Union Pacific (NYSE:UNP)
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The head of Burlington Northern Santa Fe said Monday that the U.S. economy is growing at a "modest" pace and the railroad will add jobs and new rail cars and locomotives this year to keep abreast of rising freight volume.
"Clearly, the U.S. is in recovery," Chief Executive Matthew K. Rose said, echoing recent comments from his peers at Union Pacific Corp. (UNP), CSX Corp. (CSX) and Norfolk Southern Corp. (NSC).
Rose said in an interview on the sidelines of a Commodity Markets Council event here that Burlington Northern will hire about 4,000 people in 2012, including train operators and maintenance personnel, and also is expanding its rail capacity with new terminals, rail cars and locomotives. Some of the new hires will make up for job losses from attrition, so the net gain will be lower.
Burlington Northern, which currently employs about 40,000 people, is approaching the two-year anniversary of its buyout by Warren Buffett's Berkshire Hathaway Inc. (BRKA, BRKB) in February.
Rose didn't disclose his railroad's specific plans for 2012 capital spending but said he expects it to be a record year for such spending by the rail industry overall.
Earlier Monday, the Association of American Railroads--the sector's main trade group--announced that major freight railroads are expected to spend $13 billion to enhance their rail networks this year, which it called a record for the industry.
Rose noted that Burlington Northern's recent financial results have been broadly along the same lines as its peers, which he described as robust. From an investor standpoint, however, fourth-quarter results from top U.S. railroads have been something of a mixed bag.
CSX reported a 6.3% increase in earnings earlier this month that nonetheless fell short of analysts' forecasts on relatively soft volume, while Norfolk Southern reported a 19% rise in earnings but fell slightly short of revenue expectations. Union Pacific topped forecasts with a 24% increase in profit, buoyed by a booming business hauling materials to and from new shale-oil drilling sites.
Meanwhile, Rose took the opportunity Monday to squelch any suggestion that Burlington Northern or Buffett had something to do with President Obama's recent decision to block construction of the Keystone XL oil pipeline from Canada to the U.S. Gulf Coast.
Rose acknowledged that Burlington Northern will continue to haul crude that instead might have flowed through the pipeline. But he said the railroad likely would have benefited from the pipeline as well by hauling much of the material needed to build it.
"We stand for more infrastructure of all kinds," Rose said.
-By Jacob Bunge, Dow Jones Newswires; 312-750-4117; email@example.com
-By Bob Sechler, Dow Jones Newswires; 512-258-1690; firstname.lastname@example.org