UTU News Digest - Friday, October 8, 1999

UTU Daily News Digest

Information of interest to operating railroad and transportation employees

Friday, October 8, 1999

ENGLAND: Finger-pointing begins in crash of British trains; privatized system cited as source of problems

LONDON, Oct. 7—The smoke was still rising over the charred wreckage of London's horrendous train crash Tuesday morning when the blame-game began, and the fingers started pointing, the Washington Post reported.

There were a lot of places to point.

The two crowded commuter trains that smashed into each other outside Paddington Station were run by two different companies. The locomotives and passenger cars were rented from three other companies. The track and signal equipment belongs to yet another company, which contracts out maintenance and repair work to several other firms.

That fragmentation of ownership and responsibility is a legacy of Britain's hurried transition to rail privatization over the past five years. Until 1994, the whole system was a unified government-owned enterprise; today, more than 100 different corporations own pieces of the network. Even rail regulation is fragmented.

And that's one of the key reasons why passengers, regulators and many in the rail industry agree that privatization, so far, has been a costly flop. "Punctuality and reliability are down, fares are up, complaints are way up, and government subsidies have doubled since privatization," said Tom Winsor, the national rail regulator, a newly created government post that oversees the private owners. "Even the simple things don't get done.

Why can't they clean the toilets? Why do you need a Ph.D. to understand the ticket prices?"

The various elements of the newly private industry have become notorious for shifting blame for all problems to other parts of the fragmented network. "When they announce on [the PA system] why the train is late this time, they always, always say it's the other guy's fault," said Jonathan Bray, director of the passenger group Save Our Railroads. Implausible rail excuses have become fodder for humor magazines and stand-up comics.

The Independent newspaper's "Great Rail Fiascoes" column recently reported on a passenger who got stuck in a toilet. The door wouldn't open, and the intercom was broken. In desperation, he pulled the emergency brake cord, stopping all trains on the main line. The track owner blamed the train operating company, which blamed the passenger car company, which blamed the maintenance company, which blamed the passenger.

The one genuine success in the privatized system is the rail freight operation, in which both performance and profitability have improved. This is in large part an American triumph, because the winning bidder for the main freight line was the Wisconsin Central Railroad.

While acknowledging many of the problems, passenger rail companies have repeatedly said the trains are safe. That boast will be harder to make after Tuesday's crash, in which at least 70 people died. Police said today that the toll could reach 127, a fatality total greater than any under the nationalized railroad system. Rescue workers spent most of today erecting a crane to gain access to corpses believed snared in the twisted wreckage.

Many families won't know for sure until next week whether their missing relatives were on one of the two trains.

The trainload of rail problems facing Britain is ironic, because this compact country should be a great place to run a railroad. Britain invented trains, and the great 19th-century British rail companies were among the first multinational corporations. British money and engineering built railroads around the world, including the first U.S. rail lines.

Unlike the United States, there is almost no corner of the United Kingdom that doesn't have regular rail passenger service. The left-leaning government that took over after World War II nationalized many industries and merged all railway companies into a single public giant. In the 1980s, Conservative Prime Minister Margaret Thatcher moved in the other direction, privatizing the telephone, power and water industries and even the government printing office.

But Thatcher never took on British Rail, the company that people here loved to hate. It was her Conservative successor, John Major, who privatized the trains. "It was a rush job, because the Conservatives knew that the Labor Party was likely to win the next election and would oppose privatization," said David Morphet, director general of The Railway Forum, the train industry's trade association. "To get it done fast, they fragmentized the system far more than anybody would have wanted. Of course that has caused problems."

Tuesday's fatal crash, and the failure to pin down responsibility for it, have prompted some calls for re-nationalization, but the government has shown no interest in that.

Rather, the hope is that public anger, tighter regulation and better management will gradually produce a rail network that the world's oldest train-riding country can be proud of. "The only thing we can do," said Winsor, the rail regulator, "is encourage them, fine them and sanction them until they produce the kind of service people are entitled to."

WASHINGTON: NITL survey shows shippers rate CSX service above NS

WASHINGTON -- The results of a National Industrial Transportation League survey of shippers show that CSX is beating Norfolk Southern in the railroad service game—at least in terms of the Conrail integration. The results were revealed at a recent monthly meeting of the Conrail Transaction Council, Traffic World reported.

There were 58 responses from roughly 200 NITL members polled, and it was not a scientific sampling. However, the results clearly showed that although both railroads are still struggling to restore service disrupted by the merger three months after integration, CSX so far is faring significantly better than NS.

