This is definitely the results of a woodpecker going around the tree and damaging the water uptake of the tree.  Unfortunately there is nothing you can do about the damage and it's really hard to discourage the birds from doing this.  It appears to maybe last years damage, so if the tree still has green leaves on it then maybe there is a possibility that it will survive.  It won't spread to other trees, but usually the tree might be stressed enough that diseases could come in and attack it more.  I would suggest that you just water the tree as best you can, and hopefully it will come through.  

Thanks so much! That is very helpful to know!