UTU News Digest - Friday, August 13, 1999

UTU Daily News Digest

Information of interest to operating railroad and transportation employees

Friday, August 20, 1999

Jury Awards $3 Million For Worker's Soft-Tissue Injury

PHILADELPHIA - After a four-day trial, a Philadelphia Common Pleas Court jury delivered a $3 million verdict yesterday to a railroad worker who sustained soft-tissue injuries when he fell from a locomotive's ladder, according to The Legal Intelligencer.

"If there ever was a textbook case of negligence, this was it," said the plaintiff's attorney, Robert S. Goggin III of William L. Keller & Associates.

In 1997, Robert Nast of Pike County, then 47, was employed as a mechanic by New Jersey Transit Rail Operations Inc., at the transit company's rail yard in Raritan, N.J.

The yard was being resurfaced, which entailed removal and replacement of railroad ties and ballast, the rocky material on which the rails are set.

During the resurfacing process, the ballast removal left gullies alongside rail tracks that remained in operation.

The plaintiff was injured when, while performing maintenance chores at 3 a.m. in the unlighted rail yard, he stepped off a ladder on the side of a locomotive engine and tumbled five feet down a gully.

The theory of negligence was based on evidence that the transit company, which was aware of the hazards presented by the resurfacing project, failed to provide the plaintiff with a safe work place, Goggin said.

"They had notice of the unsafe condition," said Goggin. "A company foreman testified that he had received numerous complaints from workers and took those complaints to the engineering department of New Jersey Transit."

There was no response by the railway company to the workers' concerns, Goggin said.

"The workers even offered suggestions on how the resurfacing work could be made safer, none of which New Jersey Transit did anything about," he said.

It had been a common practice for mechanics to work at night without lights in the yard, Goggin said. "Following this, they put in four tower lights."

The new lighting was not excluded from evidence as a subsequent remedial measure because the lights were part of the resurfacing construction project, Goggin said.

The plaintiff suffered nerve-root irritation in his lower back that caused decreased muscle tone and function in his right foot. "He walks with a limp," Goggin said.

The defendant was represented at trial by Dorothy T. Daly of Swartz Campbell & Detweiler. "I've only had preliminary discussions with the client at this point, but it seems that a motion for remittitur or a new trial would be warranted in this case," Daly said.

The complaint was brought under the Federal Employee Liability Act, which was the plaintiff's only remedy, Goggin said. The federal statute allows state courts to assume jurisdiction. "New Jersey Transit trains run in Philadelphia," Goggin said.

The jury was apparently sympathetic that two of the plaintiff's four children were forced to leave college and work to help support the family when the plaintiff's injuries left him unable to work, Goggin said.

Under the federal act, the plaintiff was not entitled to worker's compensation benefits. His only financial benefits were about $30,000 in payments from his railroad disability and pension fund.

Goggin also indicated that the jury reacted to how the defendant "argued that my client should have been more careful. The jury didn't buy it. There was zero contributory negligence."

Veteran Rail Project Chief Picked to Build Pasadena Line

LOS ANGELES - A divided Pasadena Blue Line board Wednesday night (18 August 1999) chose Rick Thorpe, manager of the Salt Lake City's light-rail project, to take charge of building a long-awaited passenger railroad from Los Angeles to Pasadena, according to an article by Jeffrey L. Rabin of the Los Angeles Times.

Paul Little, chairman of the Pasadena Metro Blue Line Construction Authority, said the board voted 3 to 2 to negotiate a contract with Thorpe to be chief executive officer. If the contract negotiations are successful, Thorpe will assume the job of completing the 13.7-mile line from Union Station to Pasadena.

Thorpe, a civil engineer, has built light-rail projects on tight budgets in San Diego and Salt Lake City. Little said that experience was a major factor in Thorpe's selection over Charles Stark, construction chief of the Metropolitan Transportation Authority.

"He's done the work in San Diego and Salt Lake on time and under budget," Little said. "He's dealt with multiple communities very successfully. He brings the energy, enthusiasm and experience to get us back on the schedule we need to be on."

But Los Angeles City Councilman Mike Hernandez, who joined MTA representative William Dahl in supporting Stark, said Thorpe faces "a steep learning curve" as a newcomer to the rough politics of mass transit in Los Angeles.

