(The following story by Joe Ruff appeared on the Omaha World-Herald website on September 9, 2010.)
OMAHA, Neb. Pride that workers have in their company right down to wearing baseball caps with corporate logos must be considered during mergers and acquisitions, Union Pacific Chairman and CEO Jim Young told a business group Thursday.
Never underestimate culture, Young said. It almost destroyed our company back in 1996 when we merged with Southern Pacific.
Combining the infrastructure, technology and business cultures of the two railroads was complex and bumpy, and the result was snarled traffic and slowed service, he said.
Companies acquiring other companies need to understand the heritage and pride of longtime employees being integrated into the merged organization, Young told about 150 people at a breakfast gathering of the Omaha chapter of the Association for Corporate Growth.
That was one of the things that we just missed when we were trying to put these companies together, Young said of the railroads. Unfortunately, we learned the hard way. Today, well, were doing pretty good.
The Southern Pacific deal wasnt Union Pacifics only experience with a merger, Young said. The company has undertaken multiple acquisitions, including the Missouri Pacific and the Western Pacific in 1982 and Chicago Northwestern in 1995.
Merging each railroad was a challenge, Young said.
As part of his efforts to communicate, Young holds town hall meetings throughout the year with employees across the system. Most recently, he was in Addis, La.
When I get out to the field and I see someone with their Southern Pacific hat on, or their Missouri Pacific hat or Chicago Northwestern, I try to say, Next time you get your paycheck I want you to tell me what is on that paycheck. It says Union Pacific.
And they kind of smile and laugh. You want to be respectful of culture but you also have to make certain you get people focused on a common goal.
The common goal at Union Pacific is service, Young said.
The largest railroad in the country, Union Pacific has huge construction and technology divisions, Young said, but ultimately its job is to move other firms goods across its 23-state network. Its customers include companies that produce food, automobiles, computers, televisions, steel, lumber, rocks and coal.
What I tell our folks: We sell service, Young said.
Different corporate cultures and even regional differences among people require flexible managers able to respond to what motivates individuals in a company, Young said.
Learning how to do that takes years, he said, with repeated communications and backing up words with action that matter to employees, including clean facilities in which to work.
