Davidson, Richard K. 1942–
Richard K. Davidson
Chairman and chief executive officer, Union Pacific Corporation
Born: January 9, 1942, in Allen, Kansas.
Education: Washburn University, BA, 1965.
Family: Son of Richard Davidson (farmer) and Thelma Rees; married Trish (maiden name unknown); children: three.
Career: Missouri Pacific Railroad, 1960–1966, brakeman and conductor; 1966–1975, assistant trainmaster and various operating department positions; 1975–1976, assistant to vice president of operations; 1976–1982, vice president of operations; Union Pacific Railroad, 1982–1986, various management positions; 1986–1989, vice president of operations; 1989–1991, executive vice president of operations; 1991–1997, president, CEO, and chairman; Union Pacific Corporation, 1997–, CEO and chairman.
■ After a career in the railroad business spanning almost 40 years, Richard K. Davidson became chairman and CEO of Union Pacific Corporation, the United State's leading railroad freight carrier, in 1997. Davidson strove to maintain the railroad's heritage while continuing to modernize and move the company into the future. In 1997 he brought Union Pacific through a much-publicized shipping crisis. As a result of Davidson's investment in technology and focus on customers, the company not only recovered but also thrived. A straightforward Midwesterner with humble roots, Davidson's philosophy centered around the concepts of continuous improvement and solid customer service.
WORKING ON THE RAILROAD
Davidson began his railroad career in 1960. His father had died in 1948, when Davidson was six years old, leaving the family with little money. To pay for college, Davidson took a night and weekend job as a brakeman at a Missouri Pacific railyard.
One of Davidson's most influential mentors was Downing Jenks, the Missouri Pacific chairman. After a huge flood hit Texas, Davidson was up to his waist in water, trying to fix a piece of washed-out track, when Jenks came and stood by his side. "That really set a tremendous leadership example of how you get out and just prove to everybody that you're willing to work as hard as or harder than anyone else in the company," Davidson recalled in Chief Executive (January 1, 2004).
In 1966, after graduating from Washburn University in Topeka, Kansas, Davidson accepted a position as an assistant trainmaster with Missouri Pacific in Shreveport, Louisiana. At the time, the railroad was trying to modernize. Davidson helped oversee the railroad upgrade, which was completed in 1971. Davidson was transferred to the company's headquarters in St. Louis in 1975 to assist the vice president of operations, Jim Gessner. When Gessner left in 1976, Davidson, age 34, was promoted to his position. He joined Union Pacific in 1982, when the company merged with the Missouri Pacific and Western Pacific railroads.
In 1987 the Union Pacific president, Mike Walsh, asked Davidson to oversee the implementation of a new corporate philosophy based on the tenets of customer satisfaction and continuous improvement, a philosophy Davidson carried with him throughout his career. He was appointed president and CEO of Union Pacific Railroad in 1991. Only seven weeks later he was named chairman and CEO.
A TRAIN WRECK
In 1997, just after he was named chairman and CEO of Union Pacific Corporation, Davidson was faced with a massive shipping crisis. Labor and locomotive shortages, a string of accidents, and a messy takeover of the ailing Southern Pacific railroad had left Union Pacific trains in gridlock. Coal was not transported to utilities, grain sat rotting in the Midwest, and cars bound for Texas wound up in California. The situation was called, aptly enough, a "train wreck" and was one of the worst transportation crises in U.S. history. All in all, the logjam cost Union Pacific customers $2 billion. The company's stock dropped by nearly half between 1996 and 2000. But Davidson was not afraid to face his critics. He traveled around the country, assuring investors and Wall Street analysts that the company would recover and, even thrive, when people began to realize the benefits of the merger.
Such straight talk was a hallmark of Davidson's persona. A simple man with straightforward values, he preferred hunting quail to attending cocktail parties. "You look at the other CEOs out there and a lot of them are accountants or lawyers," Davidson told Chief Executive. "I think it's just my good fortune that I know what I am—a son of toil."
BRINGING ABOUT A UNION PACIFIC RECOVERY
To deliver his promised recovery, Davidson knew that he had to lure back customers. He spent $2.8 billion updating the company's computers and other information technology systems and funneled hundreds of millions of dollars into capital projects. He also decentralized the company, transferring operational power from Union Pacific headquarters to three regional offices and 22 service divisions reporting to those offices. As part of his commitment to customer satisfaction, Davidson rolled out dozens of new services, including the 1-5 Corridor, which expedites freight along Interstate 5 from Seattle to Los Angeles. For a man accused by many of having no vision, Davidson did a lot of forward thinking.
In 1998, just one year after the crisis, Union Pacific cars were rolling smoothly again. In 2002, although the U.S. economy continued to falter, the company had one of the best years in its history. The "33,000-mile factory—with no roof," as Davidson referred to his company in Railway Age (January 1, 2003), was growing steadily. By the end of 2003 Union Pacific stock was back up to $65 a share.
Despite his rise to the top of the railroading industry, Davidson never forgot what brought him into the business in the first place. "I still get emotional when I get on a locomotive and listen to those turbochargers kick in," he told Time magazine (August 23, 1993). Davidson was due to retire in 2006, and by 2003 he had already started the search for his successor.
In addition to his positions at Union Pacific, Davidson served as the chairman of the Greater Omaha Chamber of Commerce, as a director at Creighton University, and as a member of the boards of the Kroger Company, the Boy Scouts of America, and the Capitol Visitors Center. He also served as chairman of President George W. Bush's National Infrastructure Advisory Board.
See also entry on Union Pacific Corporation in International Directory of Company Histories.
sources for further information
Frailey, Fred W. "Union Pacific and Its Comeback Kid," Trains, November 1, 1998, pp. 24–27.
Galuszka, Peter. "Back on Track," Chief Executive, January 1, 2004, pp. 53–55.
Sidey, Hugh. "Hugh Sidey's America: Back at Full Throttle—Leaner, Cleaner, Tougher and Better Managed, America's Freight Train System Is Becoming Competitive Again," Time, August 23, 1993, p. 52.
Vantuono, William C. "Railroader of the Year: Union Pacific's Dick Davidson—Managing a 33,000 Mile Factory—with No Roof," Railway Age, January 1, 2003, pp. 29–41.