Nostalgia & History > How did the MoP bunch take over the UP?

Reading the "What if things had been different?" thread on
the Western Board reminded me of a question that's bugged
me for some time...

To the extent it's "common knowledge" that the MP management
crew "took over" the UP shortly after the merger, how/why did
this happen?

Typically with mergers, the larger company keeps the "acquired"
managers they want, and run off the rest. That's one of the easiest
ways to achieve the cost cuts that drive a lot of mergers.

With the UP / MP / WP deal, how did the MP get control of the company
to the degree that the MP culture displaced the UP's?

<Typically with mergers, the larger company keeps the "acquired"
managers they want, and run off the rest. That's one of the easiest
ways to achieve the cost cuts that drive a lot of mergers.>

It depends more on which company the CEO of the merged company comes from, they tend to bring in the management they have worked with. The chairman of the larger company may be looking to retire with no clear candidate to replace him/her, and/or the board and stockholders may intentionally be looking for a new direction for the larger company which they percieve can be attained with a chairman and management from the smaller company. For example when BN and Frisco merged, the Frisco management team took over. Krebs from Santa Fe brought in a lot of his management team to BNSF, even though Santa Fe was the smaller of the two roads. From what I can tell, same sort of thing happened with UP/MoP.

It is actually interesting.

The UP got something that it had wanted for years, access to Chicago and St. Loius, but...

picked up MoP management folks that were as arrogant as the UP was.

Some have siad that many of the UP's problems in the last few years was from the MoP arrogance.

I heard it said not long after the UP/MoP merger, an former MoP type describing the UP as...

"The Union Pacific succeeded in spite of itself"

So much for the famed UP arrogance.

J.

I am not so sure that the idea "The MoP bunch is operating the UP in MoP fashion", is a correct assumption, assessment or observation.

I believe Davidson actually transferred to the SP just after or during the SPSF failed merger. Krebs on the other hand was in charge at SP and transferred over to the AT&SF after or during the planned SPSF merger. Davidson was in line and took over during the SP, D&RGW merger continueing on and moving to the head honchos chair, during the UP, SP merger. I wish I could put my hands on the Trains Mags.. Buried somewhere in storage. I could shed more light on the subject. They covered the action fairly well.

Naturally, you are going to have a diverging mix of management styles when you merge multiple rail lines with so many former rail administrative types. However, to say that UP is all MOP-ped up. I don't believe that is a correct assessment of the situation. The history of the MoP has been recorded as hard heads to deal with. They were blamed for the failed WP, D&RGW, MoP attempt to merge back in the 60's (if memory serves me correctly).

I believe UP took on more then it could bite off and chew at one time. It didn't help when they gave out early retirements or flat out dismissed SP Supervisors and Yard Masters and replaced them with inexperienced college boys. A training period for the newcomers would have helped to alleviate the meltdowns that followed.

Blah, blah, blah and what does it all mean? Nothing. To really know what has happened we would need to be a mouse in the corner or part of the struggling management teams. Not part of a rumor mill. We are just guessing here.

RickH

Just my two cents.

Did a Google on Dick Davidson and found this:
Short Biography

A native of Allen, Kansas, Richard K. "Dick" Davidson started his railroad career as an 18-year-old brakeman/conductor with the Missouri Pacific in 1960. He was appointed assistant trainmaster at Shreveport, Louisiana, in 1966. He held various positions in the Operating Department at Fort Worth, Texas, Kansas City, and North Little Rock, Arkansas, before being named assistant to the vice president-operations in St. Louis, Missouri, in 1975 and vice president-operations in 1976.