Hernandez said he believed that Stark, a veteran subway builder in Los Angeles, was "the individual who could keep us on track." He said Thorpe can build the Pasadena line, but it will take him time to learn the project.

Thorpe was chosen after a final interview with the directors Wednesday evening in downtown Los Angeles.

Little said he was optimistic that the rail authority board will work together with one goal in mind: finishing the line from Union Station to Sierra Madre Villa in east Pasadena.

State lawmakers frustrated with the MTA's track record on Los Angeles subway and rail projects stripped the agency of responsibility for building the Pasadena line last year. The MTA had spent more than $240 million on the project before financial problems halted work on the line and on subway extensions to the Eastside and Mid-City areas of Los Angeles.

Legislators created the Pasadena rail authority with only one mission: to finish the rail line from Union Station through Chinatown, Lincoln Heights, Highland Park, South Pasadena and Pasadena. Once the line is built, the MTA will operate the trains.

Faced with limited resources, the five-member authority's greatest challenge is to get the project finished by the middle of 2003 without exceeding a $683.7-million budget.

Unlike the MTA, the new agency is dominated by three representatives from the San Gabriel Valley and they prevailed in the choice of Thorpe after a protracted search for candidates and a long deadlock over the two finalists.

Thorpe is a vice president of Parsons Brinckerhoff, a major transportation design and engineering firm. For the past four years, he has been project manager for TRAX in Salt Lake City, a 15-mile light-rail line scheduled for completion late this year, months ahead of schedule and below its $312-million budget.

Before that, Thorpe was the director of engineering and construction for light-rail and bus transit projects in San Diego for many years. While there, Thorpe oversaw the building of that city's popular streetcar lines that are considered a model of cost-effective rail construction.

Georgia DOT Chooses Consultant for Passenger Rail Program

ATLANTA, Aug. 19 /PRNewswire/ -- Georgia Rail Consultants, a joint venture of SYSTRA Consulting, Parsons Brinckerhoff, and Moreland Altobelli Associates, has been selected to further study the implementation of passenger rail service in Georgia.

Georgia DOT's Planning and Programming Director Paul Mullins told members of the State Transportation Board's Intermodal Committee Wednesday that the consultant will study the next increment of work toward the implementation of commuter and intercity passenger rail service from Atlanta to Macon, to Athens, to Canton and to Cartersville.

The consultant will also study the impact of a passenger rail system on the freight rail movements in the metro Atlanta area.

Mullins also said the Georgia DOT has received a $250,000 matching federal grant to develop an improvement plan for railroad crossings in the two high speed rail corridors in Georgia. One corridor will provide service between Washington, D.C. through Atlanta to Macon and the other will go from Spartanburg, South Carolina, through Savannah, to Jacksonville. The original grant application was for $400,000 and Mullins said additional funding sources are being identified.

A partnership of transportation agencies in Georgia, South Carolina, North Carolina and Virginia produced a Southeast High Speed Rail Corridors brochure. The plan produced by the participating states was distributed to committee members and Mullins added that the group has provided a website at www.sehsr.org .

The committee was also briefed on the status of the Atlanta Regional Commission's study of the Marietta to Lawrenceville rail corridor and the Maglev Technology Deployment Program. Mullins also said Georgia DOT staff has begun meetings with the Georgia Rail Passenger Authority and the Georgia Regional Transportation Authority (GRTA) to discuss GRTA's role in the passenger rail program. Mullins added that no final action will be taken on the Intermodal Program until comments are received from the Governor's Office.

Residents ask for help unlocking train tie-ups

FOSTORIA, Ohio - Since 1947, Pelton's Super Market has been a steady outlet for fresh meats, groceries, and hardware supplies for many residents living near Town Street and Bulger Avenue, according to a story by Tony Bassett of the Toledo Blade.

Along the way, a few of them have had their lives saved by store patrons because rescue crews - just a few yards away - were trapped behind train-blocked grade crossings.

"Something really needs to be done. It's a matter of life and death,'' said storeowner Harold Pelton, 75, one of dozens of Fostorians pushing the state to build grade separations in town. "When the trains come in here and turn around, they block us all in, and the police and fire can't get here. It's a serious situation."

