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Railroads could falter without major investment

WASHINGTON – A Congressional committee was told this week that the railroad industry could falter without a significant investment in new freight cars and other capital goods.

Wall Street financial analysts said that investment in railroad stocks would be jeopardized if they don’t start doing better. In the past decade, railroad stocks have trailed the performance of the Dow Jones.

The meeting was held to assess the overall health of the nation’s railroad industry, and subsequent meetings will address problems arising since the railroads were deregulated in 1980, as well as trouble created by a recent round of mergers. Congress has not held such a comprehensive round of hearings on the rail industry in more than a decade.

Congress was told that coal is the largest source of traffic, accounting for 40% of volume and 22% of industry revenues. Seventy percent of new cars are also shipped by rail as well as 75% of chlorine, a key ingredient in plastic.

It was also revealed that railroads saved $25 billion in the past decade with productivity gains, and only a quarter of that savings was passed on to shippers.

Union Pacific reports large 1^st quarter loss

DALLAS – Union Pacific Corp. reported a net loss of $62 million, or 25 cents per diluted share in the 1^st quarter.

The company estimated that its service problems reduced net income by about $260 million, or $1.05 a share. Net income in the quarter was $128 million.

UP’s railroad division reported operating income of $53 million in the 1^st quarter versus $353 million for the same period last year. Railroad revenues were down 11% and operating costs increased 1%. This led to an operating ratio of 97.7% versus 86.2% last year during the same time.

Gore pronounces labor unions growing stronger

WASHINGTON – Vice President Al Gore, saying that America’s labor unions are recovering their strength and organizing power, said this week that the Clinton Administration will "aggressively pursue" linking federal construction contracts to unionized companies.

Gore made his statement to the AFL-CIO’s building trades department leadership conference and said Transportation Secretary Rodney Slater will begin anew effort this week to encourage the use of project-labor agreements on major construction programs.

However, the U.S. Chamber of Commerce said it would challenge this initiative in court and in Congress.

FRA appoints new administrator

WASHINGTON – Jolene Molitoris, FRA administrator, has appointed Charles. H. White Jr. to be the associated administrator for policy and program development at the Federal Railroad Administration.

White was a partner at the Washington, D.C., law firm of Galland, Kharasch & Garfinkle and focused on transportation law. He served with the Interstate Commerce Commission from 1970 to 1977 as associated general counsel for litigation.