Davidson joined the Union Pacific Corporation when it merged with the Missouri Pacific and the Western Pacific Railroads in 1982. He was promoted to vice president-operations of Union Pacific Corporation in 1986 and executive vice president in 1989. Davidson was appointed president and chief executive officer on August 7, 1991. He has been chairman, president, and chief executive officer since January 1, 1997.

http://www.emporia.edu/kbhf/Contemporary/davidson/davidsonshortbio.html

RickH Wrote:
-------------------------------------------------------
> I am not so sure that the idea "The MoP bunch is
> operating the UP in MoP fashion", is a correct
> assumption, assessment or observation.
>
> I believe Davidson actually transferred to the SP
> just after or during the SPSF failed merger.
> Krebs on the other hand was in charge at SP and
> transferred over to the AT&SF after or during
> the planned SPSF merger. Davidson was in line and
> took over during the SP, D&RGW merger
> continueing on and moving to the head honchos
> chair, during the UP, SP merger. I wish I could
> put my hands on the Trains Mags.. Buried
> somewhere in storage. I could shed more light on
> the subject. They covered the action fairly well.
>
>
> Naturally, you are going to have a diverging mix
> of management styles when you merge multiple rail
> lines with so many former rail administrative
> types. However, to say that UP is all MOP-ped up.
> I don't believe that is a correct assessment of
> the situation. The history of the MoP has been
> recorded as hard heads to deal with. They were
> blamed for the failed WP, D&RGW, MoP attempt
> to merge back in the 60's (if memory serves me
> correctly).
>
> I believe UP took on more then it could bite off
> and chew at one time. It didn't help when they
> gave out early retirements or flat out dismissed
> SP Supervisors and Yard Masters and replaced them
> with inexperienced college boys. A training
> period for the newcomers would have helped to
> alleviate the meltdowns that followed.
>
> Blah, blah, blah and what does it all mean?
> Nothing. To really know what has happened we
> would need to be a mouse in the corner or part of
> the struggling management teams. Not part of a
> rumor mill. We are just guessing here.
>
> RickH
>
> Just my two cents.

You have some good general points, but, Dick Davidson was Missouri Pacific, through and through, to the end, and never worked outside the Missouri Pacific/Union Pacific organization. To Davidson's credit (he STARTED OUT, but, did not end up...in the end...as a "self-made man"). He started out as a brakeman on the Missouri Pacific. I once looked up the seniority roster, and, he is the number one brakeman/switchman/conductor on that particular seniority roster, and, like all managers, outside in the assignment field, rather than a particular board that he is assigned to, it states "CO" (for Company Officer). He went to college in Kansas (not a high-blown Ivy Leaguer like, say, Robert Krebs, who went to either Havard or Yale...I'm fairly certain it was Yale). In fact, I think you're getting Davidson mixed up with Krebs, who started out with SP, then went to the Santa Fe during the trial period of the SPSF merger, and stayed with ATSF after the failure of the merger.

Back to Davidson. His first management job was as assistant trainmaster on the T&P (MP subsidiary, as SSW was to SP). At some point, he was noticed by Downing Jenks, MP President, and got close to him, and, ended up marrying his daughter. This jettisoned him to the rank of Division Superintendent at the age of 29. He became Executive Vice President of Operations at MP at an early age. At some point, after this marriage was no longer essential to his further advancement, and, after Downing Jenks departed the organization, this marriage ended. Not smearing the man, just stating facts. He is now, I believe, on his third marriage, to a much younger woman (he and his young wife, to my surprise, were highly visible as the first two members of the audience to mount the stage and shake the hands of Joe Lieberman and former UP Board Member Dick Cheney at the conclusion of the 2000 vice presidential debates (since I'm a political junkie, as well as a RR junkie, this caught my attention sharply). I'm not knocking that, either, since I voted for the Bush-Cheney ticket, along with a surprising number of other working railroaders, though you won't find many admitting that on this forum.

