Union Pacific CEO: Prospect Of Regulations Concerns Investors
June 22 2011 - 2:28PM
Dow Jones News
The chief executives of CSX Corp. (CSX) and Union Pacific Corp.
(UNP) warned Wednesday that the industry would scale back hiring
and infrastructure spending if shippers succeed in pushing through
tighter regulations.
CSX CEO Michael Ward, speaking at a hearing by the federal
agency that regulates the industry, said he has "grave concern"
that proposed regulatory changes pushed by rail customers would cut
into industry profits and scare off investors.
"Any action by this board to limit long-term freight-rail
movements and force the opening of our private networks would
artificially constrain profits and scale down our investment plans
and job creation," Ward told the Surface Transportation Board.
Union Pacific CEO James Young said Wall Street investors have
voiced concerns about the proposed regulations. "Shareholders are
very aware of this proceeding and its implication," Young said.
Rail customers, including farmers, coal companies and
manufacturers, have long argued for tighter regulation of the
freight-rail rates, contending that industry consolidation in
recent decades has left the industry in the hands of a few major
railroads that use excessive market power to charge exorbitant
rates.
-By Josh Mitchell, Dow Jones Newswires; 202-862-6637;
joshua.mitchell@dowjones.com
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