of dimensions, I think, before they go through the operational challenges of, you know, figuring out how to allocate their employees across the newly formed company. They're going to wait and see what the, regulatory agencies say about things.

According to company data, Union Pacific moves 1.6 million carloads of grain annually and Norfolk Southern transports 18,107 carloads of grain and grain mill products every year. 

Union Pacific CEO Jim Vena says they hope to eliminate $1 billion in costs annually, and no union members should lose their jobs. However, the workforce could shrink due to attrition.

SMART-TD, the nation’s largest rail union, opposes the merger over worry it will jeopardize progress Norfolk Southern has made in safety and labor relations since the 2023 derailment in East Palestine, Ohio. The Transport Workers Union echoed those concerns and said the deal delivers “billions to Wall Street while workers get shafted.”

The two companies hope to get approval for the deal from the federal Surface Transportation Board by early 2027. 

For Market to Market, I’m David Miller.

contact: Miller@iowapbs.org