The move to merge Union Pacific Railroad and Norfolk Southern Railroad made progress recently, the two companies said, as the Surface Transportation Board rejected applications to dismiss the merger.
Union Pacific Corporation and Norfolk Southern Corporation said the merger is moving forward now that two milestones have been passed. The milestone pave the way for the two railroads to become the country’s first transcontinental railroad.
The STB unanimously denied applications by the merger’s opponents to dismiss the merger application. That rejection means the board can continue its review of the merger analysis in support of the rail transaction. The facts as evidenced in the application are clear, the companies said, a seamless, coast-to-coast railroad will provide customers with more efficient and affordable freight transportation options and will remove more than two million truckloads from American highways.
The companies also said the International Association of Sheet Metal, Air, Rail and Transportation’s Railroad Mechanical Department (SMART-MD) has entered into a jobs-for-life agreement with the railroads, a move the companies said protects represented jobs and preserves work opportunities. The agreement means more unions representing the two companies support the merger than oppose it.
“The momentum behind this transaction continues to build, and we are ready to keep moving forward,” Union Pacific CEO Jim Vena said. “As we said at the beginning: this merger is all about increasing growth and competition. It’s good for our employees, customers and America.”
As part of the companies’ application, every employee with a union job when the merger is approved will continue to have one for life. Additionally, the application said Customers will gain access to a faster, less expensive cross-country railroad, all existing gateways will remain open, the merger will create seven new premium intermodal lanes, as well as convert 10,000 existing interline lanes to single-line service, and the combined company will offer Committed Gateway Pricing to allow more customers to share in the merger’s benefits.
“The STB’s decision marks another important step in bringing Union Pacific and Norfolk Southern together, and we welcome the opportunity to continue sharing the many benefits of this transformative transaction,” Norfolk Southern President and CEO Mark George said. “The combination will create new opportunities for customers across merchandise, bulk and intermodal markets through a more connected, efficient rail network. As the process moves forward, we are glad to add SMART-MD to a growing list of labor supporters, helping to ensure that we will grow together while protecting opportunities for railroaders.”
The transaction remains subject to STB review and approval.