UTU News Digest - Thursday, October 22, 1998

UTU Daily News Digest

Information of interest to operating railroad and transportation employees

Thursday, October 22, 1998

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UTU, Wisconsin Central reach tentative agreement

ROSEMONT, Ill. – The United Transportation Union and Wisconsin Central Transportation Corp.'s Wisconsin Central Ltd., Fox Valley & Western Ltd. and Sault Ste. Marie Bridge Co. units have reached a tentative agreement to cover conductors.

The tentative agreement is being sent to union members for ratification. It is anticipated that the ratification process will be completed by mid-to-late November. Wisconsin Central said the tentative agreement reached is consistent with the current operating practices of the company.

In a press release, the carrier said the wage movements are within the level expected and in line with earlier contract agreements reached by the company with the Association of Rail Unions on its Canadian affiliate, Algoma Central Railway Inc. The company continues its talks with the Brotherhood of Locomotive Engineers, the union representing its Locomotive Engineers.

Canada's National Railway to Cut 3,000 Jobs

OTTAWA -- The Canadian National Railway Co. (CN) will slash 3,000 employees from its work force this year and in 1999, reports said Wednesday. CN will take a $590-million special charge for workforce reductions.

With the special charge, CN reported a net loss of $205 million for the third quarter of 1998.

The company announced the job cut late Tuesday in the face of one of its toughest financial quarters since it became a public company in 1995. "We are trying to become the most efficient railroad in North America," CN President Paul Tellier said, adding that he had accelerated the pace of job cutting due to the faltering world economy.

Tellier attributed the layoffs to new technology and other improvements at the railway. CN is running faster and longer trains and is withdrawing about 500 locomotives because of the higher productivity. This allows it to reduce the number of employees, he said.

In addition, he said, the railway lost a lot of business during the General Motors strike this summer. And the Asian economic flu has also cut into exports of coal, grain and other commodities, which were often moved by rail.

The Union of Canadian AutoWorkers blamed the job cut as "greedy". "The only thing that matters now is shareholder value and executive's bonuses, and Tellier does very well with those," said Buzz Hargrove, head of the union

Canadian National yesterday today reported third-quarter 1998 net income of $140 million, excluding a special charge for workforce reductions, compared with net income of $133 million for the comparable period of 1997.

Excluding the special charge, the Company reduced operating expenses by 11 per cent in response to a nine per cent reduction in carload volumes and nine per cent decline in revenue during the quarter.

CN recorded a pre-tax $590-million ($345 million, after tax) special charge to operations in the third quarter ended Sept. 30, 1998, to recognize second-half 1998 and full-year 1999 workforce reductions aimed at cutting operating costs and increasing productivity. The job reductions in the second half of 1998 are approximately 1,600, with additional 1,400 reductions to take place next year. The bulk of the second-half 1998 reductions will occur in the final quarter of the year. The special charge includes severance and other payments for affected employees.

Excluding the special charge, diluted earnings per share for third-quarter 1998 were $1.45, compared with $1.54 ($1.57 for continuing operations) for the comparable period of 1997. Including the special charge, the diluted loss per share for third-quarter 1998 was $2.14.

Operating income for the third quarter of 1998, excluding the special charge, declined two per cent to $258 million from $264 million for the comparable period of 1997. The operating loss for the latest quarter, including the special charge, was $332 million. CN's operating ratio for the most recent quarter, excluding the special charge, was 73.3 per cent, an improvement of 1.8 points over the third-quarter 1997 performance of 75.1 per cent.

Train kills man standing on tracks

ELMWOOD PARK, NJ -- Detectives and the Bergen County Medical Examiner's Office are trying to determine who the dead man was and why he stood in the path of a fast-moving passenger train Tuesday afternoon.

The NJ Transit train, with 50 passengers, was 23 minutes into its trip from Hoboken to Waldwick when the accident occurred, said Steve Coleman, an agency spokesman.

The engineer told NJ Transit police that he spotted a white man, believed to be in his 40s, walking back and forth across the tracks about 100 feet west of the Midland Avenue grade crossing shortly before 3 p.m. Suddenly, he said, the man stepped between the rails, directly into the path of the oncoming train, Coleman said.

"The engineer sounded the horn," Coleman said, but the man didn't budge.

Although Coleman said he believes the train was moving slower than the 60-mph speed limit along that stretch of track, the engineer could not stop in time. The man apparently was killed instantly. Coleman would not immediately identify the engineer, nor could he say how long he had been with the railroad and whether he had been involved in any previous accidents.

CSXI Celebrates Opening of 59th Street Facility

CHICAGO – CSX celebrated the grand opening of its $39 million, 132-acre 59th Street intermodal facility in Chicago yesterday.

The facility, extending from 55th Street to 71st Street between Western and Damen avenues, strengthens Chicago as a national intermodal transportation hub and prepares CSXI to handle a major portion of freight moving today on Conrail's intermodal system. The facility already has created positions for more than 150 Chicago-area residents and eventually will create a total of more than 200 new jobs.