The seven-question survey, which was mailed out a month ago, looked at service between Aug. 1 and mid-September. Regarding service since Aug. 1, no one said NS service was better than service on the former Conrail before the June 1 split date; 16 percent said it was "about the same," and 83 percent said it was worse. During the same period, 3 percent said CSX service was better, 28 percent said it was the same, and 64 percent said it was worse.

The numbers were generally better overall since Sept. 1, where 12 percent of NS-served members said service had gotten better, 60 percent said it about the same, and 24 percent said it was worse. For CSX-served members, 28 percent said service had improved, 55 percent said it was about the same, and 10 percent said it was worse.

Delayed shipments were the biggest problem "by far," according to the survey. NS "hot spots" were in its yards at Buffalo, N.Y., Pittsburgh, Allentown and Harrisburg, Pa. The biggest problems for CSX were at Philadelphia, the New Jersey shared asset area and Selkirk, N.Y.

NEBRASKA: Union Pacific sells portion of former Rock Island Line

OMAHA -- Union Pacific Railroad announced today it has sold the central portion of the former Rock Island Line across central-Missouri to the Missouri Central Railroad, the company reported on its website.

Financial terms of the sale were not disclosed.

The portion of the line Union Pacific sold to Missouri Central is 244 miles between Vigus, which is west of St. Louis near Chesterfield, to Pleasant Hill. Union Pacific will retain the ownership of the line between Kansas City to Pleasant Hill and Vigus to St. Louis. Missouri Central will be able to operate over those portions of the line through a trackage rights agreement.

The Missouri Central will take over the line today.

The line, locally known as the "Rock Island line", was acquired by Union Pacific as the result of the 1996 UP/Southern Pacific Railroad merger. Southern Pacific had purchased the line from the bankrupt Rock Island in the early 1980s to have a route between St. Louis and Kansas City. SP, however, obtained permission to operate over a parallel line owned by Union Pacific as a result of the merger between UP and Missouri Pacific Railroad in 1982. The line has not been used, except for about 80 miles between St. Louis and Owensville, since the early 1980s.

MINNESOTA: Metro Transit inaugurates motor coach service

MINNEAPOLIS -- Metro Transit customers will experience a new standard in bus-riding comfort beginning today when the agency puts in service two Greyhound-style motor coaches.

The new buses feature reclining seats, footrests, reading lights, overhead storage and individual air vents. The first of the buses will be used initially on Minneapolis Route 672 with inaugural ceremonies at 6:45 a.m. today at the Plymouth Road Transit Center north of I-394.

"These coaches represent the first steps in Metro Transit's fleet diversification program," said Ted Mondale, chair of the Metropolitan Council, which oversees transit in the Twin Cities. "By yearend, we also expect Metro Transit to order about 25 small neighborhood friendly buses that will be used to feed transit hubs."

"I am pleased that Metro Transit has elected to deploy the first bus on its services in the western suburbs," said Rep. Jim Rhodes, whose district includes St. Louis Park. "I am sure our bus-riding constituents will appreciate the added amenities of this bus and Metro Transit's desire to make transit even more attractive."

The 57-passenger coach buses are manufactured by Motor Coach Industries of Des Plaines, Ill. They are equipped with wheelchair lifts and are intended primarily for longer distance freeway service where its comfortable ride characteristics can be demonstrated.

The Metropolitan Council approved leasing the two coaches. The lease includes an option to buy the buses after the first year of service or return them to the manufacturer.

"We will test the buses to determine both how customers react to them and how well they operate in our service area," said Arthur T. Leahy, Metro Transit general manager. "When we know those answers, we will make a recommendation about making this style of bus a permanent part of our fleet." The new coaches offer Metro Transit important additional capacity at a time of fast growing ridership. In August and September, the agency recorded 6.5 million rides each month. The last time ridership reached that level was more than a decade ago.

"Metro Transit ridership so far this year is 10 percentage points better than last year," Mondale said. "We have achieved that growth with only a four percent increase in capacity, indicating a strong demand for transit service. Our goal is to double the capacity of the transit system by the year 2020 to help the region cope with growing congestion."

Metro Transit is one of the largest transit systems in middle America. It operates 125 local, express and contract routes. Customers boarded its buses more than 66 million times last year.

MICHIGAN: UAW, Ford keep negotiating as deadline looms

DETROIT -- Negotiations over a new contract for about 100,000 workers continued Thursday between the United Auto Workers and Ford Motor Co. as a union-set deadline of 11:59 p.m. Friday approached, the Associated Press reported.

Talks went late into the evening Wednesday and resumed early Thursday morning.

