OMAHA -

FOR RELEASE: August 1, 2001

General Motors Selects Union Pacific As Lead Western Transportation Provider

OMAHA - Union Pacific Railroad announced today that it has been selected by General Motors Corp. as its lead rail transportation provider in the western United States.

The new strategic partnership calls for Union Pacific to handle all of General Motors' finished vehicle traffic in the West totaling more than 2.5 million vehicles annually. Under the agreement, UP will expand its GM service to Southern California, Arizona, New Mexico and Oklahoma as well as to locations in Minnesota and the upper Midwest. Union Pacific Railroad, a subsidiary of Union Pacific Corporation , currently transports 75 percent of General Motors' western finished vehicle business, which includes production at three plants in Mexico.

Under the multi-year agreement, Union Pacific will build or expand seven vehicle distribution facilities, make other facility improvements to permit around-the-clock vehicle unloading at all facilities and install a new, state-of-the-art vehicle management system at each location.

"We appreciate GM's confidence in us and we are totally committed to meeting their order-to-delivery goals," said Dick Davidson, Union Pacific Chairman and Chief Executive Officer. Union Pacific and General Motors share a business relationship that spans more than 50 years. "Our new strategic partnership takes this relationship to the next level," said Davidson.

Ike Evans, Union Pacific President and Chief Operating Officer, added that "our strong rail franchise and our leading edge technology that is already in place along with our well-established commitment to quality improvement initiatives will help us meet the ultimate goal of reducing the time it takes to deliver vehicles to General Motors' dealers and customers, while increasing reliability."

Harold R. Kutner, Group Vice President, Worldwide Purchasing and North American Production Control & Logistics for General Motors said, "A priority at GM is to provide fast and reliable vehicle delivery to our dealers and customers. This new partnership will help us achieve these goals, which serve as the foundation of our order-to-delivery initiative."

Through the first six months of this year, GM has already slashed the time it takes to deliver vehicles from plants to dealers in the U. S. from 15 days on average to 10.5. Due in part to the successful launch of Vector SCM as GM's lead logistics services provider, this has resulted in lower automobile inventory in transit and reduced distribution costs.

Union Pacific Corporation is one of America's leading transportation companies. Its principal operating company, Union Pacific Railroad, is the largest railroad in North America, covering 23 states across the western two-thirds of the United States. A strong focus on quality and a strategically advantageous route structure enable the company to serve customers in critical and fast growing markets. It is a leading carrier of low-sulfur coal used in electrical power generation and has broad coverage of the large chemical-producing areas along the Gulf Coast. With competitive long-haul routes between all major West Coast ports and eastern gateways, and as the only railroad to serve all six gateways to Mexico, Union Pacific has the premier rail franchise in North America. The Corporation also owns Overnite Transportation, a nationwide less-than-truckload carrier, and Fenix, a group of affiliated technology companies.

For further information, contact John Bromley, Union Pacific, (402) 271-3475 or David Barnas, General Motors, (313) 665-3170.