Brooks Bentz: Well, good morning. This is Brooks Bentz for the National Railroad Hall of Fame, and today we are in the home of Dick and Trish Davidson. Dick is – as anybody who is watching this knows – is the retired Chairman and CEO from Union Pacific. And we’re grateful to have the opportunity to interview him for our Spirit of the Railroads Program. So, Dick, welcome. Thank you for doing this with us.

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Richard Davidson: Good morning.

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BB: Good morning. I guess, as any good story, we should start at the beginning, and delve into your childhood, growing up in Kansas, and hear a little bit about the challenges and things you faced getting to the railroad to begin with.

RD: Well, going back, that’s a long ways in my case. Anyway, my brother and I grew up on a small farm, close to a town named Allen, Kansas, which had a population of two hundred. I think it probably still has a population of about two hundred to this day. But anyway, you know, I guess it was, in many ways, my early childhood was great. Growing up on a farm, having horses and all that. But then my dad died in a car accident when I was six, so my brother and I started working at a really young age, you know, to try and help keep things going. My mother had gone to school when she was a girl, and had a nursing degree, so she hadn’t worked, but she did go to work as a nurse after my dad died.

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BB: Was that locally? In town?

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RD: No, it – well, kind of locally. It was fifteen miles away in a town called Council Grove, Kansas. But anyway, you know I guess however you’d characterize it, we grew up in modest circumstances, and – but, on the other hand, when I think back on it, it was a blessing in some respects, because it made me pretty self-reliant and independent, and focused on success -- you know, monetary success, for one thing.  So, ‘cause I didn’t want to be poor. And so I was really motivated to work hard. In fact, when I was fourteen years old, somehow or another I found out that a farmer in Western Kansas, a couple hundred miles from where I lived, wanted somebody to come spend the summer working there, helping with the wheat harvest and farm work.  So I got on a train at about midnight, and – scared to death I wouldn’t get off at the right station, but – about sun up, why, the conductor said, This is it, kid. This is [laughs]. So, anyway, I spent the summer living with the farmer and his wife, and get up every day about daybreak and quit at dark, and, you know, it was a great experience. I learned how to do things, and he trusted me to drive trucks and combines and one thing or another.

I never cashed a check; I sent every single check home, so anyway, that was kind of – oh, and then later, I worked for a rancher named Buster Wheat [laughs].  Colorful guy.  He was a great guy, and a very successful rancher, and – uh – made a dollar an hour, so I would work about fifty hours a week, and Buster travelled a lot because he’d be buying cattle in Mexico or Texas or someplace.  And, the other hired men – he had a number of hired men – they would just go sit in the shade when he was out of town.  It scared me to death, because I always believed in working hard for your money, so I went into the city to see his wife, and her name was Eugene. I said, Eugene, I know Buster’s a smart guy, he’s gonna see not nearly as much work is getting done as should be, but I want you to know it’s not my fault!  I’m working hard.  So, that’s kind of the way I grew up, you know, wanting to do well, and earn my money.

 

BB: So, um, you decide at some point you’re going to go to college, right, and not everybody in your generation who grew up in those circumstances did?

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RD: Yes, that’s true. And I might not have gone to college, actually, except that I got offered a basketball scholarship – a partial scholarship, not a full scholarship by any stretch – to play basketball at Washburn in Topeka. So that kind of was the trigger that, you know, when I realized I wanted to go give it a shot. But even then – and that also triggered me going to work for the railroad, because I knew the scholarship wouldn’t be enough money, and we didn’t have money to – where I could get any help to speak of.  I had to do it myself, so that’s what prompted me to go apply for a job on the railroad.

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BB: And, how did you figure out that that was the right place to go?

 

RD: I really didn’t know, but I knew a gentleman who was a locomotive engineer there, and he said, Dick, I think they’re hiring people, and they’re good jobs. You ought to go look into it. So, I applied and, I don’t know what I was so fortunate to get hired, because I think – I was told – eighteen or twenty people applied, and I think only two of us got hired that year. Then, you had to take an aptitude test and have a back x-ray.

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BB: Right.

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RD: And the thing that – my takeaway from that, they wanted somebody with a strong back and a weak mind [laughs].

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BB: [Laughs]

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RD: But anyway, I was lucky enough to get hired –

 

BB: And you hired on in Kansas?

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RD: In Kansas. Council Grove, Kansas, which was about fifteen miles from where we lived. And back then, they didn’t pay you to get trained, you had to do it on your own.

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BB: Student trip.

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RD: Student trip. So, for I don’t know, a week or two, I just went back and forth and sometimes, I’d get off of one train and get on another one and come right back, slept very little because I wanted to get it done just as quickly as I could. And, uh –

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BB: Was there a yard where you hired on? Or was it too small --

 

RD: Very small.

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BB: A crew change point.

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RD: There was a crew change point. But they were a very small yard there. And, so anyway. And then you had to buy a railroad approved pocket watch. I’ll never forget this. And I had no money at all, so I went to see the jeweler, and I said, Well, they hired me, I need to buy a pocket watch. And he said, Well, I’ve got a used one I could sell you for thirty dollars. And I said, Well, could I pay you over time? And the jeweler said, Yeah, I’ll trust you. [Laughs] So anyway, he sold me a used pocket watch –

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BB: On time.

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RD: On credit! [Laughs]

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BB: Oh, geez.

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RD: But anyway, I was able to pay it off after my first paycheck.

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BB: Do you remember who made the watch?

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RD: Oh, yeah, I’m sure it was an Elgin.

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BB: Yeah.

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RD: Probably. It was size sixteen, I remember. You had to have a certain size, and carry a railroad watch card, and – started every trip within thirty seconds, a standard time, and –

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BB: My first one was a Bulova Accutron that I bought from a conductor on the platform at Grand Central. He came down and he opened up his coat, and he had watches in there –

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RD: [Laughs]

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BB: And it was used. Seventy-five dollars.

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RD: Oh!

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BB: Nineteen seventy, or something like that.

