Incoming Union Pacific CFO in Search of Additional Efficiencies at U.S. Railroad

Jennifer Hamann is taking over from longtime finance chief Rob Knight in January

By Nina Trentmann for

As she prepares to take over as finance chief of Union Pacific Corp., Jennifer Hamann is scrutinizing the 157-year-old railroad’s operations in search of additional efficiencies.

Ms. Hamann was appointed chief financial officer of the Omaha, Neb.-based railroad on Thursday, succeeding Union Pacific’s longtime finance chief, Rob Knight, who will be retiring at the end of the year.

Ms. Hamann currently serves as senior vice president for finance at Union Pacific after holding previous leadership positions in investor relations, marketing and sales, and as the company’s general auditor. She will continue working alongside Mr. Knight, the company’s CFO for nearly 16 years, before she takes over as Union Pacific’s new finance chief on Jan. 1.

Jennifer Hamann was appointed chief financial officer of Union Pacific Corp. on Thursday. Photo: Courtesy Union Pacific Corp.

Her appointment comes as the rail company, which faces lower freight volumes, is transitioning toward a precision railroad strategy that relies on set schedules and looks to increase efficiency across the network.

The company reported a decrease in business volume by 4% in the second quarter compared with the prior year period. Net income rose to $1.6 billion during the quarter, up from $1.5 billion in the second quarter of 2018.

Under its “Unified Plan 2020” operating strategy, Union Pacific closed some hump yards, where freight trains are broken down into separate cars, reassembled and sent to their next destination, as well as expanded train lengths, Ms. Hamann said in an interview Friday.

“We are going across our network to make [a] detailed analysis,” she said, adding that the company is continuing to look for opportunities to rationalize. Union Pacific idled about 2,300 locomotives as part of the transition plan and is using fewer freight cars to move goods.

Ms. Hamann said she is focused on executing against the plan, which is set to help achieve an operating ratio of 55%—an important financial metric describing a company’s operating expenses as a percentage of revenue—and deliver a more reliable service to its customers.

“We see limited deviation from current initiatives championed by [Rob] Knight, including the push for a 55% operating ratio,” Brian Ossenbeck, an analyst at JPMorgan Chase & Co. wrote in a note to clients.

During his tenure as CFO, Mr. Knight said he worked on bringing that ratio down. It stood at 87% when he took over as CFO in 2004, the worst in the railroad industry, he said.

In the second quarter ended June 30, Union Pacific’s operating ratio was 59.6%, an improvement of 3.4 percentage points compared with the prior year period.

Before the launch of Unified Plan in October 2018, Union Pacific in May 2018 announced changes to its capital structure by increasing its targeted ratio between net debt and earnings before interest, taxes, depreciation and amortization to 2.7 times, up from its historic average of around two times, according to Mr. Knight.

The company also plans to buy back $20 billion of its own stock through 2020.

Ms. Hamann is inheriting a team of around 500 finance staff from Mr. Knight. During the coming months, Ms. Hamann, a former auditor, said she would spend time familiarizing herself with Union Pacific’s accounting group, its real-estate assets and its tax department.

“The move was not unexpected as Mr. Knight had talked openly about reaching the tail end of his career over the last two years,” Citigroup Inc. analyst Christian Wetherbee wrote in a note to clients. “We view incoming CFO Jennifer Hamann as a clearly planned successor,” Mr. Wetherbee said.

Write to Nina Trentmann at

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