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On the Line: Union Pacific CEO Jim Young

Thursday, 19 Jul 2007 | 7:44 PM ET

Something has happened to rails over the past couple of years. After spending decades out of the Wall Street limelight, the sector is seeing some spectacular growth.

Union Pacific CEO
On the line with Jim Young, Union Pacific chmn., president & CEO and Mad Money's Jim Cramer

Cramer’s on board. His charitable trust owns Union Pacific. UNP Chairman, CEO and President Jim Young dialed in to give his perspective on what’s been happening in his company and the sector as whole.

“It’s only been in the past two or three years that we’ve actually started to see that the overcapacity that existed in the rail industry now has tightened up,” Young said. “You combine that with good old supply and demand that says we’ve got some capability to increase prices, and you also look at congestion on highways, where it’s pushed more demand to the rail roads.”

Union Pacific might be part of an Old World industry, but it’s quick to put the latest technology to work if it will increase capacity.

“Before we put a dollar…into the ground,” Young said, “we look at process and technology. And there are a lot of examples where you can get more out of current equipment in the ground and assets and turn it much quicker.”

“Listen to me,” Cramer said, “that stock is not done going higher.” Cramer gives the entire rails sector two thumbs up.

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