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CEO of Union Pacific: ‘Our team deserves to see a raise’ in labor negotiations

Lance Fritz, Pacific Union CEO discusses labor contract negotiations in the railroad industry. Fritz joined Yahoo Finance Live on July 21, 2022.

Video Transcript

[MUSIC PLAYING]

LANCE FRITZ: From a labor perspective, we're in a pretty good place. And we're also getting to the end of our national round of labor negotiations, which has lasted a long time. And it's a long time coming. Our team deserves to see a raise in the near future. They've got about 2 and 1/2 or 3 years without one.

But the railroads and the union leadership are pretty far apart right now in terms of what we think is an appropriate settlement on wages. So what's going to happen now is the Presidential Emergency Board is going to hear both sides. And then they're going to propose what they think is a reasonable agreement. Then we'll have 30 days to negotiate off that and reach agreement.

I'm hopeful that we will do that. If not, a strike or a lockout could occur. In the current environment, I can't imagine that being a good idea. And if it looks like that's going to happen, Congress has the opportunity to step in and impose an agreement. And, historically, that's basically been what the PEB recommends. Management is looking for is reasonable wage increases that are reflective of what's happened in the economy in 2020, '21, '22, '23, and '24. This is a five-year wage package.

We're also looking for a reasonable modernization of work rules, things that have lasted decades and decades that, really, technology can handle today. We're also looking at a reasonable step in the right direction when it comes to health care. Our health care plan is a Cadillac plan. And what we need to do is continue to take steps towards mainstream plans for large union employers.