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RD: Oh, you were a kid.

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BB: Take it to the company watch inspector, all of the…

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RD: Yeah, exactly.

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BB: And call in – you had a phone number that you’d call in to verify the time.

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RD: Yeah, well we had a standard clock out where we had the crew change point.

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BB: Yeah.

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RD: But anyway, it was a wonderful experience. You know, the thing that just blew me away was being an eighteen-year-old kid, which – I was one of the first people hired, about – well, since World War II, really, that probably the next youngest person to me – I was eighteen – the next person youngest was probably forty something. So, it was really quite a cultural difference between them. But, they were wonderful people. If you showed you wanted to learn, and work hard, ask questions, why – they would work hard to teach you. And it was – wonderful people. Everybody had a nickname. [Laughs] Dagwood, Hambone, you know [laughs]

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BB: Sure.

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RD: Yeah, it was a great experience.

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BB: Okay, so you’re working out at this small yard, which means you’re probably on the road, mostly, road trains versus yard locals…

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RD: Originally, yes. But they did have yard assignments in Salina, Kansas, which was kind of a detour from the main line, and when I was, I don’t know, twenty years old, maybe, I took time off from college one semester, and worked on a switch-engine in Salina, at night. We’d go to work at, oh, six, seven o’clock at night – I’ve forgot now – back then we still had sixteen-hour days, and we’d normally work fifteen, sixteen hours, and I was trying to go to college at a small school there in Salina called Kansas Wesleyan, and I missed so much school. I’d study hard, I made good grades on my tests, but I missed so much school, they really dinged me. Anyway, I was making quite a bit of money working there with all that overtime, but I finally said, Well, if I’m going to get serious about my education, I’ve got to go back to Washburn. And finished up, which I did.

 

BB: Okay, so when you come out, what’s your thinking at that point? Back to the railroad? Interview with IBM, or Exxon, or…?

 

RD: Initially, I thought I’d go straight into law school after I got my degree. But the more I thought about it, the more I thought, Man. Here, I worked my way through college, because – even though I wasn’t working like in Salina every night, I would always work on weekends and holidays, and once in a while even cut a class and make a trip, because you could make so much money… when it came time to take the law school exam, the railroad said, We need you. We’re not going to let you off. You can’t go. And I thought, Well, you know, maybe that’s not such a bad thing. Because I was tired of working and going to school, and they also started angling the potential to enter the training program as a p0ssibility at that time.

 

BB: Okay.

 

RD: My boss was a guy named Bill Ferrell, who was a train master in Washington, and he encouraged me to apply for the training program, and I – I mean, it was really kind of a struggle, because the union guys would make fun of you – You don’t want to be a manager, you know. Those guys, they’re snakes, you don’t want to do that. One thing and another. So I kind of… and, I was making so much money! Also, you know, six, seven thousand dollars a year back in the sixties was a lot of money.

 

BB: Uh-huh.

 

RD: I thought, Well, I don’t know. But anyway, he finally convinced me. So I drove to St. Louis for the interview, which was a long drive, and –

 

BB: Did you have a car at that time?

 

RD: I did. I did. Yeah, you know I was doing so well financially, I’d bought a very nice car, actually. But I found it to be quite intimidating, growing up in my close town of two hundred people, and Council Grove had three or four thousand, and here is St. Louis, you know, a city of several million people [laughs]. Holy cow, this is daunting.

 

BB: Yeah.

 

RD: And of course, Missouri Pacific had an office building that was twenty-one or -two stories tall. And I -- I’ll never forget, parking was like twenty-five dollars a day, and I thought, Well, that’s highway robbery. [Laughs]

 

BB: Yeah, that’s a lot at that time.

 

RD: It was a lot of money! So, anyway, they didn’t just jump all over me. In fact, they told Bill Ferrell, my – the boss, We’re not sure this kid is what we want. You know, he’s kind of a hay seed from Kansas --

 

BB: [Laughs]

 

RD: That, uh… we think it’d be a mistake.

 

BB: Elitism rears its head.

 

RD: Yeah. Anyway, Ferrell insisted that they give me a chance, so, I went to work as a trainee, in 1965.

 

BB: And how long was the training program?

 

RD: Well, supposedly, it was a year. But – I mean, it was an interesting experience for me because, my first day as a trainee, the railroad had gone on strike. And uh, I walked into the office and the Assistant Vice President of Operations grabbed me and he said, We know you’ve got experience as a conductor and a brakeman. We want you go to Dupo, Illinois, and get on a freight train and go to North Little Rock, Arkansas, -- which was three hundred sixty-five miles – so, anyway, I said, Well, where’s Dupo? [Laughs]

 

BB: Right.

 

RD: So, anyway, I had somebody take me over to the train. I had a traffic guy back there as my brakeman, and a locomotive engineer named Brubaker, who was a Road Foreman of Engineers good guy. And we took off, and we ended up in Little Rock probably, I don’t remember, fourteen hours later, maybe, and I got marooned there for a long time. Little Rock was a big classification yard for the Missouri Pacific, and –

 

BB: Oh.

 

RD: They kept me there as a switchman, or conductor, I don’t remember which, for a while. So, that was my introduction to the training program. [Laughs]

 

BB: So, how long did that go on before you actually got into the –

 

RD: Well, it was just a – Oh, before I got into management? Well –

 

BB: So, the strike –

 

RD: The strike only lasted about a week or so. Then I went back to St. Louis. And the way it worked, you would spend a certain amount of time in every department, like Accounting, and Marketing and Sales, and Operations, Mechanical, and… I spent six weeks in Memphis in the Marketing Department, which was a real revelation for me. And then, a while in the Operating Department in Little Rock, and instead of going back to St. Louis on the weekends, like most trainees did, I would always stay there, and lean on the other departments. Like, if I was in Operations, I would go over to the locomotive shop and say, I want to learn about what you guys are doing, or go to the Engineering Department, and – you know, spending time trying to learn the whole thing, which I think paid off, actually.

 

BB: Sure.