The UAW's setting of a deadline at Ford could signal trouble over Ford's plan to spin off or sell its parts unit, Visteon. UAW leaders have been vigorously opposed to a spin-off of Visteon, which has about 23,500 UAW members, saying it could lead to pay cuts, plant closures and fewer union jobs.

During the Labor Day parade in Detroit, many marchers carried signs depicting Visteon as "the alien within" Ford.

The disagreements are a change for Ford, which has emphasized its close relations with the union for several years. The last time the UAW held a national strike against the company was 1976.

The Ford talks continued as workers at General Motors Corp. and its former parts unit voted on new contracts. The four-year deals provide raises of 3 percent a year, a $1,350 signing bonus and improvements in pensions and work rules. They also allow workers at Delphi Automotive Systems to transfer back to GM when openings occur.

The UAW is expected to announce the results of the ratification votes early next week.

WASHINGTON: NLRB rules on union organizing fees

WASHINGTON -- Non-union employees working in so-called closed shops can be required to pay fees used for union organizing activities, a divided National Labor Relations Board has ruled, the Associated Press reported.

"Unions are able to negotiate higher wages for the employees they represent when the employees of employers in the same competitive market are organized, and unions are less able to do so when they are not organized," said the board in a written opinion issued Thursday.

"Thus, represented employees, whether or not they are members of the union that represents them, benefit ..."

The AFL-CIO has long pushed for such a change, said the labor federation's general counsel, Jon Hiatt.

"Our position has been that organizing does have a very direct relationship to collective bargaining and therefore it should properly be seen as a chargeable expenditure," said Hiatt.

"When a union has organized all the supermarkets in a given city they are going to be in a much better position to bargain good benefits and wages for their workers than if they only organized one supermarket in that city," he said.

The NLRB's 4-1 ruling came in a dispute over union fees charged to supermarket workers and meat cutters who withdrew from the United Food and Commercial Workers International Union.

The National Right to Work Legal Defense Foundation, which opposes compulsory union dues, said it will challenge the board's ruling in the U.S. Court of Appeals for the District of Columbia.

"The Clinton NLRB has turned its back on America's working men and women, who will now be fired if they decline to finance big labor's empire building," said Stefan Gleason, vice president of the foundation.

Thousands of labor contracts require workers who choose not to join the unions representing them to pay fees similar to what union members pay in dues.

However, in a 1988 ruling the Supreme Court said that unions may not use money from nonunion workers for any purposes other than collective bargaining.

In the 1988 case, 20 employees of AT&T in Maryland sued the Communications Workers of America, contending they should have the right to withhold a portion of their non-member fees to avoid subsidizing union political goals they didn't agree with.

In the case before the NLRB, supermarket and meat processing workers in Michigan, Colorado and California who quit the food workers union in 1989 complained they continued to be charged non-member fees that helped pay for union organizing activities.

The NLRB, which acts as an out-of-court referee of labor-management disputes, ruled they should have to pay, saying recruiting new members indirectly bolsters a union's bargaining clout to the benefit of members and non-members alike.

J. Robert Brame III, a dissenting board member, said the majority's opinion contradicted past rulings in which the Supreme Court has even more specifically addressed this question.

TEXAS: RailTex announces sale of Salt Lake City Southern RR

SAN ANTONIO -- RailTex, Inc. (Nasdaq: RTEX) announced that the Company has completed the sale of 100% of the stock of the Salt Lake City Southern Railroad ("SLCS"), a wholly-owned subsidiary of the Company, to the Utah Railway Company ("URC") for $675,000, the company said in a press release.

Proceeds from the transaction will be used to reduce RailTex's senior credit facilities and for general corporate purposes. RailTex will record a gain of approximately $500,000 (or $0.03 per share) on the transaction.

"The sale of SLCS is consistent with RailTex's strategy of continually analyzing its portfolio of railroads and divesting properties which do not meet the Company's overall objectives," said Ron Rittenmeyer, RailTex Chairman, President and CEO. "The SLCS, although operating over only 25 miles, has been a good performer since 1993. However, since we have no other investment in Utah, the sale allows the Company to allocate its resources where the greatest synergies and returns can be achieved."

With approximately 4,100 miles of track, RailTex is North America's leading short line railroad organization. Its holdings include short line railroads concentrated in the Southeastern, Great Lakes region, New England and Central United States as well as Eastern Canada.

FRANCE: France softens stance on rail access

LONDON -- France has eased its hard-line stance against cross-border rail competition, boosting the European Union's hopes of reaching an agreement to open the market by the end of the year, the Journal of Commerce reported.