He's not alone. The problem with blocked crossings plagues other communities, including Toledo, Perrysburg, Tontogany, Bellevue, Fremont, and Clyde.

Mr. Pelton was one of about 60 people who attended a public hearing in Fostoria yesterday put on by state Rep. Rex Damschroder (R., Fremont), who is trying to find a solution through legislation to relieve some of the city's gridlock at its 22 crossings. Attending the meeting in addition to concerned residents were officials from the Public Utilities Commission of Ohio, Ohio Rail Development Commission, Norfolk & Southern railroad, and several law enforcement officers from Seneca, Wood, and Hancock counties.

Mr. Damschroder invited representatives from CSX Transportation, but the company declined to attend.

State Rep. Jeanine Perry (D., Toledo) attended the meeting and said about 65 to 70 rail complaints are filed monthly in Toledo, but only a few citations are issued.

She said it's a "cumbersome process" to bring rail officials to justice.

She said proposed legislation would increase fines and ease the process of filing a report against the railroads.

Crossing delays have long troubled Fostoria residents, especially since rail traffic increased substantially when CSX and Norfolk & Southern lines acquired Conrail this year. One section of town that includes Mr. Pelton's market and dozens of homes is dubbed the "Iron Triangle" because its streets are penned in by rail lines. Another rail triangle exists several blocks to the west.

Mr. Damschroder called police this month after he was delayed by a lowered gate that kept drivers, walkers, and bikers waiting for nearly 20 minutes even though no train crossed Sandusky Street. The city charged CSX with a misdemeanor crime, with the matter set for an arraignment Monday in municipal court.

"It's a safety issue we just can't let go,'' Mr. Damschroder said. "Fostoria is a hub area and probably more affected by the merger than most other areas. The more trains we have, the more potential problems we have.''

Mayor James Bailey and other officials and residents believe the best way to improve rail-street traffic safety is to build underpasses or overpasses.

Mr. Bailey said Fostoria is not getting proper funds for such grade-crossing improvement "because we're just a small town,'' noting a $40 million project for two grade separations is under way in Berea "just for convenience.''

"We were told last year something was going to happen, but nothing did. Nothing is going to solve our problem anything short of grade separation,'' Mr. Bailey said.

Karen Mitchem, who lives in the west side triangle on West Tiffin Street, said train traffic has tripled since the merger, with 45 or so trains passing her home each day. She said to get a stopped train moved off a road, residents have to call the railroad's command center in Jacksonville, Fla.

Fire Chief Russell Rife said in recent times, firefighters crawled under a stopped train, fire extinguishers in tow, to get to a fire near Ms. Mitchem's home.

He said it isn't unusual for his crews to travel several miles to get around a stopped train.

"If an emergency is building on the other side and we have to go two, three, four miles around, that adds to our response time and puts people and property at risk,'' Chief Rife said. "We just need to have something done because it's a very serious problem out there.''

Lou Jannazo, chief planner for the state's rail development commission, said his agency is surveying communities and compiling reports on improving rail-related safety.

He said separating grade crossings is an issue for many communities around the state, which will have to prioritize the projects before doling out money for improvements.

For Mr. Pelton, whose business is about 20 per cent of what it was 52 years ago, in part, because of train traffic, the Iron Triangle is priority No. 1.

His daughter-in-law performed cardiopulmonary resuscitation this year on an ailing child in the market as an ambulance waited for a train just a stone's throw from the front door.

"Sometimes we're blocked in here all morning,'' he said. "How long can you make people wait before they're going to turn around and shop somewhere else?"

San Francisco gets $3.2 million for transportation grants

SAN FRANCISCO - Aiming to ease congestion South of Market, the federal government announced $3.2 million in transportation grants for the city, including $2 million for ferry service to the Giants' new ball park.

The transportation package also included $26.8 million for a 12.4-mile light rail system in Santa Clara County, a three-year-old project that will drop passengers off at major Silicon Valley employers.

City Supervisor Michael Yaki expressed gratification about the announcement of the two projects for the city, saying he believes they will provide "significant benefits" to the South of Market area. Specifically, the federal money will go toward projects that city officials have been seeking for years.

