UTU News Digest - Friday, January 15, 1999

UTU Daily News Digest

Information of interest to operating railroad and transportation employees

Friday, January 15, 1999

Florida Pulls Plug on Bullet Train

TALLAHASSEE, Fla. -- Gov. Jeb Bush pulled the plug Thursday on a $6.3 billion project to build a bullet train that would whisk passengers between Miami, Orlando and Tampa at nearly 200 mph.

"We have to be good stewards of the taxpayers' money," he said.

Under then Gov. Lawton Chiles, the state signed a deal in 1996 with Florida Overland eXpress, a private consortium that planned to run French-designed trains on new tracks that would use underpasses and overpasses instead of road crossings.

The state planned to pay for its portion by selling $2 billion in bonds and borrowing $2 billion from the federal government.

The state has spent $22.4 million planning the venture, but Bush said he will stop future spending and veto any attempt by lawmakers to restore it. The newly elected Republican said the venture is too expensive and risky for the state.

"I would think that would be the death knell for it," said Dave Goodstein, vice chairman of a group called Derail the Bullet Train.

Plans called for the trains to roll between Miami and Orlando in 2005. Tampa service would have begun in 2006.

A similar effort to link Florida's urban areas by high-speed rail failed in the early 1990s when the developer asked for public money.

Amtrak fare offer gives travelers free ticket when they buy one on selected routes

CHICAGO -- What do the Washington Monument, Radio City Music Hall, the Rock and Roll Hall of Fame, and Niagara Falls all have in common?

They're among the scores of destinations that travelers now have new reason to visit via train travel, thanks to a buy-one, get-one-free fare offer on selected Amtrak routes.

The Amtrak offer, which is available through February 22, 1999, is valid for travel through March 15, 1999. The fare promotion is being offered on the following Amtrak routes: Long-Distance Services

* Capitol Limited
(Chicago-Toledo-Cleveland-Pittsburgh-Washington, D.C.)

* Cardinal
(Chicago-Indianapolis-Cincinnati-Washington, D.C.)

* Lake Shore Limited
(Chicago-Toledo-Cleveland-Buffalo-New York/Boston)

* Pennsylvanian
(Philadelphia-Harrisburg-Pittsburgh-Cleveland-Chicago)

* Three Rivers
(New York-Philadelphia-Harrisburg-Pittsburgh-Akron-Chicago)

Midwest Corridor Services

* Illinois Corridor (Chicago-St. Louis)

* Illinois Zephyr (Chicago-Quincy, IL)

* Illini (Chicago-Champaign/Urbana-Carbondale)

* Hiawatha (Chicago-Milwaukee; weekends only)

* Missouri Corridor (St. Louis-Kansas City)

* Michigan Corridor (Chicago-Detroit/Pontiac)

* International (Chicago-Battle Creek-Port Huron-Toronto)

* Pere Marquette (Chicago-Grand Rapids, MI)

"Train travel is the best way to see these parts of America and with this fare, there is no better time than now for travelers to get on board and get going," said John Chatas, acting senior director of marketing, Amtrak Intercity.

Getting on board Amtrak trains is exactly what Americans have been doing. Amtrak set an all-time revenue record in 1998 by topping the $1 billion passenger revenue level for the first time in the railroad's 27-year history. The revenue record was driven by the largest ridership increase since 1988.

For more information, travelers can visit a staffed Amtrak station, consult an authorized Amtrak travel agent, call 1-800-USA-RAIL, or visit Amtrak on the World Wide Web at www.amtrak.com.

Amtrak Intercity, which is headquartered at Chicago Union Station, operates 76 trains daily in 40 states, including most of Amtrak long-distance services. The company, which employs 6,400 people, is one of three business units of Amtrak, the National Railroad Passenger Corporation.

Talgo trains provide comfort on the rails

SEATTLE -- Northwest rail passengers are now traveling in comfort and style as they enjoy Amtrak Cascade service featuring American-made Talgo trains.

Daily service between Seattle and Portland was inaugurated Monday, Jan. 11, 1999. Talgo trains will be rolling throughout the entire corridor as schedules are finalized.