While France remains opposed to full-scale deregulation of state rail monopolies, it said freight hauled by private foreign operators could cross its territory en route to other countries.

The proposal, issued at a meeting of EU transport ministers in Luxembourg, was aimed at appeasing governments that want to open the market to all rail operators registered in the 15-nation bloc.

France, backed by Belgium and Luxembourg, earlier had called for a three-year study of the economic impact of deregulation, prompting accusations that it was just wasting time.

The French move has opened the possibility of a two-tier system developing across Europe, with rail competition stretching from Scandinavia through Germany and the Netherlands to Italy, while France, Belgium and Luxembourg would retain state control over the market for the foreseeable future.

But by allowing foreign rail freight operators to use its rail network, France no longer would cut off Spain and Portugal from the deregulated market in the rest of Europe.

Finland, which holds the EU's rotating presidency, originally proposed opening the market only to transit services, with cross-border services allowed after three years. France and its allies were offered a five-year exemption, although its rail companies would be barred from entering liberalized markets.

Britain is the only EU country with a completely open, privately owned rail industry, while Sweden and the Netherlands have deregulated their freight markets and Germany is preparing to privatize state-owned DB Cargo.

France's concession is unlikely to appease its shippers, which complain about the poor performance of state-owned monopoly SNCF, nor its ports, which say the lack of rail links is driving cargo to rival European ports.

The European Commission, the EU's executive agency, has warned that freight will disappear from the rail network within 15 years unless the market is opened. Rail's share of the EU's freight market has crashed from 32% in 1970 to just over 13% in 1998, while truck and barge traffic has continued to grow.

Recent initiatives, including rail-freight freeways that give freight priority over passengers, have failed to halt the decline.

The French proposal may not be sufficient to jump start the negotiations and also risks antagonizing the country's militant rail unions, which have threatened nationwide strikes if outsiders are allowed to compete with the state-owned system.

Jean Claude Gayssot, the French transport minister, says railroads already face competition from rival modes. Rather than compete, he says, the industry should cooperate to boost its market share.

WASHINGTON: Republican tries to make it impossible to sue truckers

WASHINGTON -- The Transportation Department said Thursday a provision buried in spending bill passed by Congress would make it impossible to take federal legal action against truckers violating safety regulations.

But the author of the provision, Rep. Frank Wolf, R-Va., said it was a necessary jolt to a system that hasn't done enough to confront the problem of unsafe trucks.

The $50 billion spending bill, which President Clinton is expected to sign into law, bars the Office of Motor Carriers and its parent agency, the Federal Highway Administration, from spending money on some safety activities. Wolf and other critics say the OMC has had too cozy a relationship with the trucking industry and its safety responsibilities should be moved elsewhere.

Transportation general counsel Nancy McFadden, in testimony before a House Transportation panel Thursday, said most OMC safety work, including rule issuance, compliance reviews and border inspections, will be shifted to other department offices and will not be interrupted.

But she said that under current law only the federal highway administrator can assess civil penalties for violations of truck safety regulations and that enforcement efforts "would be severely hampered by this legislation."

State civil actions would not be impeded and safety officials will still be able to take out of service a truck that poses an imminent hazard. But federal agents "will not be able to pursue a violation by initiating a civil penalty action or seeking an injunction."

Rep. Nick Rahall, D-W.Va., the ranking Democrat on the ground transportation subcommittee, said that "under some misguided notion of trying to promote truck safety, the appropriations bill instead effectively guts the federal motor carrier safety program."

But Wolf, chairman of the House Appropriations transportation subcommittee, said the bill moves the government "another step closer to significantly improving motor carrier safety."

Wolf said "there are bound to be a few bumps in the road" in restructuring the trucking safety system, but expressed confidence the Transportation Department could transfer the OMC's safety functions without major interruptions.

Sen. John McCain, R-Ariz., chairman of the Senate Commerce Committee, which oversees transportation policy, urged the president in floor speech Monday to veto the spending bill so it could be amended to take out the Wolf language.

"It is very shortsighted and a serious jeopardy to public safety if Congress shuts off funds for motor carrier safety activities," he said.

Another solution would be for Congress to quickly enact legislation delegating new authority to the Transportation Department to enforce penalties against violators.

"It is an emergency, a serious problem, and we've got to deal with it," said Rep. Bud Shuster, R-Pa., chairman of the House Transportation Committee.

More than 5,300 people died in truck-related accidents last year, and the administration is committed to cutting that number in half. But Wolf has argued that the OMC is not the right agency to accomplish that because the main focus of the Federal Highway Administration is highway construction programs.