 

RD: And they cut my training program short. After six months, they said, Well, you’re ready to go to work. So, they sent me to Shreveport, Louisiana, for my first job, to a place called Hollywood Yard. And so, I had a vision of this beautiful place that –

 

BB: [Laughs]

 

RD: And it turned out to be just the opposite. We had an old run-down office building that was leaning [laughs] like that [gestures]… and, it was a place where – well, one of my former bosses was actually the train master there, and the men were so – uh – oh, I don’t know, rebellious, or didn’t comply with the rules very well – they fired him! And they moved me in as assistant manager, relieving the guy I used to work for. And, I had a hard time adjusting to it. Because, where I grew up, you believed in hard work, and getting the work done for what you got paid. There, it was a much slower way of life. And it drove me crazy. Because I – we didn’t – they didn’t work the way I wanted them to work. So, we had a lot of differences of opinion for a while.

 

BB: So, how did you deal with that? I mean, I’ve seen these situations –

 

RD: Well –

 

BB: And they’re challenging.

 

RD: You know, I was tough. I dismissed a lot of them. In fact, they had a joint meeting of all the labor unions there, and called my Superintendent and said, You know, you’ve got this crazy kid here that’s being too tough, and we might have to take action if you don’t get him straightened out. So he called me, he said, Good for you. You’re doing the right thing. [Laughs] So, anyway. I wasn’t there very long, they – I stayed six months before I got moved to Fort Worth as a train master.

 

BB: So, in this situation where you disqualified or jettisoned the recalcitrant ones, were you able to recruit new blood in to replace them?

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RD: Oh, sure.

 

BB: And you got people that had a better work ethic?

 

RD: Well, that was the objective, anyway. Get them trained and make them good workers before they got infected by the other people.

 

BB: Right. Well, that’s hard to do.

 

RD: Yeah, it is hard to do, yeah.

 

BB: How do you feel that it went?

 

RD: Well, I mean – it wasn’t perfect by any stretch of the imagination. But I left it better than I found it.

 

BB: Yeah. Is that yard still there, do you know?

 

RD: Oh, I’m sure it is. It’s probably reduced in what they do. General Motors built a brand new plant there in – I’ve forgotten exactly when, in the seventies, I guess. But I think it’s since closed, if I remember right. But, no, I’m sure it’s still there. It’s a – it’s not a principal route for the railroad, but it’s an important route. I mean, trains run from the – that was part of the Texas Pacific at that time. In fact, I wasn’t working for the Missouri Pacific. My first job was on the Texas Pacific, which was about sixty percent owned by the Missouri Pacific, if I recollect. But anyway, trains would depart out of Fort Worth, and go down through Marshall, and Shreveport, and Texarkana, and end up in New Orleans. So, it was an important route.

 

BB: So, you went on, then, to Fort Worth from there –

 

RD: Yeah.

 

BB: Which is a major –

 

RD: A major yard. Yeah, a major yard.

 

BB: Are you train master now? Or are you still –

 

RD: Train master, yeah, working at nights, which drove me nuts, because they had a general yard master who was an appointed job at that time, working daylights, and I was a train master working at night. Anyway, I got accustomed to that. It was – it was good. And then – let’s see, that was 1966, and then in ’66 or early ’67, Mr. Jenks and the company decided to modernize that facility. It was a yard that had been built in 1933, and it still had retarder controlled – retarder-controlled hump yard. Now, you probably don’t know what that is, but we had guys sitting in towers, that when the car would go over the crest of the hill, they would squeeze the axles and slow the cars down, and line the switches to get them to go into the right classification track. So, they decided to modernize the yard, and computerize it, and get rid of the retarder towers. But to do that, we had to shut the yard down, which created such a traffic jam, it was just unbelievable. We had to resort to flat switching the cars at various places and try to keep the traffic flowing. And it was so stressful, that my boss, who was a man named Convers, Connie Convers, had a heart attack.

 

BB: Wow.

 

RD: And, they made me Acting Superintendent while he was recuperating. I was twenty-five or -six years old. And they wouldn’t let him come back because it would have been too stressful. So, they made me the Superintendent. I think I was probably the youngest Superintendent they’d ever had. I think I was twenty-six years old when I became Superintendent. But anyway, we managed our way through it. And, we had a lot of damaged equipment because of – we were having to resort to such makeshift operations, but we finally got it done. It turned out to be a beautiful yard. I’ll never forget, Mr. Jenks brought the Board of Directors down there. We had the grand opening. We had almost no cars to hump at the time they showed up, so we gathered up a bunch of cars in the yard to put on a show for them – [laughs]

 

BB: It – when I started on the New Haven, we at Cedar Hill, we had two, forty-track classification yards, and manual retarders, but they were so old that they would not work with the heavier cars that had come along.

 

RD: Oh.

 

BB: So, we ended up having to use track skates in addition to the retarders, and I’m just curious if you had that, because those things were troublesome. If you didn’t pull them out and drag them through a switch, it made a mess.

 

RD: I do. I’ve seen that. But anyway, when we built the yard, it was a computer-controlled yard. Which was one of the first of its kind in the United States. I think the Burlington built one in Minneapolis or someplace, and I think ours was the second to be built.

 

BB: Yeah, Northtown, I think was the –

 

RD: But anyway, you know, we’d have people keystroke punch cards, and load those in the computer, and that would decide where the cars would go. And the retarders, then, were air-controlled, and we had inert retarders on the pull-out end that were supposed to be weight-responsive, and stop the car, but they didn’t really work very well. So, we ended up using skates also. We had suspenders and belts both.

 

BB: [Laughs]

 

RD: To keep the cars from getting away. But anyway, it worked quite well. We started the work in 1967 if I remember right, and had the grand opening in February of 1971, and, um – when Mr. Jenks visited, we had built a new, nice office building there, and I had a nice office, and he came in and put his feet up on the desk and said, Man, this would be a great job to have. And I thought, Well, I’ve earned it. I’ll be here and enjoy this. So, about a month later I got my notice, they moved me to North Little Rock, Arkansas, as the Superintendent there.