Talgo CEO, Jean-Pierre Ruiz, said that detailing and servicing of two complete trainsets have been completed and the trainsets have been placed in revenue service by the Washington State Department of Transportation. "We are thrilled that Amtrak Cascades passengers can now enjoy the comforts of Talgo trains," Ruiz said. "This is a big step in bringing high speed rail service to the American public. It also provides travelers relief from our crowded Northwest highways and goes a long way toward reducing air pollution."

Talgo passenger trains, developed in Spain and assembled in Seattle, feature a unique tilting suspension system and other construction features that allow the train to achieve higher than normal speeds and a smoother ride on curves. In addition, the Seattle-produced Talgo trainsets have been manufactured to meet all federal rules and regulations. Mobility-impaired passengers will be capable of boarding and de-boarding cars with ease. They will also be able to travel between all accessible cars including the bistro and dining cars without having to de-board and re-board.

Talgo, Inc., a Washington State corporation, is a wholly owned subsidiary of Patentes Talgo of Madrid, Spain. Talgo, world leaders in rail technology, has more than 100 trainsets in operation throughout the world. New generation Talgo XXI trains, currently undergoing final testing in

Spain, feature a completely integrated locomotive and passenger car system capable of speeds of up to 150 miles per hour.

L.B. Foster invests in Dakota, Minnesota and Eastern Railroad Corporation

PITTSBURGH -- L.B. Foster announced this week that its wholly owned subsidiary has increased its investment in the Dakota, Minnesota and Eastern Railroad Corporation (DM&E) by acquiring $6 million of DM&E Series C Preferred Stock and warrants, thereby increasing the Company's ownership to nearly 16% of the DM&E's common stock.

The DM&E raised approximately $22 million by selling preferred stock and warrants. The funds will be used to pay expenses incurred in connection with the DM&E's ongoing capital expenditure program and its current operations, as well as to further the DM&E's planned expansion into the low sulfur coalfields of the Powder River Basin. The DM&E is a privately held regional railroad with approximately 1,100 miles of track located principally in South Dakota and Minnesota.

In June 1997 the DM&E initially announced plans both to build approximately 280 miles of new railroad as an extension from the DM&E's existing line into the low sulfur coal market of the Powder River Basin, Wyoming and to rebuild its existing line.

In December, 1998 the Surface Transportation Board (STB) made a finding that the DM&E had satisfied the transportation aspects of applicable regulations. The STB still must address the extent and nature of the project's environmental impact and whether any impact can be adequately mitigated. New construction on this project may not begin until the STB reaches a final decision.

Lee Foster II, President and Chief Executive Officer of L.B. Foster Company stated, ``With the Surface Transportation Board's approval of the transportation merits of the DM&E's expansion into the Powder River Basin, the DM&E has moved a step closer to the realization of its goals. As a shareholder, as a railroad products supplier and as an advocate of the growth of railroads in the United States, we are pleased to be a part of this project.''

L.B. Foster Company, headquartered in Pittsburgh, PA, is a manufacturer, fabricator and distributor of rail, construction and tubular products.

American Trans Air Cockpit Crewmembers Vote for ALPA Representation

WASHINGTON -- The flight deck crewmembers of American Trans Air have voted to be represented by the AirLine Pilots Association, International.

Results of the ballot were released Monday by the National Mediation Board, the federal agency that oversees labor relations for the railroad and airline industries. More than 87 percent (747) of the 855 flight deck crewmembers eligible to vote returned their ballots. Of those, 619, or nearly 83 percent, voted for ALPA.

All the ALPA votes were write-in ballots, since ALPA was not a choice on the ballot card. There were 107 votes for the International Brotherhood of Teamsters, which had represented the American Trans Air cockpit crewmembers prior to the ballot. There also were 20 votes for the ATA Committee for Fair Representation, and one miscellaneous ballot.