Back to the merger timeline. John Kenefick was President of the UPRR at the time of the UP/MP merger, and, Jerry Davis was EVP of UP, while Dick was EVP of MOPAC. Kenefick stayed, and, Dick became EVP of the combined RR. Davis went to CSX, but, ironically, was brought back in by Dick Davidson as President of the Railroad after he had assumed the titles of Chairman of the Board, President, and CEO of UP Corporation, and, CEO of UP Railroad, the titles he retains to this day. Davis left after a couple of years (a great loss, as he was a real railroader), had a yard named after him in California, and was replaced by Ike Evans, a Vice President of Emerson Electric Company. Ike was a disaster for the railroad, cut the budget to the bone (he came in AFTER the RR had healed itself from the Meltdown of 1997), and, created conditions which led to another meltdown in California, just as big (the Regional Vice President contributed to this, too, by refusing to hire enough people to staff the Western Region, causing managers to be called in from all over the system, mostly MOP's, to help run trains...just as had happened in Houston in 1997. Said RVP took an early retirement, and, thankfully, Ike was moved upstairs to the relatively powerless position of Vice Chairman, so that he could fulfill his contract, then, he retired).

I'm skipping around a little here. After Kenefick left, Drew Lewis, the former U.S. Secretary of Transportation was brought in as Chairman, President, and CEO of the UP Corporation, and, Davidson moved into the slots of Chairman, President, and CEO of UP Railroad. As Lewis (who was documented in the Wall Street Journal as a heavy drinker, with multiple DUI's...the WSJ article was entitled "What to Do When Your CEO is an Alcoholic?") was approaching retirement, Davidson retained all the railroad titles, Lewis retained the Chairman and CEO of the Corporation titles, but, Davidson added President of the Corporation title to his Chairman, President, and CEO of the Railroad titles. When Lewis left, Davidson assumed all the top corporate titles, and kept his hand firmly in the Railroad as CEO. All the recent Presidents of the Railroad have not been CEO, they have generally been President and Chief Operating Officer (COO) of UP Railroad, but Davidson has retained all the titles of real power at both the corporate and railroad levels.

Let's see...as to the MOPAC influence, the Executive Vice President of Operations for the Railroad after the UP/SP merger was Art Schoener, a Missouri Pacific man and Davidson protege. But...after the "MELTDOWN OF 1997", Schoener fell on his sword for Davidson, and took the fall (along with a VERY generous severance package in the millions). Schoener went into consulting for awhile, enjoyed his severance money, stock options, pension, and what have you, and after he recharged his batteries for a few years, he came back flag flying high as Executive Vice President of Kansas City Southern Industries, and, President and CEO of KCS Railroad, under Chairman Mike Haverty. Haverty, a brilliant railroader who at Santa Fe brought back the "Super Fleet" livery, but had to leave because there was not room at Santa Fe for both Haverty and Krebs (two very powerful personalities, neither of whom are the type that can survive in a "second fiddle" role). But, as the the relationship between Haverty and Schoener at KCS...though Haverty is best known for his days at Santa Fe...Haverty, too, got his start at Missouri Pacific, and went through the same Missouri Pacific Management Training Program that Dick Davidson and Art Schoener went through (ironically, current BNSF head Matt Rose went through the Missouri Pacific Management Training Program!!!).

So...not only did the Missouri Pacific end up controlling the UP (lots of people fail to realize that though UP is one of the oldest names in the business, with "brand appeal", and a very historic company name in the economic history of the United States, Missouri Pacific was LARGER than Union Pacific in every way a Class One railroad can be measured, from revenue, to track miles, to head count, to net profit).

I never heard of UP being referred to as "arrogant" before the UP/MP/WP merger. Prideful...yes. Proud of running the fastest trains across the desert (well...they gave Santa Fe a good run for it's money in the speed department), yes. They liked to brag about having the biggest engines, and, they did, whether Big Boys or EMD Centennial units. But "arrogant" is not a term I ever heard until AFTER the UP/MP/WP merger in 1982 (I think 1985 is when all pretenses were dropped at keeping seperate indenties...the 1985 EMD SD50's being the last Armour Yellow units with "Missouri Pacific" lettering...the paint had barely dried on these units and the C36-7's which came with the same markings when the Missouri Pacific was completely folded into the UP).

Most of the Regional Vice Presidents have been Missouri Pacific men. The current Executive Vice President of Operations (who has been in that slot since the departure of Schoener in late 1997/early 1998), Dennis Duffy...another Missouri Pacific man.