 

BB: So, was that the first time you met Mr. Jenks?

 

RD: No, no. That’s another interesting story. When I was in the training program, in Memphis, in the Traffic Department, they had like a seventeen-inch rainstorm in east Texas. And it washed out a culvert there, and a train was going across, and the railroad collapsed under it. And I think the lead locomotive got across, and then the trailing locomotives and maybe twenty-five or thirty cars went in the drink. Several people got killed, even. Not our – not our employees, but we had some hitchhikers, I guess you’d call them, that were on the cars. Terrible, really. I mean, that was 1965, and it was like 10 million dollars of damage, which was huge in those days. But anyway, Mr. Jenks said, Send all the trainees to east Texas so they can learn how to deal with catastrophes. So, here I go. I didn’t have any rain clothes, or I didn’t have rubber boots, or anything. I was out in the middle of the night with a work train, wading around in water up to my knees. And there was Mr. Jenks, and Mr. Lloyd, the president -- Mr. Jenks was Chairman, Mr. Lloyd was the President – wading out there in the water, too.

 

BB: What time of year is this? Is it cold, or hot, or…?

 

RD: No, it was summertime. Yeah, it was summertime. But anyway, so that was the first time I met him, was maybe one o’clock in the morning, in a flood. I’ll never forget it. I could hardly – [laughs] shake my hand. I thought, Well, there’s a good lesson in leadership. Here we’ve got a catastrophe and the most important guys in the company are down here trying to lead the effort to restore it. I’ll never forget that. And I tried to practice that for the rest of my life. So that was the first time I’d met him.

 

BB: So, he knew who you were after that?

 

RD: He did, yeah.

 

BB: Interesting.

 

RD: Yeah.

 

BB: So, you go off to North Little Rock as the Superintendent. That’s one of the bigger yards on the system.

 

RD: Well, I didn’t have the yard. I had the road territory at that time. Yeah, that ran from – I guess my road territory… let me think of that. I think it ran from St. Louis to Texarkana, and to Alexandria. It was a big territory. It was the biggest Superintendent’s job on the railroad at the time.

 

BB: So, you’re out on the road, riding trains and picking up wrecks when those occurred, and the traditional stuff.

 

RD: Which we had way too often.

 

BB: So how were track conditions in those days?

 

RD: Um – Well, as you probably know, the Missouri Pacific had the distinction of being bankrupt longer than any other railroad in history. I think for thirty-three years, if I remember right. I think it came out in 1958, so – they had a lot of upgrading to do, and we still had jointed rail everywhere. And the joints were battered. Some of the track, we had to slow to forty miles an hour. So, we did have occasional derailments. I mean, when my phone rang at four o’clock in the morning, I knew it wasn’t somebody saying, Let’s go have a beer. It was a disaster somewhere. So, I got my share of experience picking up wrecks. But we started an aggressive program of laying welded rail, and, you know, redressing the issues we had.

 

BB: New ties, and all that.

 

RD: Yeah.

 

BB: And was that something you – was that part of your responsibility then or was that strictly engineering?

 

RD: Well, no. The way the Missouri Pacific operated, the Operating guys had responsibility for the whole thing.

 

BB: Engineering, yeah, mechanical too, right.

 

RD: In fact, I might have – maybe I didn’t mention to you, when I was Superintendent there, a man named Jim Gestner was the general manager, who had come over from the Southern Railroad. And he had a master’s degree in engineering. A very innovative, careful thinking person, that he kind of taught me, instead of kind of shooting first and asking questions later, maybe you ought to think things through and get your aim straight before you do it. So, we did a lot of interesting things, like laying rail at night. You know, if that’s when the trains weren’t running. He came up with the idea that we’d rig up big light towers at night, and so the men would go out there when there was little train traffic and it increased productivity a great deal. So, no, I learned a lot from Mr. Gestner.

 

BB: I know on the N&W, in my time there, we had switched from eight hour days for the rail-and-tie gangs, to four ten-hour days, because it, you know, the time to get out to the site and set up and everything, if it were an eight hour day, you didn’t get as much productivity that you did with a ten hour. Did you do something like that?

 

RD: We did, and we also experimented with working twenty-one days straight, because we used to recruit Indians from the reservation in New Mexico, and we’d get them on a bus, and transport them to the worksite, and work them twenty-one days straight, and then they could have a week off, and go back to their families. Which, that worked well, too. And they were good workers. Dependable.

 

BB: So, after that assignment, what’s next?

 

RD: Well, I actually wasn’t there very long. I think once again, it was only about six months.

 

BB: Oh.

 

RD: And then, I got moved to Kansas City as Assistant General Manager, working for a gentleman named K.D. Hestus who had grown up on the Texas & Pacific Railroad. Rough, tough old boy. Big old Texan. But he and I got along really well. And, the Kansas City territory ran from Omaha, Nebraska, to Fort Worth, I believe, and – this is right in the middle of the Russian wheat movement. You know – you remember when Russia got in so much trouble, and we were exporting. We didn’t have enough grain cars, even. We were loading wheat in coal cars -- open-top coal cars to move it. It was a very busy time. And while I was there, they actually sent me off to Harvard for a management program that lasted about thirteen weeks. So, I felt quite guilty about leaving with so much business going on. But, uh…

 

BB: So, they obviously had designs for you, beyond being the Superintendent, if they’re spending the money to send you to Harvard.

 

RD: They did, and that was even obvious to me, that – you knew if – the Missouri Pacific used to send a person or two to every Harvard program, and you knew if they sent you, you at least had the opportunity to go further.

 

BB: Yeah.

 

RD: So, I… And, when in college, I majored in History and Political Science. I knew nothing about the business aspects of things. It was a wonderful experience being there with one hundred and fifty people that – most of them – were financial people.

 

BB: Yeah.

 

RD: And, so I learned a lot. In fact, my roommate there was from France, and was a principal in a big French company, and he was a business guy. So, you know, when we were having business problems, he was a great guy to bounce ideas off of.

