Contact: Chad Kolton                                                                       October 20, 2010

202-789-4365

ckolton@hdmk.org                                                                                                

UNION PACIFIC’S NATIONAL AD CAMPAIGN SHOWS SENATE REPORT WAS CORRECT

Commerce Committee Report Found Railroads’ Understate Profitability to Block Pro-Consumer Reforms

WASHINGTON – Flexing its financial strength as one of the most profitable industries in the country, Union Pacific railroad has launched its first nationwide ad campaign in more than a decade.  The campaign further validates a Senate report issued last month that concluded the railroad industry underplays its profitability to the government in order to block rail reform efforts that would help American farmers and small businesses.

“It is absurd that the railroad industry has money to burn on expensive nationwide ad campaigns, even as they tell Congress that they lack the money necessary to upgrade their own systems,” said Glenn English, Chairman of Consumers United for Rail Equity (CURE), a coalition of freight rail customers seeking changes in federal law to allow for more competitive railroad pricing and reliable service. 

According to the Senate report, Union Pacific CEO James Young testified before Congress in 2009 that “our industry is only investing about half the level DOT studies say is needed to meet the demands on freight rail in the future.”

“This ad campaign is more evidence of how the railroads try to have it both ways.  They plead poverty to government officials in order to save the special treatment given to them under the law; yet they turn around and use their massive profits to pay for stock buybacks and expensive ad campaigns,” said English

The Senate Commerce Committee concluded that the railroads are some of the "most highly profitable businesses in the U.S. economy," but found a consistent pattern over the past several years of the railroads downplaying their success to the federal government in order to preserve regulatory protections.  The railroads then use these protections to extract excessive rates from American businesses and farmers.  A full copy of the Senate report can be found on the Senate Commerce Committee website: http://commerce.senate.gov/public/?a=Files.Serve&File_id=154d36ff-af01-428d-80c0-14e32563b31d

For more information about CURE, please visit www.railcure.org.

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