So...you can take this to the bank: the UNION PACIFIC is the Missouri Pacific reconstituted with Armour Yellow paint, the shield, the wings. If it becomes a transcon someday...it matters not whether it "merges" with the Norfolk Southern, the CSX, or whoever...it will be known as the Union Pacific, and all locomotives will eventually wear yellow paint, sport the shield and wings. I suspect, however, that it's soul will always be that of the Missouri Pacific, even after Davidson is gone. Davidson has brought too many people up into the higher echelons (much like by the time of Pope John Paul II's death, all but TWO of the cardinals who elected his successor had been appointed by John Paul II, along with most of the Archbishops, Bishops, and all...and though former Cardinal Ratzinger was NOT one of the men he made cardinal, he was probably the closest cardinal to the late Pope, and very compatible in worldview).

The only question I have is with regards to the new President of UPRR, Jim Young. I THINK he's former Missouri Pacific, too. But I'm not certain, and perhaps somebody can fill me in on that. I DO, whatever his origins, think he is striving MIGHTILY, and is being forced to spend many millions of dollars to repair the damage done to the railroad under the deplorable Ike Evans regime. How Davidson could allow Evans to do what he did, in view of what he himself had recently been through with the trauma of 1997...this escapes me. But from the short time Young has been in office, it APPEARS that he is headed in the right direction. THIS Union Pacific employee is COUNTING on him to be!!!

A little more trivia about the UPRR really being the "MOPAC": the Missouri Pacific's computer system, "TCS", which was very innovative when devised, and is still a good system for today, is the computer system of the UPRR. It is a good enough system that it has been adopted by a few regional railroads, and, at least one Mexican railroad.

It has been said that the "Union Pacific has a MANIFEST DESTINY". Krebs, while at BNSF, thought it his mission to thwart the Manifest Destiny of the UP. The UPRR does have a Manifest Destiny, and I contend that for better, or for worse (I think that there are many examples of BOTH being the case), the MISSOURI PACIFIC was the primary vehicle for the UP to express and fulfill its Manifest Destiny. And, now, the SP has made it possible to continue to blossom. There are UP insiders who think the SP merger was a mistake because of the dilipadated state Anshultz and others allowed the SP to get into, but they're missing the big picture...the UP could not have survived as a player against the BNSF had this not been done. Poorly implemented the UP/SP merger was, but it was essential not just for the realization of the Manifest Destiny, but, to it's survival as a major player.

Always wondered about Cardinal Ratzinger, thanks for explaining that.

TCnR Wrote:
-------------------------------------------------------
> Always wondered about Cardinal Ratzinger, thanks
> for explaining that.

Are you serious, or, are you picking on old "Red" for bringing Pope Benedict XVI into this discussion about what some people call "The Borg"?!? LOL. I was just trying to make a point of comparision. I respect both John Paul II and Benedict XVI greatly, even though I'm a Southern Baptist.

I didn't mean to distract from the substance of this very good thread about the MOPAC influence on the current UPRR by bringing that reference into it. I do appreciate your link to Dick Davidson's biography...that will be very useful information for those who are following this debate about the history of the nation's largest railroad. Because...Dick Davidson...love him or hate him...is a VERY important part of UP's history. He is also a very prominent figure, and an interview subject (while serving as MOPAC's EVP) of the excellent book "The Rebirth of the Missouri Pacific", which was published in the early to mid 1980's.

When I was back in North Platte in 1980 I couldn't believe all the grumbling I was hearing, from employees, about the proposed merger. When I started asking some the operating employees why the usual answer was something like "it ain't a merger. The MOP's taking us over. Their managers run that railroad with an iron fist. The UP will never be the same.
I hear they treat their employees like dirt", ect. They were truly worried and had every right to be. The country was in a severe recession at the time and nobody knew what to expect from either the economy or the merger.

AM

Should have also said that was an amazing essay for the amount of time between postings, also an interesting perspective on the formitive time during the 'Pacific' mergers/aquisitions. Not to mention an interesting perspective that does not seem to be from Southern California, as TO gets accused of being so often. The brand ID was unique, the budget cutting and deffered track maintainance is interesting, happened to more than one RR or Company. Was trying to parallel the deffered maintainance to the dot com run up or similar Investor driven fads, maybe we should leave that for another day.