 

BB: So, when they called you up and said, Guess what? You get to go to Harvard! What was the backdrop on that? Did they explain why they were sending you, or…?

 

RD: No… I think that – it was probably just to say, You know, we think you’d benefit from more education. And it was surprising, too, you know – since the Missouri Pacific had been bankrupt for so long, we watched our pennies very, very carefully. Very carefully. But when they sent me off to Harvard, they said, Dick, you forget now that – the way you manage things now, when you go there. You participate, and if you’re entertaining, you entertain, and don’t worry about it. Nobody will criticize you. So, [laughs] it was quite a change. Because we did a lot of entertaining. A lot of – had a lot of fun, as well as working hard and studying hard.

 

BB: Did you get any questions from other people in the program saying, you know, what are railroad people doing here?

 

RD: You bet.

 

BB: Yeah, I’ll bet.

 

RD: You bet. They said, well – in fact they even said, We didn’t know they had railroads anymore!

 

BB: [Laughs]

 

RD: You know, because they quit running passenger trains pretty much, then.

 

BB: Right.

 

RD: And, so anyway, I sent back to the company, I said, Send a hundred and fifty annual reports to me, please. So, I passed them out in the class, you know – and we were a pretty profitable company – to help them change their minds.

 

BB: Yeah, yeah. Interesting. And that’s true of the general public. If you’re not running passenger trains, you’re out of business.

 

RD: Exactly. And that’s not a bad way to be. Flying under the radar is not a bad thing, necessarily.

 

BB: So, did you – you found the program worthwhile?

 

RD: Oh, very much so!

 

BB: And how long were you there?

 

RD: Thirteen weeks.

 

BB: Okay. And then, back to Kansas City?

 

RD: Back to Kansas City. Let’s see, I went to Kansas City in 1971, and then I was appointed general manager in North Little Rock on January 1st, 1974 -- which was a wonderful experience, going back as general manager.  Don Manion was the Vice President of Operations at the time, and Jim Gestner, then, was Assistant to the Vice President of Operations. They had promoted him from Little Rock into St. Louis.

 

BB: So, he was still in your world, as far –

 

RD: Yeah, yeah. I mean, he was a great guy, and I learned a lot from him. Don Manion, on the other hand -- you probably know his son, Don Manion –

 

BB: At Norfolk Southern.

 

RD: Junior was with NS.  Vice President of Operations, I think.  But Mr. Manion had a hard time making decisions. So, he only lasted on the job a couple years, and they moved him up in the administrative job up in the Chairman’s office. And put Mr. Gestner on the VPO’s job. But anyway, I think I might have mentioned to you that one of the really wonderful experiences I had when I was General Manager was that the Missouri Pacific had purchased a small company called Chicago & Eastern Illinois in 1967, I believe, but had really never integrated the railroad into the Missouri Pacific. They still had a separate headquarters in Chicago, and we had our headquarters for that region in North Little Rock, and – the C&EI had a big yard, called Yard Center, that – where the trainmen there were kind of like the inmates being in charge of the jail.

 

BB: And where was that located?

 

RD: It was on the south side of Chicago.

 

BB: And this was MoPac’s (Missouri Pacific) introduction into Chicago?

 

RD: Yeah. Yeah, that’s right. It was a great acquisition, because it – it did. It was access to Chicago. Anyway, it was so bad there – the men wouldn’t show up for work on weekends. And they had to bring management in from all over the system to keep the system going. So, we had this wonderful classification yard in North Little Rock, and we figured out that we could pre-block all the traffic going into Chicago and run solid trains through to the connecting line railroads, or through the intermodal facility in downtown Chicago, or whatever. And, essentially, just totally dried up Yard Center. [Laughs] And, I forgot how many exactly how many now, but maybe reduced fifteen switch-engine shifts. It was just unbelievable. And you could have shot a cannonball into the yard. There was nothing left there! Mr. Jenks was so happy about that, he called and said, I don’t know what you’ve done, but you’ve really made a difference. And, so much so, that they asked me to join the Board of Directors of the Chicago & Eastern Illinois Railroad – they still had a separate board. So, anyway, I’d get to sit around the table with all these important people, and [laughs] just hope I wasn’t embarrassing myself too much.

 

BB: So, you know, I – if I put myself in your shoes, I’m wondering, Well, I’m on the C&EI. How do I get everybody – you – ‘cause you had to make some changes in North Little Rock, right, too?

 

RD: We did, yes.

 

BB: And were they accepting of that, and they -- that went through smoothly, or – I mean –

 

RD: No, it did. I mean, one thing I learned running a big yard – and I learned this at Fort Worth – everybody on the outside of that yard wants you to make classifications for them.

 

BB: [Laughs] Right.

 

RD: And I learned, one way to figure out how badly they really needed it was to just quit doing it and to see who would start complaining. So, we took away some blocking we were doing for other points, and instead, did the blocking for the C&EI. And we – we didn’t only just integrate the operations; we also integrated the engineering, mechanical, and everything. It was really – really a good practice, you know, for later mergers, because we had all went together very, very well.

 

BB: Okay, so what’s next in line, then, for you? After you got that fixed, right –

 

RD: Got that fixed, and we just made a lot of progress on the – well, we’d also improved the physical plant a lot, too, so we were operating a much safer railroad. And that lasted a little bit less than two years. And then, after Don Manion got moved upstairs, and Mr. Gestner became the VPO, and moved me to St. Louis then as Assistant to the VPO. This was 1976, I think – October of 1976, I moved there.

 

BB: And, and what were your responsibilities and roles doing?

