Warren Buffett, railroads and retraining

News that investor Warren Buffett will buy Burlington Northern Santa Fe got me thinking about employment in an industry that many didn’t think had a future.

After a half century of decline, demand for railroad workers has been rising in this decade. For the past five years, Dakota County Technical College in Rosemount has been training people to be railroad conductors with good success placing them in jobs. Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for minnecon.smallicon.gifIt’s one of only a few public school railroad programs in the country.

Conductors work the rail yards. Duties include moving and coupling rail cars. It’s a tough, demanding job with lots of irregular hours and pressures that can be hard on families.

But it pays well — entry level starts at about $42,000 and can a conductor can earn upward of $70,000 after three years. There are opportunities to work your way up to engineer and a six-figure salary.

We checked in with Larry Raddatz, who oversees the conductor’s program at Dakota County Tech. Demand for graduates took a hit in the recession, he says, but is starting to recover.

For three years, there were more jobs than we had graduates and classes were full. I received calls from RRs all over the country looking for conductors…A manager from a short-line in Chicago visited one of the first classes and offered to take any three of them back with him on the plane that day.

And then the recession hit. Like most industries, the railroads suffered in 2009. They did no hiring until last month. Enrollment (in the DCTC program) was down slightly in 2009 because I was informing students that the RRs were not hiring.

It is slowly starting to pick up again. The Canadian Pacific recently interviewed for 12 conductors in the St. Paul service area. The UP (Union Pacific) recruiter indicated that they will have hiring sessions in early 2010.

There has been a bit more interest lately. Perhaps it is attributable to Mr. Buffett.

In its first years, the program drew mostly men in their 30s and older trying to change industries or simply find work. It was a magnet early on for striking Northwest Airlines mechanics who had skills and were comfortable working around big, rolling vehicles.

The students have become more diverse in age, gender and ethnicity, Raddatz says.

A young woman enrolling in the January class, he adds, had checked into the program for someone else but was intrigued by the job. “She was tired of being on the waiting list for the nursing program so she applied herself.”

Long-term, we are looking at what we can do to respond to industry needs for commuter and high-speed rail. In addition to conductors, DCTC is well positioned to provide skilled employees to the RRs (welding, diesel, electrical, etc.).

It can be a difficult way to make a living. But if Warren Buffett is high enough on railroads to spend $44 billion, the odds are good it’ll mean growth in the business and demand for workers willing to take on the challenges and risks.

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Click here to learn more about the Dakota County Technical College railroad conductor program.

If you’ve been through the program and have some thoughts about it or your career in railroads, contact me directly and I’ll share your thoughts with MinnEcon readers.

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