Union Pacific, Wabtec sign $1.2 billion locomotive modernization deal

Union Pacific (NYSE: UNP) and Wabtec (NYSE: WAB) have signed a $1.2 billion agreement to modernize Union Pacific's AC4400 locomotive fleet, according to a press release statement.

The agreement, signed in the fourth quarter of 2025, covers the modernization of locomotives to improve operational efficiency and fleet productivity. This marks Union Pacific's fourth major modernization order from Wabtec since 2018.

The modernized locomotives are expected to deliver a 5% reduction in fuel consumption, a 14% increase in tractive effort and an 80% improvement in reliability. Each locomotive will receive the FDL Advantage engine upgrade, LOCOTROL Expanded Architecture and new Modular Control Architecture.

"We are committed to delivering the service we sold to our customers and one way we do that is having great American-made locomotives that can get the job done," said Jim Vena, Union Pacific CEO. "These redesigned locomotives will be just like new, providing the improved fuel efficiency and enhanced reliability that we need to grow with our customers and to win new business."

The modernization program will extend each locomotive's useful life and improve fleet standardization. Production will occur at Wabtec's U.S. facilities, with deliveries beginning in 2027.

Once completed, Union Pacific will have more than 1,700 modernized locomotives in its fleet. The agreement builds on Union Pacific's previous 2022 order, which is scheduled to be completed in 2026.

"Our continued partnership with Union Pacific reflects a steady, forward-looking investment that positions the railroad and its customers for continued success," said Rafael Santana, President and CEO of Wabtec.

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