 

RD: It was a maddening job. It was an administrative job, and you were just supposed to take the administrative workload off of the Vice President. And you had nobody worked for you, except your secretary, and you – when you tried to get something done, you just had to speak nicely – or threateningly, whichever way worked best – and try to get other people to buy in what you were trying to do get done to help the VPO. I didn’t like it. I didn’t like the administrative work. I was an Operating guy, and I liked to be out – you know – fixing problems and making things better. But anyway, that didn’t last very long, because once again, Mr. Gessner had a heart attack. I think, if I remember right, January of 1977 – and they wouldn’t let him come back on the job because of the stress. So, they gave him a desk job, and believe it or not, they made me the new VPO. Which, I think –

 

BB: Now, when he went off on medical leave, were you filling that role just ad hoc –

 

RD: Yes, ad hoc. Yeah. But, then, in January of 1976 – yeah, January of ’76, they made me the VPO of the company.

 

BB: That had to be a pleasant…

 

RD: Well…

 

BB: …development.

 

RD: It was mind-boggling, really. It was the last thing I ever expected, but – a huge responsibility. You know, we had, I don’t know. The Missouri Pacific at that time had twelve or thirteen thousand employees, and – it was… it was a good company. We were doing well, and…

 

BB: And Jenks is still running it at this point?

 

RD: He was still running it, yeah. John Maleeg was still the President. And, uh – Manion was still upstairs, shuffling paper [laughs].

 

BB: So, as VPO, what are the things that you – you said you liked fixing problems, so what are the things that you – did you have a list of priorities of the things I want to go and get done while I’m here?

 

RD: I don’t think I was quite that organized, but some of the problems were just so obvious. Along the Gulf Coast we had lots of challenges, because business was growing so rapidly down there in the chemical business, that we really had inadequate facilities to cope with everything. So, we really need pretty aggressive capital spending. Double tracking, and building additional sidings, and – and, back in those days, too, we were fierce competitors with the Southern Pacific. Our routes pretty much overlapped each other in the Gulf Coast Area.

But I actually became good friends with the Vice President of the Southern Pacific at that time, a guy named Alan DeMoss. And we worked out a lot of deals to help each other. I mean, one of the things we did, I think, was fairly innovative in the industry at that time. If we had a major maintenance program going on, and you wanted to increase productivity – if you could get the trains out of the road – you could get a lot more work done. So, DeMoss and I worked it out where we would detour over each other’s railroads when we had a big maintenance effort going on, and then you’d keep track of the train miles, and you’d equalize them at some point. And if you couldn’t equalize them, we had a system where you could true it up with a cash payment. But that really improved productivity for us.

 

BB: Right.

 

RD: In fact, he and I looked – we had parallel routes, like between New Orleans and Houston, so we made a trip over on one railroad and back on the other, ‘cause we were thinking about running directional traffic. Which would be just like double tracking your property without spending any money.

 

BB: Yeah.

 

RD: We didn’t get that done at the time, but –

 

BB: Do you know why?

 

RD: Uh… I forgot. Probably because somebody put their foot on the air hose above –

 

BB: [Laughs]

 

RD: Above DeMoss. I don’t really remember right now what the problem was. But it – I did come up with some ideas about the way to make things better on that trip, and we spent some money and improved things, but – the Gulf Coast stayed a challenge for a long time. It even stayed a challenge up until our merger with the Southern Pacific in 1996.

 

BB: So, MP is doing well, you get into merger talks with the Southern, at one point.

 

RD: Yeah.

 

BB: Were you involved in that?

 

RD: I wasn’t involved in the merger talks, but I knew something was cooking because the President of the Southern was over making trips with us on our railroad, and Mr. Jenks was over making trips with them on their railroad. At that time, a man named Stan Crane was in charge of the Southern. Brilliant guy. I thought the world of him. And, anyway, we came just this close to doing the deal, as I understand it. I think Stan Crane was the guy that told me the story. They were expecting Mr. Jenks to show up at their headquarters to announce the merger, but instead, John Kenefick had called at the last moment, from the Union Pacific, to Mr. Jenks, and made a better deal. A better offer. So, Mr. Jenks didn’t make that trip to the Southern. He made it to Omaha, Nebraska, and…

 

BB: And the rest is history, as they –

 

RD: And I knew nothing about it. It came as a total shock to me when they announced that they were going to merge.

 

BB: And, so – mergers always create this atmosphere of uncertainty for the people who are being merged.

 

RD: I think for both sides, in this case.  Both UP and MP.

 

BB: Yeah. And it wasn’t an acquisition, per se. It was a – it was a true merger.

 

RD: Well… yes and no. I mean, clearly they were the stronger railroad by far. You know, the Union Pacific was a resource-rich railroad. Great route structure. Good physical plant. They were much stronger than Missouri Pacific financially.

 

BB: Yeah. A lot of the Missouri Pacific management ended up in senior positions at UP.

 

RD: Well, I was going to tell you that. Mr. Jenks got several of us together, after the merger was announced, and said, Don’t you guys worry. He says, Rest assured, and I promise you. You will end up running the whole thing. Which is what happened. The Missouri Pacific people all ended up in senior positions there.

 

BB: So, at the outset, you’re VPO of Missouri Pacific. UP has a VPO, and you end up with two for one system. Well – how long was the integration, right? Was –

 

RD: Oh, I wanted to mention that. They immediately consolidated, of course, finance, marketing, all the non-operating functions. But they left me in St. Louis – let’s see, the merger took place in 1982 – and I stayed in St. Louis until 1986, more or less running the old Missouri Pacific. Of course, I’d have to, you know, talk to John Kenefick occasionally. And he’d come down and make trips with us. He was a very – very good guy. Nice guy. But I kind of felt like the Father Confessor for all the Missouri Pacific people, because if they were nervous about what was going to happen to them, and they’d look to me to have all the answers. Of course, I didn’t, but I’d try to be as responsive as I could. And then – when they put it all together, Jerry Davis became the Senior Vice President of Operations, and I was reporting to him then at that time. That was 1986, and it stayed that way until 1989.

 

BB: And how did that work?

