Businesses across the U.S. economy have been rushing to consolidate under the permissive regulatory environment ushered in by President Trump’s second term. That includes tightly regulated industries like utilities, where NextEra’s $67 billion proposed merger with Dominion Energy faces layers upon layers of regulatory and political hurdles.
In most sectors, the Department of Justice (DOJ) and Federal Trade Commission (FTC) serve as the primary gatekeepers for mergers and acquisitions. Companies planning large transactions that could meaningfully impact competition are required to notify the federal government under the Hart-Scott-Rodino Act. The ensuing antitrust review process is taken up by either the DOJ or FTC. Whichever agency performs that review can sue to block the merger in question, or clear it.
But the freight rail industry is unique. Rather than the DOJ or FTC, the Surface Transportation Board (STB) has the final say over mergers and acquisitions. Congress established the STB in 1995 as a successor to the Interstate Commerce Commission, and while the DOJ and FTC are responsible for determining whether a particular deal violates antitrust law, the STB goes a step further.
In addition to considering the competitive effects of railroad mergers and acquisitions, the STB also conducts a public-interest review. The agency is set to do both in its forthcoming review of Union Pacific’s proposed $85 billion tie-up with Norfolk Southern. The unprecedented megamerger would create the largest railroad company in U.S. history, and indeed the first transcontinental railroad company. (The famed transcontinental railroad built in the 1860s was split between two companies, and only stretched from California to Iowa.) And the fact that the merger has to go through the STB could explain its bumpy path, despite the Trump administration’s clear directive to wave though virtually any merger deal that corporate America thinks up.
A preliminary analysis found that Union Pacific and Norfolk Southern project more than 1,000 layoffs and 500 transfers as a result of the merger.
Union Pacific and Norfolk Southern submitted their prefiling notification to the STB a year ago, followed by their 7,000-page initial merger application in December 2025. Since then, a diverse coalition of stakeholders, consisting of workers, shippers, and rail carriers, has emerged to oppose the merger. This alliance of strange bedfellows is known as the Stop the Rail Merger Coalition, and BNSF, one of the big four Class I freight rail carriers—with the fourth being CSX—and a member of the coalition, has become one of the loudest voices of opposition to the deal. The breadth of this coalition indicates who stands to lose out from the merger: basically everyone but the new rail company. Twenty-two Democratic senators have also urged the STB to conduct a “rigorous review” of the merger.
The STB rejected Union Pacific and Norfolk Southern’s initial merger application in January, deeming it incomplete, and subsequently sending the two railroads back to the drawing board. Although the agency later accepted their revised application in May, it held the proceeding in abeyance, simultaneously ordering the railroads to respond with substantial supplemental information by July 27. It was at that time Union Pacific and Norfolk Southern unveiled “unprecedented new customer assurances” meant to allay widespread concerns about competition, shipping costs, service quality, and accountability.
“The additional data submitted by [Union Pacific] does not change the fact that this would be an anti-competitive transaction between two financially healthy companies, that will raise rates on rail customers and result in higher prices for consumers,” BNSF President and CEO Katie Farmer said in a statement.
The only reason why Union Pacific and Norfolk Southern’s assurances are “unprecedented” is because the merger itself is unprecedented. For its part, the STB has evaluated freight rail mergers under a public-interest standard since inception, as the agency inherited that standard from its predecessor. But following the disastrous consolidation of railroads in the 1990s, the STB formalized its public-interest standard in 2001.
“There is an effective blanket ban on Class I acquisitions, or at least a sufficiently high standard that no one’s tried for 25 years,” Erik Peinert, senior fellow at the American Economic Liberties Project (AELP) and associate professor of political science at Boston University, told the Prospect.
In an October 2025 report he co-authored, Peinert made a compelling case for blocking the merger between Union Pacific and Norfolk Southern. “Because of the clear harms to competition and anticipated regulatory reaction, no transcontinental merger of this kind has ever been attempted—until now,” the report explains. Even at that point, the industry’s consensus on the merger was clear, according to Peinert.
