Getting Union Pacific Back On Track

Drew Lewis hit bottom just 10 months ago. After launching a nasty takeover fight for Santa Fe Pacific, the crusty, sometimes caustic chief of Union Pacific checked himself into an alcohol treatment clinic. Largely without him, UP lost the fight--and the No.1 position in railroading--to rival Burlington Northern.

Now sober, Lewis is back. On Aug. 3, he said he would pay $5.4 billion in cash, stock, and debt assumption for Southern Pacific Rail, a deal that would make UP No.1 again. Lewis personally cut the terms with Philip Anschutz, the hard-nosed Denver billionaire who owns 31% of SP. And the deal will be his legacy. After turning 65, he will cede the CEO's post to UP rail chief Dick Davidson at yearend 1996.

Lewis first gained notoriety as President Reagan's Transportation Secretary, when he helped bust the air-traffic controllers' union. Although tough, Lewis gets points from his aides for effective delegation. Indeed, after cutting the SP deal, he slipped away to go fly-fishing, leaving his staff to wrap up the odds and ends.

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