Dive Brief:
- Union Pacific said Monday it would bring Jim Vena, a former executive vice president and chief operating officer at Canadian National (CN), out of retirement to become the railroad's new COO as of January 14.
- Vena was hired to help lead Union Pacific's transition to precision scheduled railroading, as part of its Unified Plan 2020, which was revealed in September.
- "We have been making excellent strides rolling out Unified Plan 2020, and Jim's vast knowledge of the precision scheduled railroading model brings significant experience and expertise that will enhance the work already underway," CEO Lance Fritz said in a statement.
Dive Insight:
The hire isn't just a seasoned industry veteran, but an even stronger signal Union Pacific is dedicated to implementing PSR and reaping the benefits in full.
Vena started his career as a brakeman in 1977, but would rise to leadership roles at CN at a pivotal time for the Canadian railroad. When Vena first became a district vice president for CN's Champlain region in 2005, the late Hunter Harrison was President and CEO of the railroad, helping usher in PSR as an operating model at a Class I railroad for the first time in history.
As a result, Vena had a front-row seat to railroading transformations. Later, he would be responsible for sustaining the operating model's success at CN, first as a regional vice president in 2009 before becoming COO in 2016.
The hire is a boon for Union Pacific, which is gaining true PSR experience without needing to poach from another railroad. Prior to hiring Vena, the PSR talent at the railroad was limited to Cindy Sanborn — a CSX veteran — and a few others in the operations team, according to CEO Lance Fritz.
The lack of executive-level talent available for hire has led some analysts to wonder whether railroads would take extraordinary measures to transition to PSR — such as delaying the roll-out, or pursuing a merger.
Since September, Union Pacific has announced that it will cut 500 jobs as part of the change and expects to gain $500 million in productivity from the new model. But the railroad's decided upon a "phase-in approach" to the transition — a departure from Hunter Harrison's trademark "all-in" approach.
On an earnings call in October, Tom Lischer, executive vice president of operations at Union Pacific, sought to quell some speculation that Union Pacific's version of PSR wouldn't be a full implementation of the strategy.
"Following the announcement of Unified Plan 2020 last month, I have had some — there has been some speculation of what we're doing is a light version of PSR, or that UP is not fully committed to making the changes necessary to achieve PSR benefits," Lischer said, according to a Seeking Alpha transcript of the call. "I can assure you that is not the case."
Tom Lischer, Union Pacific's executive vice president for operations, and Lynden Tennison, executive vice president and chief strategy officer, will report to Vena.
