Union Pacific Corp.'s (UNP) chief executive, interviewed on Fox Business Network, cautioned regulators Tuesday against tinkering too much with a business model that he says "is working."
Jim Young said the transportation company saw consistent growth in all six of its business segments, from coal to agricultural products, in the first quarter, with major challenges coming from industries tied to construction and housing.
At a time when concerns over capacity and fuel costs have caused businesses to shift to rail from trucking, Young said Union Pacific has put more new capital into infrastructure over the past 10 years than it had in the preceding 30, with an estimated $3.3 billion this year alone.
"You're beginning to see an industry that is starting to report record return on equity, record return on capital and there seems to be a sentiment that there's something wrong with that," said Young, who is also chairman of the Omaha, Neb., company.
"It is working. Let's not get it wrong with regulation. The response will be immediate. It's not an experiment with economics and returns with this industry. ... If we start to reduce profits, you're going to see capital cut way back."
Union Pacific recently its increased its quarterly dividend by 25%, to 47.5 cents a share from 38 cents.
Full story at www.foxbusiness.com
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