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Opinion
Thomas Black

Union Pacific CEO Goes Off the Rails Chasing Profits

Lance Fritz needs to worry a little more about getting the trains to run on time and a little less about a record operating margin.

Ramming through price increases is a bad look for a railroad that has already drawn the ire of customers and regulators.

Ramming through price increases is a bad look for a railroad that has already drawn the ire of customers and regulators.

Photographer: Bing Guan/Bloomberg

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Union Pacific Corp. is doubling down on its goal of boosting its operating profit margin to 45%, about 5 percentage points from where it’s running so far this year. Rising profit margins are usually a good thing; they keep investors happy and provide cash to reinvest in the business.

But when a company’s service is admittedly poor and customers and the industry regulator are complaining loudly about its business practices, it’s probably not the best time for that company to trumpet its power to drive profits to records.