Customers, community leaders and government officials joined Chicago Department of Planning and Development Commissioner Christopher Hill, CSXI President and Chief Executive Officer Les Passa and other CSXI executives to celebrate the opening of the modern intermodal facility, CSXI's fourth facility in the Chicago area.

"The opening of 59th Street will enable CSXI to handle more than 1.5 million loads of freight a year in Chicago," said Passa. "We'll be able to provide premier intermodal service for our Chicago area customers and for businesses moving freight through Chicago to or from the West Coast."

CSXI, a subsidiary of CSX Corporation, completed the 59th Street facility in September. The facility already has generated 157 jobs, which includes both employees hired directly by CSX as well as outside vendors, such as those providing repair services, operating equipment and security.

To fill openings created by the addition of the 59th Street facility, CSXI worked with community leaders and the Mayor's Office of Employment and Training to recruit and hire qualified residents from Englewood and Chicago Lawn, as well as the broader Chicago area. CSXI hired a total of 60 intermodal service representatives in three phases starting in May, July and October. Thirty-three of these employees are residents of the Englewood and Chicago Lawn communities. This number exceeds CSXI's initial hiring commitment to the community by 10 percent.

CSXI's largest terminal operations are located in Chicago. The 59^th Street facility handles about 45 inbound and outbound trains per week, with a daily range of about 6 to 10 trains, which will grow to 14 trains daily. The facility's tracks are connected to CSX Transportation rail lines, which provide a direct connection with two other major railroads in the area -- Burlington Northern-Santa Fe and Union Pacific.

Rather than transferring containers and trailers by truck to other Chicago-area railroad facilities and then reloading them onto rail cars, the CSXI 59th Street facility allows these containers to be moved from rail car to rail car via a direct connection. This transfer of cross-town traffic from truck to rail will eliminate more than 100,000 truck trips (more than 3 million truck miles) per year in the city of Chicago, reducing the level of traffic congestion and wear and tear on city streets and highways.

Pittsburgh gets $5 million for local transit, trolley overhaul

WASHINGTON -- The $520 billion spending bill that the House approved last night will provide Pittsburgh with $4 million over the next 12 months to help rebuild the Overbrook, Library and Drake trolley lines and $1 million to plan a proposed extension of the Light Rail Transit across the Allegheny River to the North Shore.

The massive bill, which includes money to finance scores of federal departments and agencies for the fiscal year that began Oct. 1, also includes $5 million to launch design and engineering of a high-speed, magnetic levitation train line that would link Pittsburgh to Philadelphia. The Senate is expected to approve the package today.

The $4 million in spending for the three trolley lines is just a fraction of the $100 million authorized over six years by the transportation bill. The extra money for the trolley lines will need to be appropriated annually by Congress. The cost of rebuilding the three lines is estimated at $493 million.

RailTex reports 1998 3^rd quarter results

SAN ANTONIO -- RailTex, Inc. announced results for the third quarter ended September 30, 1998. The Company posted record carloadings, operating revenues and operating income during the quarter.

Compared to third quarter of 1997, carloadings increased by 11% to 137,483, operating revenues increased 5% to $40.0 million and operating income increased 7% to $6.8 million. Net income in the third quarter of 1998 was $2.9 million, or $0.32 per basic and diluted share compared to $2.8 million, or $0.31 per basic and diluted share, in the third quarter of 1997.

Comparing the results of the nine month period ended September 30, 1998 with the same period of 1997, the Company posted increases in carloadings, operating revenues, operating income, net income and earnings per basic and diluted share. Carloadings increased 12% to 399,010, operating revenues increased 7% to $117.6 million and operating income increased 11% to $19.5 million. Net income for the nine month period ended September 30, 1998 was $7.9 million, or $0.86 per basic share and $0.85 per diluted share, compared to $6.8 million, or $0.75 per basic share and $0.74 per diluted share, for the nine month period ended September 30, 1997.

During the third quarter of 1998, the Company acquired the Central Properties, Inc. ("CPI"), which owns and operates two railroads: The Central Railroad of Indianapolis ("CERA") and The Central Railroad of Indiana ("CIND"). The Surface Transportation Board's approval of the acquisition of CPI became effective in late July, and the Company began actively managing the operations of the two railroads on August 1, 1998

Laidlaw, Greyhound Lines put on Standard & Poor's Watch

TORONTO -- Standard & Poor's today placed its ratings on Laidlaw Inc. and units on CreditWatch with negative implications.

Standard & Poor's also placed its ratings on Greyhound Lines Inc. on CreditWatch with positive implications. Laidlaw's CreditWatch listing affects approximately $1.9 billion of rated debt and Greyhound's affects approximately $210 million of rated debt.

On Oct. 19, 1998, Laidlaw announced it had entered an agreement and merger plan with Greyhound for approximately $650 million of cash and Laidlaw stock. The transaction includes the assumption of Greyhound's debt by Laidlaw, the largest public transit (including schoolbuses) and ambulance provider in North America. The merger is expected to be completed in January 1999, assuming it receives approval from Greyhound's shareholders and the Surface Transportation Board in the U.S.