American Trans Air, based in Indianapolis, Ind., flies chartered and scheduled operations from eight bases in the U.S., to points spanning the nation and to various international markets. Its fleet consists of 52 aircraft, including the L1011, B757, and B727. ATA is the largest charter operator in the world, and during Desert Storm, it flew more military personnel than any other carrier, including military transports. With ongoing expansion, it currently employs more than 900 cockpit crewmembers and hopes to enlarge the total to as much as 1,500 by the end of the year.

The current labor contract, negotiated by the Teamsters, will remain in effect and is not amendable until October 2000.

ALPA represents 53,000 airline pilots at 51 airlines in the U.S. and Canada. In addition to traditional labor union activities, it is the industry's leading advocate for aviation safety.

Mexico to spend billions of pesos on railroads

MEXICO CITY -- Operators of Mexico's recently privatized railway system plan to invest 3.75 billion pesos (MXN) ($1=MXN10.6150) during 1999 and more than MXN5.00 billion in the next five years, a top government official said Thursday.

Deputy Transport Minister Aaron Dychter said at a press conference that most of the investment will be allocated to acquiring locomotives and equipment, and upgrading infrastructure.

Railway operators hauled 75 million metric tons of cargo in 1998, up 21.5% from 1997, Dychter said. He attributed the rise in cargo haul to the country's economic growth and the railways' increased market share in the transportation business.

Dychter said railways currently have a market share of slightly more than 15%, higher than the average 12% share held in the early 1990s before the privatization. However, he said railways had held a 20% market share in previous decades.

"There's still a long way to go on this issue," Dychter said.

The Mexican government raised about $2.40 billion from the sale of the country's three major trunk rail lines, one regional line in northern Mexico, and Mexico City's railway terminal, which connects the Pacific-North, the Northeast and the Southeast trunk lines, Dychter added.

With the privatization of about 95% of the country's railway system, the government will save about MXN4.0 billion in annual transfers to the country's federal railway authority Ferrocarriles Nacionales de Mexico, also known as FNM.

"These public funds can now be allocated to other priority areas," Dychter said.

He said the new owners of the Northeast line, who took over operations in June 1997, invested $73.3 million in 1997, $95.5 million in 1998 and plan to invest $300 million in the long-term leasing of 150 new locomotives.

The Northeast line was sold for around $1.4 billion to Transportacion Maritima Ferroviaria (TFM), a joint venture between Mexican shipping concern Transportacion Maritima Mexicana (TMM) and U.S. Kansas City Southern Industries (KSU).

Cargo robberies on the Northeast line have decreased by 70% since TFM took control of the line, while train speed has increased by 30%, Dychter said.

The new operators of the Pacific-North line, who assumed managerial control in February 1998, invested $130 million in infrastructure in 1998 and plan to invest $218 million in 1999, mostly for the acquisition of 50 new locomotives.

The Pacific-North line was sold for about $530 million to Grupo Ferroviario Mexicano SA (GFM), also known as Ferromex, a consortium headed by Mexican copper miner Grupo Mexico SA (E.GMX), construction giant Empresas ICA Sociedad Controladora (ICA) and U.S. rail operator Union Pacific (UNP).

Cargo robberies at the Pacific-North line have decreased by 50% since Ferromex assumed control of the railway.

The company also introduced tourist service in the Copper Canyon, located in the northern state of Chihuahua. The company also launched the "Tequila Express," which offers service from Guadalajara, the country's second-largest city, to Tequila, the center of Mexico's tequila industry in the western state of Jalisco.

The Southeast line, which was purchased for around $322 million by local construction concern Grupo Tribasa SA (GTR) and Mexico's Grupo Financiero Inbursa, has increased its number of trains to 31 from 27 "in only 15 days," Dychter said.

The companies assumed managerial control Dec. 17, and pledged to invest MXN2.5 billion in the Southeast line over the next 10 years.

Ramiro Sosa, head of FNM, said the agency has now 7,000 employees, down from the 45,000 workers it had on its payroll before the privatization process started.

About 54%, or around 21,000 workers, were transferred to the new railway operators, while another 30%, or about 12,000 employees, chose early retirement. Around 7,000 workers were laid-off, Sosa added.