Portland, Ore. — In response to rising demand for coal and the need for more railroad cars to carry it from mines to utilities, the Missouri Pacific Railroad has given a $12 million contract to the Union Pacific for the construction of 300 coal hopper cars in the UP car shops here.
This is believed to be the first time in US railroad history that one road will build cars for another. Construction of the cars to the exact specifications of the Missouri Pacific will begin early in January.
The usual-practice is to have railroad equipment built by companies that specialize in producing rail cars and who sell their product to a number of roads.
The Union Pacific brings to its new contract job an expertise in coal car building gained in the manufacture of more than 4,400 coal cars for its own use since 1977 when equipment construction was begun here.
Ongoing demand for new railroad coal hopper cars is underscored by a forecast of the National Coal Association that 243 new coal-fired electric generating plants are to be constructed by 1987. Low-sulfur coal from Western mines -- which more readily meets environmental standards -- is virtually certain to be the major fuel for those plants, thus increasing the coal tonnages carried, especially by railroads serving Wyoming and Montana.
The Union Pacific is one of those roads, and this year its executive expect that total tonnage carried will reach a record for the road of 30 million tons. That's a gain of about 25 percent over the 1979 total of 23.7 million tons.
Some 250 workers at the UP car shops turn out a coal hopper car every hour of every working day, 40 new 53-foot cars a week. Present plans for construction of cars for the Missouri Pacific call for output of 6 cars a day at the start, moving to 8 cars a little later on.
The Union Pacific's investment of $3.3 million in its car-building shops has given it the ability to manufacture many of the items which at the start were purchased from such suppliers as Bethlehem Steel. The shops now make 85 percent of the items that go into producing a coal car.
In addition to open-top hopper cars, the UP also produces the so-called bathtub gondola cars, which get their name from the bathtub shape at the bottom.
The open-top hopper cars to be turned out for the Missouri Pacific will measure 51 feet, 8 inches in length, stand 12 feet high, and be 10 feet, 7 inches in width, with a carrying capacity of 100 tons. In length, the cars for the Missouri Pacific will be sligthly shorter than UP cars.
On Sept. 15, formal application was filed with the Interstate Commerce Commission (ICC) for the acquisition by Union Pacific of both the Missouri Pacific and Western Pacific Railroads. This would create a system running from Chicago to Seattle, Portland, San Francisco, and Los Angeles.
It was emphasized, however, that the award of the contract to the Union Pacific was not based on these merger plans, but was awarded on a strictly competitive bid.
This was the first time that Union Pacific had ever sought an outside customer, but it is expected that other bids will be made in the future.
In addition to the 300 cars to be made for the Missouri Pacific in 1981, the Union Pacific also plans construction next year, for the first time, of covered hopper cars, some 700 of them, for which new jigs and fixtures are already being made.
Annual tonnage hauled is not expected by Union Pacific management to stabilize at the anticipated 30 million-ton level of 1980. By 1985 the road expects to be carrying 45 million tons a year or more.
The anticipated 45 million-ton volume, management spokesmen told the New York security analysts in April this year, "could easily reach 70 million tons by 1985" if the ICC allows construction of a 56-mile link to the Powder River Basinc, "the largest and most rapidly developing coal mining region in the west." The 1979 Powder River Basin tonnage of 40 million tons could easily reach 115 million tons by 1985, the analysts were told.
In addition to being one of America's major coal hauling roads, the Union Pacific is also a major owner of coal reserves, and a mine operator as well. Coal reserves of the Union Pacific total in excess of 12 billion tons and "constitute the third-largest private reserve of coal in the United States," according to a presentation to analysts in Chicago in October. The road also is a partner in four joint-venture coal mining operations in Wyoming.
Tom Lerner, UP shop superintendent, emphasizes that workers in the shop take a great deal of pride in the cars they turn out, which have been called the "Cadillac of hopper cars." Mr. Lerner also said that in his shop "ideas flow from the workers, and many of those ideas help build better cars."