 

RD: Well, it worked alright. I mean, I wasn’t – I wasn’t particularly fond of it that way, because people kind of regarded me as a secondary person, and Jerry as – you know, the go-to guy. But, actually, I guess maybe in retrospect it turned out alright, because in 1987, we started a – well, I should – I need to preface that. Drew Lewis came in as Chairman, replacing Mr. Kenefick. And so that was a big change. And Drew, although he knew nothing about the railroad business, did insist that we streamline things, and we got rid of a lot of overlapping jobs, and one thing and another. Which – which needed to be done.

And then they brought in a gentleman named Mike Walsh, who had been at Cummins Diesel and – he’d been a White House Fellow, and a lawyer, and had been a… in the Justice Department. Just, very smart guy. Totally different than anybody I’d ever worked around, though. And he focused pretty much on personnel matters and cultural change. Knew nothing about operations and didn’t want to know. But he looked to me to be his Operating guy, even though Jerry was the senior guy at the time. And he wanted to install a quality program at the railroad. We – that was something that was kind of foreign to us at the time. But he asked me to lead the effort. And of course, I drug my feet, and he said, No, you’re it. [Laughs] So…

 

BB: You didn’t want to do it. You didn’t want to get off the line. Yeah.

​

RD: So anyway, that was a wonderful experience. It was a lot more process-oriented and customer-satisfaction oriented, and it was just a wonderful experience. I learned a lot. We brought in consultants to help us that – a group called Total Quality, that were the Feigenbaums, were the name of the principals of the company. But that went on for several years. And then, in 1989, Jerry left and went to the CSX, Jerry Davis. And they moved me up to the Senior VP role, and of course they didn’t replace my job, then.

 

BB: Yeah, the story as I heard it was that John Snow called Drew Lewis and said, I want to have Dick come down here, and was told either by Lewis or Walsh, You can’t have him. You can have Jerry Davis. We’re keeping Dick here.

 

RD: It – It might have been the way it worked. But I had actually gone to Jacksonville, and met with them, and… would have taken the job. In fact, I went to tell Walsh I was going to go work with CSX, and he said, Well, before you clean out your office, give us an hour or two, and come back over. So, I did, and I come back and he said, Well, Jerry’s going to go, and you’re going to stay. And that wasn’t my intent at all.

 

BB: Right.

 

RD: ‘Cause – Jerry was a great guy.

 

BB: Yeah.

 

RD: We were friends. And he’s still a great guy. But, that’s the way it shook out, so. And then, shortly after that, Drew and Mike Walsh didn’t get along very well. And Drew had a favorite – well, you know the Union Pacific was a conglomerate, actually I should have mentioned that. We owned a big oil and gas company with Champion Petroleum that became UP Resources. And then they’d invested in a big truck company in 1986, overnight transportation.

 

BB: Right. A curious – a curious choice.

 

RD: Very curious. And then we had a hazardous waste disposal company, and an air freight forwarding company, and all kinds of stuff that the Board and Drew Lewis had decided in the mid-80s that the railroad was a dying horse. Threw off a lot of cash, so they bought all these other companies. So anyway, Drew had a favorite that he put in charge of the oil and gas company, a guy named Jack Messman, who – it was clear that Messman would probably relieve Drew. There was one other person in the mix, a guy named White Matthews who was the CFO of the holding company. But it became clear to Mike Walsh that he wasn’t in the running. So, he left in 1991 and went to Tenneco.  I’ll never forget – my daughter showed horses, and I was at a horse show in Tulsa, Oklahoma, when I got a call that said, Dick, would you like to be President of the company?

 

BB: And who did that call come from?

 

RD: Drew Lewis.

 

BB: Oh.

 

RD: And I said, Well, I’m not sure. President of the railroad, not of the holding company.

 

BB: Right, the railroad.

 

RD: I said, I’m not sure. I like what I’m doing right now. I’d been VPO for about fifteen years at that time – sort of VPO, or Assistant VPO, or whatever. Let me think about it a day or two. Because I really wasn’t sure. ‘Cause there was too many other things going along with being the President, you know – social obligations and community involvement, and –

 

BB: Talking to analysts.

 

RD: Yeah, talking to analysts, and trips to New York, and I wasn’t all that fired up about that. But anyway, I said, Oh, I’ll tell you what. I’ll take the job, but if it doesn’t work out, I’d like to be able to come back to what I’ve been doing. They said, Oh, well, that’s okay. I think they knew that wouldn’t happen.

 

BB: Yeah.

 

RD: So anyway, I did take the job, and they made me President of the railroad, as I recollect, in August of 1991. And then, believe it or not, two months later, they made me Chairman. I got two great big promotions –

 

BB: And that – how did that happen, do you…? What’s the back story?

 

RD: [Laughs] I know exactly what happened.

 

BB: Okay.

 

RD: We were supposed to go to Japan and meet with Toyota Motor Company, but the Japanese never want to deal with the second in command. They always want to deal with the first in command. And Drew didn’t want to go. So [laughs] he talked to the board and said, Let’s make Dick the CEO and let him go. So, that’s how that came about. It was a –

 

BB: So, a very formal, rigorous process and selection.

 

RD: [Laughs] Exactly.

 

BB: Yeah. Okay. Yeah.

 

RD: So how did you get along with Drew? He’s in Bethlehem, and you’re in –

 

BB: He’s in Bethlehem, and – actually, initially I got along with him pretty well. He would call just about every Monday and wanted to know how – he didn’t know anything about the railroad – but wanted to know how you were doing on your budget.  And we – fortunately, we were doing pretty well every time, so it was a – normally a pretty pleasant conversation. You may or may not know, but Drew Lewis had a terrible drinking problem, which I did not know at that time. He disguised it very, very well.

So, anyway, it worked out quite well, until – I guess it was 1994, or early ’95 – I had another offer to go to another railroad. And, as I told you, White Matthews and Jack Messman were the clear contenders to replace Drew, and Drew had to retire in 1990 – at the end of 1996, when he got to be sixty-five. So it was getting close, and so I went to Bethlehem and tried to have a very friendly meeting with Drew. I said, Drew, I’ve got an offer, where I’ve got a chance to become CEO of a big railroad.  And, I would rather stay at UP than go if I just knew that I had an equal shot at getting the top job… And I could tell he wasn’t pleased with that conversation. He said, Well, go away at let me think about it a little bit.  So, I came back a few hours later, and he had been drinking. And he said, Well –

 

BB: In the office?

