UTU News Digest - Tuesday, February 9,1999

UTU Daily News Digest

Information of interest to operating railroad and transportation employees

Tuesday, February 9, 1999

Union Pacific, Burlington Northern to coordinate some dispatching

OMAHA, Neb., and FORT WORTH -- Union Pacific Railroad and The Burlington Northern and Santa Fe Railway Company announced Monday they have agreed to coordinated dispatching operations covering Southern California, the Kansas City area and the coal- rich Powder River Basin of Wyoming. It is the largest railroad coordinated dispatching agreement in history.

The goal of the new agreement, announced jointly by UP chairman and CEO Dick Davidson and BNSF chairman, president and CEO Robert Krebs, is to improve rail service in three of the country's busiest rail centers. The agreement is patterned after a successful dispatching arrangement in Spring, Texas, covering the Houston and Gulf Coast areas.

The move, which represents a departure from longstanding rail industry practice, would put several hundred miles of railroad routes in the West and Midwest under coordinated train dispatching. Although the total mileage affected by the new dispatching centers is relatively small, the centers would control freight-train operations in strategic areas for both railroads.

Creation of the centers comes as Union Pacific, the nation's largest railroad, continues to recover from massive traffic congestion and shipment delays that lasted for more than a year in the Texas-Louisiana Gulf Coast region. The problems started after Union Pacific took over Southern Pacific Rail Corp. Hundreds of shippers experienced disruptions and additional expenses and other railroads found their shipments were being delayed, including Burlington Northern Santa Fe.

"The spectacular success of our joint dispatching center in Spring, Texas, has greatly improved train operations in the Texas Gulf Coast region," said Dennis Duffy, Union Pacific executive vice president operations. "It is clear we can use the same approach to overcome difficult operating issues in other areas of the country which have similar unique strategic circumstances."

"The improvements we have seen as a result of the Spring center confirm our belief that in regions where two or more railroads share track and the efficiency of their operations are dependent upon each other, improved cooperation and communication in the dispatching process are keys to enhancing the level of service our customers expect," said Matt Rose, BNSF senior vice president and chief operations officer.

Specifically, the agreement will establish coordinated dispatching centers in San Bernardino, Calif., and Kansas City, Mo., while UP dispatchers supporting the UP line from North Platte, Neb., into the Powder River Basin of Wyoming will join BNSF dispatchers at BNSF's Network Operations Center in Fort Worth, Texas. Union Pacific's centralized train dispatchers are located in the Harriman Dispatching Center in Omaha.

Other railroads, both commuter and freight, operating within the territories that will be dispatched by these new centers will be extended an invitation to participate in the coordinated operations.

The San Bernardino center, scheduled to be launched in May, will coordinate UP and BNSF train operations in the Los Angeles area as well as the historic Cajon Pass and Tehachapi mountain passes in California. BNSF currently dispatches trains over Cajon Pass, which provides access to Southern California from the east. Tehachapi Pass between Mojave and Bakersfield, a key north-south route, is controlled by UP with BNSF trains running on trackage rights. The UP agreement to use Cajon Pass began in 1905 and the Tehachapi line was opened to BNSF predecessor Santa Fe in 1899.

The Kansas City dispatching center, which will be housed at BNSF's Argentine Yard in Kansas City, Kan., and is expected to be operational during the third quarter of 1999, will control train traffic in the nation's second busiest rail center with lines from BNSF, UP and other railroads converging from all points of the country. Both BNSF and UP have major switching yards in the Kansas City area.

Wyoming's Powder River Basin is the nation's largest source of low-sulfur coal. The two railroads began sharing trackage in the basin in 1984. BNSF controls the "joint line" access to the basin from the south, which is also used by UP. Record amounts of capital have been spent in recent years to add track capacity on the busy line. It is expected the new agreement will help both railroads meet anticipated growth demands. UP, which has already begun to add personnel in the Fort Worth center in connection with Powder River Basin operations, expects to expand its presence there within the next two weeks.

The Spring center, opened in March 1998, controls UP and BNSF trains between Houston and New Orleans over more than 340 miles of track, as well as track in the Houston area. Supervised by a neutral officer, the facility includes a consolidated UP/BNSF operation where dispatchers from each railroad control their respective lines along the entire Gulf Coast region.

