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Railroad owners and executives are destroying their own businesses

I've been watching this whole thing unfold with the rail strike, and my brain is just like ERROR:CAN NOT PROCESS. Any competent business owner or business school professor will tell you that training employees is expensive. And the training requirements in the rail industry, even for an entry-level track maintenance worker, are huge. That, coupled with the fact that experienced employees are more productive than new hires, means that turnover is ruinously expensive for such a business. Railroads already aren't able to recruit and train new personnel as fast as they're leaving. And in typical fashion, they're pushing the workers they have left to do more and more. “Our entire industry is being pinched by a labor shortage. Hey, let's screw over the workers we do have, and make sure nobody else wants to work for us!” Brilliant business strategy. And this business of net profit-taking over 25%? WTF? IMHO…


I've been watching this whole thing unfold with the rail strike, and my brain is just like ERROR:CAN NOT PROCESS.

Any competent business owner or business school professor will tell you that training employees is expensive. And the training requirements in the rail industry, even for an entry-level track maintenance worker, are huge. That, coupled with the fact that experienced employees are more productive than new hires, means that turnover is ruinously expensive for such a business. Railroads already aren't able to recruit and train new personnel as fast as they're leaving. And in typical fashion, they're pushing the workers they have left to do more and more.

“Our entire industry is being pinched by a labor shortage. Hey, let's screw over the workers we do have, and make sure nobody else wants to work for us!” Brilliant business strategy.

And this business of net profit-taking over 25%? WTF? IMHO anything over 10% is toxic to a business- profits over that should be getting plowed back into the business. And the rail industry has a HUGE backlog of capital needs that aren't being addressed. Just trivial stuff- bridges, rails, ties- you know, the ones that carry train cars- and often entire unit trains- full of dangerous chemicals. Hazards aside, the cost of ONE derailment with a HAZMAT cleanup is astronomical. Nope- gotta take those profits out of the business to keep the short-sighted investors happy and justify the C-level Exec's salaries. They are bleeding their own companies white.

This is the same kind of epic mismanagement that destroyed General Electric. I'll let you Google for yourselves how GE went from being the largest and most profitable company on the planet to having a market cap lower than Starbucks or Nike.

Please, railroad owners and execs, for your own self interest- and your fiduciary duty to your shareholders- spend whatever it takes to retain current employees and recruit new ones. And start plowing some of those profits back into infrastructure. Or your railroad will end up just like GE.

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