 

RD: Well, somewhere. I don’t know, but he obviously had found a place.

 

BB: Yeah.

 

RD: He said, Well, you can leave, and we’ll make White Matthews president of the railroad. And I said, Okay. So, anyway –

 

BB: That had to not feel like you wanted it --

 

RD: No, it didn’t. I did – I didn’t even want the promise of the job. I just wanted a promise that I had a shot at it.

 

BB: Right.

 

RD: So, anyway, I went to bed that night, thinking that I was going to make a call to the other people and say, I’m coming. And my phone rang about – oh, five o’clock in the morning, I guess, and they said that – we used to hold the board meetings at the Saucon Valley Country Club there, and they said, Can you get dressed and come out to the Country Club? And I said, Sure. Probably an hour and I’ll be there. So, I walk in, and there was the full board. It’s just getting daylight, and Drew, and Drew said, Well, Dick, the board met during the night and made the decision that you’re going to Bethlehem, Pennsylvania, as the president of the holding company, and unless you – and I’ll use a better term than they used – screw up -- you can guess what the vernacular was – it’ll be your job to replace Drew. And I just – I broke down.  I couldn’t believe it.  Because it was a magical change. I mean, the board, obviously, turned Drew around.  They said, you know, You’re making the wrong choice here.

 

BB: Yeah. So, a sensible voice on the board.

 

RD: We did. We had a really nice board.

 

BB: Wow. That’s an early meeting. To get up for a board meeting. They met, what, six – six –

 

RD: They met during the night! They called the board meeting during the night. Without Drew!

 

BB: Uh-huh.

 

RD: And they had him come in early in the morning.

 

BB: And he’s the one that gave you the message?

 

RD: Yeah. Well, I mean, I think he had no choice.

 

BB: And how long did – so you moved to Bethlehem after that?

 

RD: I did.

 

BB: And how long were you there before he retired?

 

RD: Oh, just a little less than three years. Which was time well spent, because the Board asked me to – you know, it was a

holding company, so they asked me to spend my time there learning these other businesses. I mean, we had a big trucking company. The trucking company had 13,000 employees.

 

BB: Right.

 

RD: It was a big company. And the oil and gas company was a big company.

 

BB: Did you ever discern why Overnight was picked to be acquired and –

 

RD: Oh, I know exactly why. The head lawyer at the time was a guy named – oh, Barry. His last name escapes me at the moment. But he – real smart guy. And he said, Well, we need to complete our footprint. We’ve got the big railroad in the eastern part of the United States. And overnight trucking was predominantly – I mean the railroad was in the western part of the States – United States, and overnight transportation was mainly in the East, and they thought there would be a lot of synergy between the two.

 

BB: But you got LTL Trucking, and they –

 

RD: [Scoffs] Oh. It was terrible.  It was just – it made no sense.  And they overpaid for it.  I mean, the company might have been worth four or five million dollars, and they paid $1.2 billion…

 

BB: Yeah.

 

RD: …for it. So it made no sense whatsoever. And the same thing with the hazardous waste company. It was just terrible! And they threw so much money at that thing.  Heck, I’ll never forget, we had a board member come to the Board from Monsanto, chemical company.  Smart guy, and the hazardous waste people got up in the board meeting and said, Well, we want to spend this money, and do this, do that, make a big investment. And he got up and said, You guys are crazy. The hazardous waste disposal business is the worst business in the world to be in. Because chemical companies that create the hazardous waste have to incur such a big expense in how to dispose of it, we’re going to figure out a way to engineer a way out of it, where we don’t create it in the first place. And he was exactly right, a guy named Dick Mahoney. So, that was a lost cause. What they really did, they indebted the railroad. That’s where they got the money to buy these companies, which weren’t producing any profit.

So, anyway, it was – I learned the business real quick. And the Board also said, What do you think your weaknesses are, Dick?  And I said, Well, strategic planning might be one of my big ones. So, they sent me off to a program at Harvard. It was – just was like a week long, or something – and the one thing I walked away from there with, one nugget of wisdom:  holding companies don’t work.

 

BB: Right.

 

RD: You need to stick to your knitting -- what you do well -- and don’t try to do things you don’t do well. So, that solidified my gameplan when I got to be Chairman of the company. I knew exactly what I wanted to do.

 

BB: Well, there was that theory. I think – Harold Jeanine who was…

 

RD: The ITT Corporations.

 

BB: The ITT, who thought you could manage any business if you had good management. It didn’t matter what it was. And, of course, they were a big, multi-faceted conglomerates –

 

RD: Exactly. And that didn’t work either.

 

BB: No, I don’t think it ever proved out.

 

RD: In fact, in the trucking company, they put a guy that had an MBA in to run it, but he was one of these guys that couldn’t make a decision if his life depended on it. So, even before I got to be chairman of the whole company, I said, We need to get somebody over there that knows how to run a trucking company. He said, What are you talking about? He said, An MBA can do anything. I said, Well, maybe if the MBA had worked for a truck company while he was going to college, he might [laughs]. But this MBA’s not cutting it. So, anyway, we went out and found a great trucker to run the company. But there was nothing could be done with it—

 

BB: Was that Leo… Leo Suggs?

​

RD: Leo Suggs. Yeah. Great guy.

​

BB: I worked with him at Ryder.

​

RD: Oh, did you?

​

BB: Yeah, I know him well.

​

RD: Terrific man. Great men.

 

BB: And I asked him, you know, they had that very, very – uh – tense situation with the Teamsters, and he fought them off for, I don’t know, a couple three years.

​

RD: I was right there with him.

BB: Yeah. And I asked him afterwards, I said, You know, UPS buys this company and the first thing they do is hand it to the Teamsters. And he’s like, I [shrugs] – you know. He was really frustrated by that.