Union Pacific and locomotive components manufacturer Wabtec announced a $1.2 billion agreement to modernize the railroad’s AC4400 locomotives, the companies said on Wednesday. The program is designed to begin deliveries in 2027 and, according to the two firms, constitutes the largest investment in locomotive modernization in rail industry history.
The companies outlined expected performance gains from the upgrades. They said the modernized locomotives will cut fuel consumption by more than 5 percent, increase tractive effort by 14 percent and improve reliability by 80 percent. On completion of the order, Union Pacific will have in excess of 1,700 upgraded AC4400 locomotives in its roster.
This agreement marks the fourth modernization contract between Union Pacific and Wabtec. It comes as U.S. rail operators have been accelerating fleet replenishment efforts tied to infrastructure funding enacted under the Biden administration, replacing older locomotives with models described as more fuel-efficient and digitally enabled.
The companies positioned the deal as part of a broader movement to refresh aging motive power across the U.S. rail network by leveraging recent infrastructure investments. The planned improvements - in fuel economy, tractive performance and reliability - are framed as operational gains the railroad expects to realize as units are returned to service in modernized form.
Separately, the announcement included promotional content about stock evaluation tools. It noted that a product called ProPicks AI assesses Union Pacific alongside thousands of other firms using over 100 financial metrics, seeking to identify promising stock ideas based on fundamentals, momentum and valuation. The notice cited past winners flagged by that tool, including Super Micro Computer (+185%) and AppLovin (+157%), and posed the question of whether Union Pacific (UNP) appears in any ProPicks strategies.
Context and implications
The contract represents a significant capital commitment to modernizing existing locomotive assets rather than buying entirely new units. Union Pacific and Wabtec characterized the work as an effort to realize fuel and performance improvements through a large-scale upgrade program starting in 2027 and culminating in more than 1,700 modernized locomotives.