“If Union Pacific buys Norfolk Southern, BNSF is gonna have to buy CSX to survive,” he said. “There may have been a politics of BNSF waiting to see what they were going to say politically or where they were going to come down, but I think that reality was very common knowledge understood in the industry since the very beginning.”
WHEN THE STB REJECTED Union Pacific and Norfolk Southern’s initial merger application, its decision was unanimous. At the time, however, it only had three members. That’s because the Trump administration abruptly fired Robert Primus, one of only two Democratic board members, in August 2025; his term was previously set to expire at the end of next year.
Primus, who later challenged his firing, was terminated less than a month after Union Pacific and Norfolk Southern submitted their prefiling notification to the STB, raising questions about the agency’s independence ahead of its review of the merger. The purported justification for his removal? Primus, a skeptic of railroad mergers and acquisitions, was not aligned with the Trump administration’s agenda. What’s more, Union Pacific has been confirmed as one of the donors to Trump’s $300 million White House ballroom.
“There’s a stench of corruption around this deal,” Peinert told the Prospect. “This is sort of an attempt at corporate bribery to get through what is otherwise an illegal acquisition.”
But industry isn’t the only stakeholder group fracturing in the face of this deal. Labor is, too.
In November 2025, the Sheet Metal, Air, Rail and Transportation Workers–Transportation Division (SMART-TD)—the largest railroad operating union in North America, representing about a quarter of the entire unionized Class I freight rail workforce—reversed course and endorsed the merger after reaching a labor agreement with Union Pacific, despite the fact that the company will have unprecedented leverage over rail workers. According to SMART-TD, the agreement “guarantees that SMART-TD members working in train and yardmaster service will have job protection for the length of their careers.”
SMART-TD President Jeremy Ferguson told the Prospect he is “confident” in the agreement because it “clearly states my members will not be furloughed.”
The union’s decision to support the deal was met with sharp criticism, including from its own rank and file. “Nobody’s seen the jobs guarantee, so if it really was this badass, ironclad thing, why aren’t we getting to see it?” a SMART-TD member who declined to be identified told the Prospect. They also pointed to the divide between SMART-TD leadership and the union’s rank and file, saying that “it’s bigger than just the merger.”
A preliminary analysis by Axios found that Union Pacific and Norfolk Southern project more than 1,000 layoffs and 500 transfers as a result of the merger. The disclosures came after the Brotherhood of Locomotive Engineers (BLET), the oldest rail union in North America, and other stakeholders filed a motion with the STB for the railroads to make merger-related job impact data public.
Ashley Nowicki, a policy analyst at AELP who co-authored the October 2025 report, said the jobs guarantee is akin to a handshake.
“We’ve seen these job guarantees in the past; they usually don’t pan out because there’s nothing forcing the new company to actually abide by these agreements,” she told the Prospect. “Even if people do keep a job, they usually will have to move across the country, or they’ll have to do a job that they weren’t doing before.”
Regardless of whether the jobs guarantee is binding, the industry’s Wall Street–induced lust for precision scheduled railroading would remain intact. Moreover, the new $250 billion freight rail carrier would be even more incentivized to cut costs, starting with the elimination of jobs at transfer stations or hubs.
“Even if you do get these [guarantees] in hard legal language … that doesn’t change the fact that you just put a company in a position where they have an incentive to lay people off,” Peinert said. “They will find other reasons to downsize that don’t technically violate the contract.”
Unions like SMART-TD that view the merger as an inevitability and have since endorsed it appear to be putting the rest of rail labor at a disadvantage. That could give Union Pacific and Norfolk Southern enough leeway to claim that labor supports the merger, despite it being vastly unpopular among most unions representing railroaders.
“We could have made it clear that the railroad workers of this country are against the merger unequivocally,” said Ron Kaminkow, a trustee at Railroad Workers United (RWU) and former brakeman, conductor, and engineer. “Now we got to say, ‘well, the majority of rail labor,’ and it comes across pretty weak.”
He continued: “Whether we win or lose this fight, it’s just one more dagger in the heart of rail labor.”
The STB is expected to unveil a procedural schedule for its review of the merger in the coming weeks.