The $2 million grant will help build a ferry terminal at Pacific Bell ball park in China Basin, the Giants' new home beginning in April 2000. The terminal, set for groundbreaking in October and paid by $500,000 in city money, is expected to serve passengers from the East Bay and Marin County.

The $1.2 million grant, requested by the city's Department of Parking and Traffic, will go toward a larger centralized traffic system that city officials have planned for years. The system would ease traffic flow and reduce congestion. The funds, announced Wednesday (18 August 1999) by Vice President Al Gore, are part of a $800-million package Congress authorized last fall.

Under the U.S. Department of Transportation's competitive bid system, local officials don't learn of awards until the summer.

"It's a crapshoot every year," said Steve Heminger, a spokesman for the Metropolitan Transportation Commission.

Trucking is flashpoint in many ports; Vancouver strike is latest in chain of protests

The locations vary, but the story is usually the same: Port cargo volumes increase, and terminal operators don't respond quickly enough with longer gate hours or productivity improvements, according to an article by Bill Mongelluzzo in the Journal of Commerce.

Long lines of trucks form at marine terminals. Independent drivers, who get paid by the trip, sit and fume as the delays cut their earnings by 50% or more.

When terminal congestion reaches a critical stage, drivers organize protests, stage noisy boycotts and talk about unionization.

This chain of events, which has been played out this month in Vancouver, British Columbia, and the U.S. Pacific Northwest, has become familiar to many U.S. ports.

The job actions by harbor haulers that have crippled the Port of Vancouver since July 22, and spread to Seattle this week, are not isolated incidents. They reflect problems that have surfaced in recent years at ports as diverse as Los Angeles-Long Beach, Houston, New York-New Jersey, Charleston, S.C., Savannah, Ga., and Jacksonville, Fla.

"These problems always start at the marine terminal," said Greg Stefflre, a trucking company executive in Long Beach, Calif., and an attorney who serves as counsel to the American Trucking Associations.

Since trucking deregulation in 1980, a cutthroat industry has evolved as trucking companies underbid each other for contracts with shipping lines.

The companies contract with owner-operator drivers, keeping 20% to 30% of the money they are paid by shipping lines and passing the rest on to the drivers.

At many ports, trucking rates have sunk so low that the owner-operators must work 10-to-12 hours a day to cover their expenses and make a profit.

As working conditions deteriorate because of congestion at marine terminals, the independent drivers are increasingly open to organizing attempts by unions. The Teamsters union, in decline for years, has been taking an active interest.

"There is no question that container haulers are exploited," said Chuck Mack, president of Teamsters Joint Council No. 7 in Oakland, Calif. "Their job involves long hours, low pay and a lack of benefits. We could substantially improve the conditions under which they work."

In addition to congestion at marine terminals, drivers complain about their treatment from longshoremen. Drivers who hustle to complete three or four trips a day resent it when they are delayed at terminal gates and are verbally abused by high-paid longshoremen.

"When you treat people as second-class citizens, they listen to the radical elements," said Tony Coppola Jr., vice president of CTI, which has operations in the Mid-Atlantic region.

But unionization of harbor truckers in U.S. ports has met with little success.

Though there are isolated examples of unionized drivers at seaports, most trucking companies contract only with owner-operators.

U.S. labor laws generally prohibit independent contractors from forming unions.

Trucking executives believe unionization would ruin their industry by changing drivers' pay to hourly instead of by the trip. "There are no productivity incentives with union employees," Stefflre said.

Although the Teamsters are making inroads in Vancouver and Seattle, trucking problems at other seaports have not reached such a critical stage.

Even so, there have been periodic flare-ups around the country.

The Port of Charleston also experienced problems last week as drivers protesting delays at marine terminals briefly delayed cargo handling.

That job action was led by the United Container Movers Association, which represents independent truckers.

In New York-New Jersey, there have been no protests, but the Sea-Land Service Inc. terminal is experiencing excessive congestion and drivers are getting anxious, said Dick Jones, executive director of the Bi-State Harbor Carriers Conference.

Sea-Land, which is being acquired by A.P. Moller-Maersk, has cut back on its gate hours, Jones said. "They claim they're saving $1.25 million a year," he said.

Sea-Land said it is working to relieve the congestion. "The truckers do have some legitimate claims," said Clint Eisenhauer, a Sea-Land spokesman. "We are aggressively doing what we can."