By almost any measure, the dispatching center in Spring has been a success. For example, blocked sidings between Houston and New Orleans were reduced from a daily average of six to zero within the first 60 days of the center's opening, leading to increased velocity and improved schedule adherence. Trains going "dead on the law," meaning those whose crews have reached the maximum number of continuous hours worked under the federal Hours of Service Act and, therefore, must stop until the crews are relieved, have been drastically reduced from a high of 64 per month in May of 1998 to a total of 15 in January 1999, further signaling an improvement in velocity.

Railroads are involved in a debate in Congress over the level of rail competition after mergers reduced the industry to a handful of giants. But groups representing rail customers didn't seem alarmed by the plans for closer coordination between the two railroads.

"Any time you see companies that are supposed to be competing cooperating so closely, you question the motive," said Edward Emmett, president of the National Industrial Transportation League, which represents more than 1,400 rail and truck customers. "But in this case, you realize overall this is probably a positive move, because it will improve service reliability."

"We would hope and expect for it to lead to more consistent service and avoid service problems like we saw happen in the Gulf Coast area," said James Sabourin, a spokesman for Burlington Northern Santa Fe, Fort Worth.

John Bromley, a Union Pacific spokesman, said the new centers represent "more of an effort to get better use of our physical plant than a reaction to the service problems of the past year. This will help us run the railroad better."

CSX on track to complete Y2K compliance

TALLAHASSEE, Fla. -- A senior official of CSX Technology Inc., responsible for overseeing the Y2K compliance program for CSX Transportation Inc. (CSXT), assured Florida legislators today that the company is on track to complete a comprehensive program of updating and testing its computer and communications equipment.

"We are ahead of the curve on the Y2K problem," said Broughton Bracewell, director of Y2K compliance. "CSXT will be ready for the Year 2000."

Bracewell appeared before the House Community Affairs Committee of the Florida State Legislature today, which is examining how businesses critical to the state are dealing with the Y2K problem.

Bracewell explained that CSX assembled a Y2K team in 1996 in anticipation of the compliance challenges. Because of that early start, 80 percent of the reprogramming to the company's core information systems had been carried out by the end of 1998. The final work is on schedule to be completed by the middle of 1999.

Other components of CSX's Y2K-compliance program include updating and testing embedded systems, such as train control and dispatching, electronic commerce programs, communication systems with trading partners, and thousands of computer workstations. All of these projects are on schedule to be completed by December 1999.

"The process is going according to plan," Bracewell said, adding that CSX anticipates no additional budget increases to complete the compliance work. Contingency planning also is under way.

In his presentation, Bracewell discussed the acquisition of Conrail, which CSX jointly purchased with Norfolk Southern railroad last year.

"Our collaboration with Conrail and Norfolk Southern has made the Y2K- compliance process a much easier and smoother one," Bracewell told legislators. "It will not be an obstacle to implementing our integration of Conrail, and I believe all parties are benefiting from this cooperation and advance planning."

Bracewell explained that much of CSX's success with Y2K compliance was attributable to the company viewing it as a business challenge, not a technical one. "Addressing the problem from a purely technical side was relatively easy," Bracewell said. "CSX always viewed Y2K as a challenge that had to be solved to meet the demands of our customers and the safety requirements of our railroad," Bracewell said.

CSXT is the largest railroad operating in the Eastern United States and in the State of Florida. Headquartered in Jacksonville, the railroad is the source of 7,200 jobs in Florida and contributes a payroll of $330 million annually to the state economy.

CSX Technology Inc. provides software support and development, computer operations, telecommunications support and other technology-related functions for CSXT and its parent, CSX Corporation, as well as its sister companies, CSX Intermodal Inc. and Sea-Land Service Inc.

Labor woes hit 500 flights at American

DALLAS -- American Airlines canceled nearly 500 flights Monday, delaying or inconveniencing an estimated 50,000 passengers, as a contract dispute with its pilots escalated.

Worried passengers jammed American's telephone reservations lines. Gate agents directed displaced passengers to later flights or rebooked them on competitors' planes.

At least 900 flights have been cut from American's schedule since Friday, when pilots started refusing to fly overtime or calling in sick to protest issues stemming from American's purchase of Reno Air last year.