Also learned a lot from this thread, including the Biography.

Red Wrote:
-------------------------------------------------------
Some corrections:
> He went to
> college in Kansas (not a high-blown Ivy Leaguer
> like, say, Robert Krebs, who went to either Havard
> or Yale...I'm fairly certain it was Yale).

Krebs went to Stanford then Harvard Business School after attending high school in Sacremento.

> I'm skipping around a little here. After Kenefick
> left, Drew Lewis, the former U.S. Secretary of
> Transportation was brought in as Chairman,
> President, and CEO of the UP Corporation, and,
> Davidson moved into the slots of Chairman,
> President, and CEO of UP Railroad.
Drew Lewis and the Board brought in Mike Walsh as CEO for five years. Dick Davidson worked for him as head of the operating department. Walsh made to most basic changes the UP had seen since Harriman bought the railroad out of bankrupcy. He changed it from a pre Stagger railroad to a business. Davidson was put in charge of the railroad when Walsh's five years were up.


> The only question I have is with regards to the
> new President of UPRR, Jim Young. I THINK he's
> former Missouri Pacific, too. >

Jim Young started with the UP in finance with the UP out of college.

The battle between the UP and MP management ended twenty five years ago. That is anceint history.

bobwilcox Wrote:

> Drew Lewis and the Board brought in Mike Walsh as
> CEO for five years. Dick Davidson worked for him
> as head of the operating department. Walsh made
> to most basic changes the UP had seen since
> Harriman bought the railroad out of bankrupcy. He
> changed it from a pre Stagger railroad to a
> business. Davidson was put in charge of the
> railroad when Walsh's five years were up.

Mike Walsh was a decent man. I had the pleasure of corresponding with him in the late 80's. He left UP to become chairman of Tenneco Corp, but unfortunately later succumbed to brain cancer at age 51.

I have a general theory why MoP management prevailed after the UP-MP "merger". UP executives and managers were primarily more senior "up through the ranks" types. MP favored younger managers with university credentials and MBAs (SP's Krebs was also in this mold). MP had a more "cut throat" culture, were better suited for political manuevering and, accordingly, the MP managers were able to displace most UP managers in the surviving organization. Many UP incumbents were in a position to retire anyway.

Bob

bnsfbob Wrote:
-------------------------------------------------------
> bobwilcox Wrote:
>
> > Drew Lewis and the Board brought in Mike
> Walsh as
> > CEO for five years. Dick Davidson worked for
> him
> > as head of the operating department. Walsh
> made
> > to most basic changes the UP had seen since
> > Harriman bought the railroad out of
> bankrupcy. He
> > changed it from a pre Stagger railroad to a
> > business. Davidson was put in charge of the
> > railroad when Walsh's five years were up.
>
> Mike Walsh was a decent man. I had the pleasure of
> corresponding with him in the late 80's. He left
> UP to become chairman of Tenneco Corp, but
> unfortunately later succumbed to brain cancer at
> age 51.
>
> I have a general theory why MoP management
> prevailed after the UP-MP "merger". UP executives
> and managers were primarily more senior "up
> through the ranks" types. MP favored younger
> managers with university credentials and MBAs
> (SP's Krebs was also in this mold). MP had a more
> "cut throat" culture, were better suited for
> political manuevering and, accordingly, the MP
> managers were able to displace most UP managers in
> the surviving organization. Many UP incumbents
> were in a position to retire anyway.
>
> Bob
>
>
>
>
This in line with my understanding. The MP people worked in an enviroment with a lot of competition with other railroads, trucklines and bargelines. Jenks was a great leader who developed people for the new world of railroading. Railroads were no longer public utilities that would be regulated and protected by government as long as they served a broad public need.

If Drew Lewis had not brought in Mike Walsh the UP would not had made it into the 21st century and a distinct coporation. That means I would not have a Harriman pension to deposit each month.