The congestion problems were caused by delays in choosing the carriers' Northeast hub, Sea-Land's pending acquisition by Maersk and the normal peak season cargo crunch, Eisenhauer said.

Trucking officials on the East Coast said they have been able to head off serious problems because groups such as the bi-state conference communicate regularly with shipping lines. "You sit down with them and review the good, the bad and the ugly," said CTI's Coppola.

Two port areas which in past years were hotbeds of organizing activities, Houston and Los Angeles-Long Beach, have been quiet recently.

But that doesn't mean that all independent drivers are happy, said Joe Nievez, president of Qwikway Trucking in Los Angeles.

Gate times in Los Angeles-Long Beach are still unacceptable, and terminal operators are not helping matters by delaying implementation of a port-wide electronic communication system known as Dispatch.

That system, which has been under development for more than two years, is designed to notify truckers about cargo availability, emergency conditions at terminals and other operational matters.

"We need better communication, and this is the easiest, cheapest way to do it," Nievez said.

Terminal operators say that although smoother gate operations would benefit everyone, shorter lines would not solve all of the trucking industry's problems.

The capital investment required to establish a trucking company that uses owner-operators is minimal, and overcapacity has driven rates to rock bottom, said Edward A. DeNike, chief operating officer at Stevedoring Services of America. "The industry is killing itself with its rates," he said.

But trucking executives say that if ports, shipping lines, terminal operators and shippers work with the trucking industry to improve productivity at marine terminals, the root cause of the industry's problems would be eliminated.

"Across the country, I really don't believe drivers want to be unionized. They want to work efficiently," Stefflre said.

Genesee & Wyoming Inc. Announces Acquisition in Mexico

GREENWICH, Conn., Aug. 19 /PRNewswire/ -- Genesee & Wyoming Inc. announced today that its wholly-owned subsidiary Compania de Ferrocarriles de Chiapas-Mayab, S.A. de C.V. closed its previously announced acquisition of the Chiapas-Mayab railway concession from the Mexican state-owned rail company Ferronales.

FCCM paid 141 million pesos for the concession, or approximately $15 million at current exchange rates.

In addition, FCCM purchased locomotives, freight cars, and other assets and agreed to complete significant track rehabilitation on the lines.

The cost of the assets and the track rehabilitation is 116 million pesos or approximately $12.3 million at current exchange rates.

The Chiapas-Mayab concession consists of two separate rail lines with a total of approximately 1,550 kilometers (960 miles) of track. The two lines are connected via trackage rights.

Principal commodities include cement, silica sand, corn, petroleum products, propane gas and various other agricultural products. FCCM is scheduled to begin operations on September 1, 1999.

GWI also announced that it has expanded its credit facility with a syndicate of banks led by BankBoston, N.A. The amount of the facility has been increased to $150 million from $65 million. The facility also provides GWI with the ability to borrow funds in Australian and Canadian currencies.

GWI is a leading operator of short line and regional freight railroads in the United States, Canada, Australia and Mexico, and provides freight car switching and related services to industries with extensive railroad facilities within their complexes. This year GWI marks the 100th anniversary of its founding as a 14-mile railroad in upstate New York. GWI operations today cover more than 4,660 miles of track in four countries on two continents.

STB's Morgan re-nominated to post

WASHINGTON - Surface Transportation Board (STB) Chairman Linda Morgan, 47, was nominated to a second five-year term on the STB by the Clinton-Gore Administration despite the opposition of some labor unions and the doubts of some shippers.

The AFL-CIO Executive Council had asked the White House to reject Morgan, a Democrat. The UTU, however, is supporting Morgan's re-nomination.

In nominating Morgan, President Clinton said the STB's mission "is to ensure that competitive, efficient and safe transportation services are provided to meet the needs of shippers, receivers and consumers."

The Commerce Committee is expected to recommend Morgan's Senate confirmation soon after Labor Day.

Some rail unions and the AFL-CIO Transportation Trades Department are lobbying labor-friendly senators to block a confirmation vote.

But with Commerce Committee Chairman John McCain, R-Ariz., and the committee's senior Democrat, South Carolina's Fritz Hollings, actively supporting Morgan, the political cost may be too high.