The dispute could become more heated this week as the three-day Presidents Day weekend approaches, a heavy travel time. The stock of AMR, American's parent company, fell 2 15/16 Monday to $57 a share.

American is the nation's second-largest airline, carrying about 225,000 passengers a day. More than 20% of the airline's national and international flights were affected by the job action Monday.

AMR Chief Executive Donald Carty apologized for inconveniencing passengers, but held out little hope for a quick settlement with the Allied Pilots Association (APA). He says the airline may consider seeking a court order to force pilots back to work if they are not legitimately sick.

"We were very surprised and disappointed by what happened," Carty said of the job action.

Besides higher pay for Reno Air pilots, the APA is demanding a boost now in the salary of American pilots who will be promoted once the two carriers are integrated in 12 to 18 months. Carty says the proposals would cost more than $40 million in the first year, wiping out many merger benefits.

Union officials say they want American's 9,200 pilots and Reno's 300 pilots to be treated fairly.

"It's regrettable that people are inconvenienced, and if management were willing to place a proposal on the table that's fair, presumably morale would improve and so would the service we offer to customers," says Brian Mayhew, an APA vice president and senior captain at the airline.

Cancellations hit harder in some airports than others. Nearly half the schedule was wiped out in San Jose, Calif., which normally has 22 daily departures. About 36 of 240 flights were cut Monday at American's hub in Dallas/Fort Worth, says airline spokesman Tim Smith.

The union says it considers the company to be in violation of the existing contract, and that its members were simply exercising their legal right to call in sick when they felt unable to safely fly.

"We simply cannot allow anyone to pressure us into flying when we are not medically fit because it would be a serious violation of medical regulations," Capt. Rich LaVoy, president of the Allied Pilots Association, told members Sunday.

A spokesman for the union said it is willing to reopen talks, but that the union was still encouraging pilots to be "absolutely certain they are fit to fly."

Based on storms and other similar disruptions in the past, Salomon Smith Barney analyst Brian Harris estimated the flight cancellations cost AMR about $4 million, or two cents a share, over the weekend, and the toll grew Monday. AMR had been expected to earn $1.17 a share in the first quarter, according to a First Call mean estimate.

Talks between management and union leaders broke down Saturday on a plan to integrate pilots from Reno Air, which American acquired on Dec. 23, into the American system.

The Allied Pilots Association wants immediate pay raises retroactive to Dec. 23 for Reno pilots who will move into higher-paying jobs at American, and for American pilots who will move into higher-paying positions as a result of the acquisition.

The company, which has given Reno pilots a partial, interim pay raise, plans to move pilots to higher pay rates as they are retrained for their new positions over the next 12 to 18 months.

Mr. Carty said the union's plan would provide immediate pay raises for 2,000 of American's 9,400 pilots, and cost the company $40 million to $50 million over the company's integration plan. No airline has ever given immediate raises to pilots able to move up eventually because of an acquisition, he said. "Our plan was as generous as any other integration plan we've seen," said Mr. Carty.

The Reno Air acquisition has created a training crunch at American's flight academy, which was already bustling to train about 80 new pilots a month for the airline's own expansion.

About 150 American first officers will become captains as a result of the addition of 27 Reno planes to the American fleet, for example. But moving them up requires both training them as captains and training pilots to move up into their vacated seats. Last week, American signed contracts to use flight simulators at other training facilities over the next year in addition to its own simulators.

Analysts were bewildered that a contractual dispute over an acquisition as simple as tiny Reno Air could boil into an airline-snarling feud. They questioned the prospects for future airline mergers if unions aggressively fight management on even a seemingly simple integration. "This issue does not merit this type of disruption. It approaches embarrassing," said PaineWebber Inc.'s Samuel Buttrick.

The Allied Pilots Association also has not yet agreed with the Reno pilots' union on a plan to integrate Reno pilots into the APA's seniority list. The APA wants to place all Reno pilots at the bottom of its seniority list, rather than ranking them based on length of service at either airline.

Impasse declared in contract talks between America West, employees

WASHINGTON -- Federal mediators declared an impasse in contract negotiations between America West Airlines and its flight attendants, triggering a countdown to a possible mid-March strike.

The National Mediation Board asked both sides to submit to binding arbitration, a step rarely accepted in airline contract negotiations. If either side rejects the offer, the NMB said a 30-day "cooling off" period would begin, and the NMB would attempt "supermediation."

