Rail Merger Would Cost State 1,940 Jobs : Transportation: Union Pacific’s purchase of Southern Pacific would mean cuts in S.F. but yard expansion in Colton.

Union Pacific Corp. said Thursday that its proposed $3.9-billion purchase of Southern Pacific Rail Corp. would eliminate 1,940 jobs in California, mostly administrative and management posts in Southern Pacific’s home city of San Francisco.

Indeed, Southern Pacific’s historic headquarters building in San Francisco would be closed after the railroads merged, according to a filing Union Pacific made with the Interstate Commerce Commission, which must approve the deal.

But Union Pacific also said it plans to spend nearly $95 million to enlarge its big rail yard in Colton, about 50 miles east of Los Angeles, and its container-transfer facility, which serves the ports of Los Angeles and Long Beach.

Union Pacific overall would eliminate nearly 3,400 jobs, or 6.3% of the two companies’ combined work forces of 54,000 people, with most of the remaining cuts coming in the Denver area, where Southern Pacific’s rail operations are based. The job cuts in California would amount to 24% of their combined 7,900 employees in the state.

The proposed merger would create the largest freight railroad in North America, with 31,000 miles of track operating in 25 states, Canada and Mexico. It would have combined revenue of more than $10 billion.

Union Pacific, a Bethlehem, Pa.-based concern whose rail operations are based in Omaha, said the job cuts and other eliminated redundancies would save the company more than $750 million after the merger is completed.

“The merged system will have shorter routes, expanded single-line service, faster schedules, more frequent and reliable service and improved equipment supply,” the ICC application says.

Union Pacific also asserted that the merger would “greatly intensify rail competition for shippers throughout the West, and Southern Pacific shippers will also gain the assurance of long-term, high-quality rail service.”

Southern Pacific’s 11-story headquarters building was built in 1916-17, and at the time was considered an architectural marvel. When it opened in 1917, it was the largest office building west of Chicago in terms of square footage, Southern Pacific spokesman Mike Furtney said.

The filing did not indicate whether the Southern Pacific name would be eliminated under the merger.

Southern Pacific agreed to be acquired by Union Pacific last August. The next month, Union Pacific bought 25% of Southern Pacific’s stock for $25 a share, or $976 million, through a tender offer, and those shares are being held in trust pending the government’s approval of the full purchase.

Union Pacific’s 8,100-page application fills 14 volumes and stands nearly 18 inches tall. The company called it the “most extensive rail merger plan ever filed with the ICC” and said it hopes the agency will announce its decision by next August.