Moody's confirms Greyhound rating

NEW YORK (Dow Jones) -- Moody's Investors Service confirmed the Ba3 rating of the $150 million of 11.5% senior notes issued by Greyhound Lines, Inc, the agency said Thursday (19 August 1999) in a press release.

The confirmation concludes a review for possible upgrade initiated on June 14, 1999 when Laidlaw Inc. commenced a consent solicitation under which the notes would have become unconditionally guaranteed by Laidlaw, the release said.

Subsequently, the consent solicitation expired without becoming effective. Thus Laidlaw has no legal obligation to support the notes and the claims of noteholders are limited to the assets and cash flows of Greyhound, the agency said.

However, Moody's recognizes Greyhound could experience potential business and financial benefits from its ownership by Laidlaw. Moreover, the ratings recognize the challenge that Laidlaw will face in continuing the turnaround in Greyhound's operating performance, Moody's said.

Greyhound Lines, Inc., headquartered in Dallas, TX, is the only nationwide provider of intercity bus transportation. Laidlaw, Inc., headquartered in Burlington, Ontario, Canada is the largest provider of healthcare transportation, school busing and municipal transit service in North America.

Kansas City Southern's Plan For Spinoff Advances

NEW YORK - Kansas City Southern Industries Inc. is moving forward with a planned spinoff of its financial-services business, according to the Wall Street Journal.

Plans for the spinoff of the new company, to be called Stilwell Financial Inc., is continuing despite opposition from executives and employees at Janus Capital Corp., the Denver mutual-fund manager that accounts for the majority of Kansas City Southern's revenue and profit. The fast-growing fund company, 82% of which is owned by Kansas City Southern, has argued that it should be spun off separately, without Kansas City Southern's other financial-services assets.

A stand-alone Janus stock would draw more admiration from Wall Street, because of the company's rapid growth and savvy picks over recent years in technology stocks, analysts say. Thomas Bailey, the fund firm's founder and chairman, says breaking Janus off separately would allow it to give managers and analysts stock that would build incentives for employees by tying their individual compensation packages to the firm's success.

Moreover, he says, a separate Janus could reinvest the firm's profit into technological improvements and growth. "We believe passionately" that a separate spinoff is the best course, said Mr. Bailey in a telephone interview. Janus officials also fear Stilwell could make acquisitions that would reduce earnings growth.

In June, Mr. Bailey and several of his employees aired their views with the board at Kansas City Southern, a transportation and financial holding company that started with a rail line in the 1800s. Kansas City Southern, which still owns rail properties as well as asset managers Berger Associates Inc. and most of Nelsons Money Managers PLC, says spinning off all the company's financial assets is easiest and most desirable for shareholders.

"It's not a wise decision," to pursue a separate Janus spinoff, because the Internal Revenue Service has already ruled that the Stilwell spinoff would be tax-free for Kansas City Southern shareholders, says Joseph Monello, chief financial officer at Kansas City Southern. Revising the spinoff might jeopardize the IRS's ruling on the plan, he added. Lawyers representing Janus disagree, saying a separate spinoff for the Denver fund-company could be approved in a few months.

Meanwhile, investors have sold off shares of Kansas City Southern. On Tuesday, the company's stock fell 9.1% on the New York Stock Exchange after a CIBC World Markets analyst said "a war for control is brewing" for Janus. Yesterday, the stock closed in composite trading at $49.25, down 81.25 cents on the day and 23% from its recent high in July. "Janus is prepared to take several steps to prevent the spinoff in its present form," wrote Steven Eisman, the CIBC analyst, citing the possibility that Janus could issue its own phantom stock that would move with its own fortunes but dilute the parent company's earnings.

Janus wouldn't consider a phantom stock plan simply to stop the Stilwell spinoff, says Mr. Bailey. But the Janus founder, who still holds a 12% stake in the fund firm, adds: "We've used phantom stock in the past . . . and in the absence of other alternatives, we'd absolutely do it" again to help compensate personnel in a competitive job market.

Kansas City Southern officials oppose phantom stock for Janus, saying it would hurt Stilwell's earnings. And while Janus officials maintain they have the right to use phantom stock, Mr. Monello says the parent company would also have to approve the decision.