If no agreement is reached, flight attendants would be free to strike. In its letter to both sides, the NMB set no deadline on its offer of binding arbitration, but the timing of the letter makes a strike possible during a travel season filled with spring-break vacations.

"We're prepared to fight for a fair agreement even if management forces us to strike to get it," said William McGlashen, president of the Association of Flight Attendants at America West.

Phoenix-based America West, the nation's ninth-largest airline, said it had no comment on the NMB's action.

The flight attendants union said it plans a campaign of strategic walkouts rather than a full-scale strike that would ground the airline. The campaign, dubbed "Chaos" for Creating Havoc Around Our System, could include a mass walkout for a day or a week at a time, the union said, or might be limited to flight attendants walking off individual flights with no advance warning.

America West began talks with its flight attendants in 1994 on a first contract for the group. In July 1997, federal mediators entered negotiations, and a tentative agreement was reached in October 1997.

But that pact was roundly rejected by 88% of union membership. Negotiations resumed last March. When talks broke off last month, the union said the two sides were about $16.5 million apart in annual pay for flight attendants.

Complicating the contract negotiations are talks between America West and both UAL Corp.'s United Airlines and Delta Air Lines over a possible acquisition of America West. Continental Airlines, which has a marketing alliance and 8% voting stake in America West, also is in the mix because it holds a right of first refusal on a controlling stake in the carrier.

An acquisition by one of the larger airlines probably would trigger an integration of labor groups and move America West employees into higher-paying contracts at the acquiring airline.

FRA awards contract for procurement of Advanced Track Geometry Vehicle

WASHINGTON -- Federal Railroad Administrator (FRA) Jolene M. Molitoris today announced the award of a $3.7 million contract to ENSCO, Inc., of Springfield, Va., for the acquisition of a new track geometry measurement vehicle to replace the FRA's 18-year-old Automated Track Inspection Program (ATIP) T-10 track geometry measurement car. Use of a geometry car is a key element of the FRA's Track Safety Program.

"The new track geometry measurement vehicle will advance safety, which is President Clinton's highest transportation priority," Molitoris said. "It will enhance our track safety oversight capabilities and thus help assure safe movement, especially of passengers and hazardous materials."

The new ATIP vehicle will be equipped with onboard, state-of-the-art data acquisition systems and a differential global positioning receiver. In addition, it will offer improved ergonomics, observation window space, and data displays. Acceleration and ride quality measurement capabilities will be improved as well.

The ATIP has been an important tool for federal and state track safety inspectors to identify track locations requiring further on-the-ground investigation. Utilizing advanced electronic sensing technology, the track geometry car records eight critical track measurements every foot to objectively identify problems in track gage, surface and alignment. Such equipment can accurately locate problematic conditions that are difficult to detect using conventional methods such as visual inspection. The data produced by the vehicle's precise measurement of existing track systems are used to monitor compliance with Federal Track Safety Standards.

Approximately 25,000 miles of track are inspected annually under the FRA's Automated Track Inspection Program including Amtrak routes, parts of the military strategic network and routes over which hazardous materials and spent nuclear fuel are frequently transported. The FRA performs automated track inspections in coordination with railroads. In doing so, the ATIP provides railroads with useful data for maintenance planning and facilitates compliance with federal safety regulations.

In addition to other track safety oversight activities, the FRA has conducted automated track inspections continuously since 1966. While the FRA has regularly updated computer systems and software on its current track geometry car, the T-10's suspension and propulsion systems have become obsolete and difficult to replace. The new vehicle will be able to monitor compliance with the recently revised Track Safety Standards (49

CFR Part 213), including requirements for the operation of high-speed passenger trains at speeds of up to 200 mph.

Greenbrier wins orders for 1,700 railcars worth $120 million

LAKE OSWEGO, Ore. - Greenbrier Cos. has won $120 million in new orders for 1,700 railcars.

The orders include 1,000 89-foot flatcars from TTX Co. and 700 conventional railcars of various types. The flatcar order extends the production run of this model for TTX to 2,500 units.

Greenbrier's current manufacturing backlog is about 8,100 units, valued at $490 million, up from the company's last backlog of 7,700 railcars worth$450 million as of November 30. Greenbrier owns or manages a fleet of about 33,000 railcars.