Abstract
This chapter examines how Union Pacific Railroad's merger with Southern Pacific Railroad dissolved into a nightmare in which anything that could go wrong did go wrong. The arrival of Jerry Davis put Union Pacific in a unique position. For the first time experienced railroad men headed both the corporation and the railroad. In Art Shoener they had one of the best operating officers in the nation. With Dick Davidson moving quickly to strip away the remaining subsidiaries, the future looked bright. Earnings in 1996, boosted by a full year's contribution from Chicago & North Western Railroad and three months' worth from Southern Pacific, set new records of nearly $8.8 billion operating revenues and $1.53 billion operating income. The troubles began with the weather. Beginning on December 29, 1996, a series of storms blasted the West Coast and wreaked havoc with both Union Pacific and Burlington Northern Santa Fe. Then the accidents began and kept coming—a dozen by October on Union Pacific alone.
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