Red Wrote:
-------------------------------------------------------
>.......... At some point, he
> was noticed by Downing Jenks, MP President, and
> got close to him, and, ended up marrying his
> daughter. This jettisoned him to the rank of
> Division Superintendent at the age of 29.

JETTISON: to get rid of as superfluous or encumbering : DISCARD

Did you perhaps mean "Jetted"?

bnsfbob Wrote:
-------------------------------------------------------
> bobwilcox Wrote:

> MP had a more "cut throat" culture, were better suited for
> political manuevering and, accordingly, the MP
> managers were able to displace most UP managers in
> the surviving organization. Many UP incumbents
> were in a position to retire anyway.

This theory wins the "Occam's Razor" prize for best explaining
how the MP management team was able to take over the UP.
Bob's theory can't be proved or disproved as it pertains to the topic,
but it certainly explains how things happen in the real world. (especially
at companies where I have worked!)

It's a fascinating topic. Thanks to Red for his essay. I was very surprised
to read the part about Davidson marrying Jenks' daughter. I guess Davidson
wasn't taking any chances <G>.

Hopefully mdo will have some insights.....

Its probably the only reason Davidson was elevated with MP so fast and went so far...the marriage to Jenks daughter only helped him.

To Red, Bob Wilcox and all that jumped in here,

Wow!!! And, I didn't even ask for change.

Thanks for filling in the blanks regarding Davidson's employment history. At first glance it seems to make sense, as some have concluded; UP is "MOP-ped Up".

Still, one man's influence on a railroad as to his background and history, does not a railroad make. Despite all his best efforts he is only one man, doing one job. Simply said, You can-not sit at the helm of a railroad, as in at the control board, as you might a model railroad and operate trains. It takes the efforts of the board, administrators, Q.A, Safety committees, supervisors, team leaders, unions, right down-to that front line employee, to make a railroad work. Just to name a few.

UP is simply a mix master of; as many ideas and ways to operate a railroad, as there is personnel.

Again, my two cents.

RickH

RickH Wrote:
-------------------------------------------------------
> Still, one man's influence on a railroad as to his
> background and history, does not a railroad make.
> Despite all his best efforts he is only one man,
> doing one job. > RickH

If we were discussing a track laborer, or a clerk, I would agree
that one man does not a railroad make.

Railroad presidents / CEO's can, and do make a railroad, in their own image.
These guys have an enormous influence on a railroad to the extent that
they hire VP's and Supers that share a vision and will execute a strategy
that's set by the top dog. This philosophy filters down to the
Trainmasters and Road Foremen.

Ambitious TY&E types that aspire to management aren't oblivious to what
the bosses want to see and hear. And so it goes, the Jenks way of running
a railroad becomes a self-perpetuating philosophy that will continue until
an outsider assumes the throne.

My guess is that today's UP won't allow that to happen.

P.S. - Not to be a conspiracy theorist, but does anyone else find it
interesting that the UP changed the Trainmaster title (or is it Road Foreman)
to Manager of Operating Practices, also known as MOP's? Is this yet another
example of the insidious MP influence? Hmmmmm?

Great summary Red. The vast majority of the middle to upper level managers I deal with at UP are ex-Mopac.

One minor correction, the only regionals or shortlines that use TCS are the Alcoa shortlines. IC and WC went to the CN system, of course. Tacoma Municipal Belt and Buffalo & Pittsburgh went to RMI. The Mexican roads mostly went to RMI, with the exception of TFM who is now on the KCS system and Ferromex, who is still on Sicotra (the Mexican version of TCS).

TexBob Wrote:
>
> Railroad presidents / CEO's can, and do make a
> railroad, in their own image.

OK folks, is this true? I am not saying one way or the other but here is a list that folks might comment on:

Alfred E. Perlman
D. J Russell
William "Bull" Jeffers
Wilson McCarthy
Alan Dustin
John S. Reed
Patrick McGinness
Robert R. Young
W. Graham Claytor Jr.
Ben Heinemann
Alexander J. Cassett

Comments on any of the above??

J.