(The following story by Alexandra Sukhomlinova appeared on the Gillette News-Record website on January 23, 2009.)
GILLETTE, Wyo. — At least 43 people have been furloughed by railroads in Gillette as the companies prepare to face the recession.
The furloughs came despite record coal shipments out of Campbell County in 2008.
Both Union Pacific and BNSF Railway struggled with any definitive strategy for this year as they totaled their profits from 2008. Both are facing the same uncertainty with the new administration as utilities and coal producers, and their furlough announcements illustrate that Wyoming is not immune to recession.
“Like many other companies, BNSF is being impacted by current economic conditions,” said Gus Melonas, BNSF director for public affairs. “Traffic volumes have declined recently and are not anticipated to improve in the near term. As a result, BNSF railroad will furlough certain employees that are directly involved with the movement of trains in several cities around the country.”
He added that the number of furloughed employees may vary from location to location because employees can move within the system based on their seniority.
BNSF has furloughed 43. Nebraska-based Union Pacific started reducing its staff by 4 percent in 2008, although it hasn’t announced a specific number or where those employees are located. The decision is meant to “better align …workforce with demand,” said Dennis Duffy, executive vice president for operations for the company.
“It is our intention to get these folks back to work in the future, but that will be driven by volume,” Duffy said in the earnings report Thursday.
Coal shipments out of southern Powder River Basin comprise 70 percent of the total coal shipments for Union Pacific, and the company expects continued demand for Powder River Basin coal this year although coal analysts predict production cutbacks in the basin.
But even with such high hopes for Wyoming coal, the company still plans to continue furloughs.
“If you look at our coal numbers, coal had record shipments over the course of the last year. But the industry as a whole and the economy as a whole had a dramatic impact,” said Tom Lange, director for railroad operations for Union Pacific.
Increase in shipments will depend on new jobs, but no one knows how soon that will happen with the new administration, company executives said Thursday.
“With economic indicators over the past few months and uncertainty about how quickly the new administration can get their plans in place, let alone how quickly those plans will have an impact, an honest assessment of 2009 is that at this point we probably have more questions than we have answers,” said Jack Koraleski, executive vice president for marketing and sales for Union Pacific. “It seems likely that an economic stimulus bill will be coming. Ultimately the key to strengthening demand is job creation.”