UTU News Digest - Wednesday, September 29, 1999

UTU Daily News Digest

Information of interest to operating railroad and transportation employees

Wednesday, September 29, 1999

MISSOURI: Jury slaps Union Pacific with $150 million verdict

KANSAS CITY -- A state court jury has slapped the nation's largest railroad company with a staggering verdict, ordering Union Pacific Railroad Co. to pay more than $150 million in damages to a young mother severely injured in a 1997 rail-crossing accident.

In a decision late Tuesday afternoon, the Jackson County jury ordered that Union Pacific Railroad pay $120 million in punitive damages to 34-year-old Kimberly Alcorn of Sedalia, Mo.

Union Pacific Railroad, a unit of Union Pacific Corp., knew that the rail crossing where the accident occurred was poorly marked and dangerous but did little to correct the problem, the jury found.

The $120 million award came on top of actual damages of $40.37 million awarded by the jury on Monday. The jury ordered that Union Pacific Railroad pay 75 percent of the actual damages. Amtrak, the operator of the train involved in the accident, was ordered to pay 25 percent of the actual damages.

Union Pacific Railroad officials could not be reached for comment. Union Pacific Railroad is one of the largest railroads in North America, serving 23 states with 33,705 miles of track.

A spokesman at Amtrak, which is also known as the National Railroad Passenger Corp., said it was likely that the mostly government-owned company would appeal the jury's verdict.

The verdict is the largest ever awarded in Missouri stemming from a railroad crossing accident and is one of the four largest verdicts in the country in similar cases, said Thomas Jones, Alcorn's attorney.

"The jury sent a message to Union Pacific to try to tell them to do the right thing and take care of their dangerous railroad crossings,'' Jones told Reuters following the verdict.

Alcorn was a passenger in a car driven by a friend that was hit by the Amtrak train in August 1997. During the trial, her lawyers said Alcorn sustained brain damage, a broken back, more than 20 broken bones overall, and other permanent crippling injuries.

The train was traveling on a Union Pacific rail line, and the rural crossing where the accident occurred was poorly marked and lacked warning lights and protective gates, the woman's lawyers said at the trial.

State officials had warned Union Pacific that the crossing was dangerous nearly a year before the accident, and a similar accident occurred in April 1997, Jones said.

In finding for the plaintiff, the jury said that Union Pacific had acted "with complete indifference to or conscious disregard for the safety of others.''

In the case against Amtrak, Alcorn's attorneys alleged that the engineers manning the train blew an emergency warning whistle but did not attempt to slow down the train when they saw the car Alcorn was riding in approaching the railroad crossing.

The train was traveling about 70 miles an hour when it hit the car, the lawyers said.

ENGLAND: UK's Prescott says rail companies remain on "probation"

BOURNEMOUTH -- U.K. Deputy Prime Minister John Prescott Wednesday called for the rail industry to improve the performance of its services.

Speaking at Labour's annual conference, Prescott, who is also Secretary of State for the Environment, Transport and the Regions, said the industry has made some efforts and the "first signs of improvement are starting to show."

"But I say to the rail companies, you are on probation," he said. "By the next spring rail summit, we will judge how far you have advanced," he said.

Prescott said he has issued new instructions to the industry regulator, the Strategic Rail Authority, to start the renegotiating of rail franchises. The SRA was set up to safeguard the public interest and develop the rail network.

"Everyone agrees we now have a watchdog with a bite as well as a bark," he added.

The rail industry is getting more investment in 10 years than in the past 100 years, Prescott said.

While highlighting the government's efforts to improve rural bus services, Prescott also stressed that the Labour government isn't anti-motorist.

He denied reports that the government is considering a reduction in the speed limit and planning a policy to prosecute anyone driving at over 30 miles per hour in towns.

"Anti-motorist - not true," he said. "How could I be anti car, driving two Jags?"

But there needs to be a better balance between the use of public and private transport, he said.

The government will be handing over a GBP5 billion "legacy" to the new London mayor, he said, indicating the amount to be spent on London transport. Mayoral elections will be held on May 4, 2000.

Prescott said that the government is about to double the size of the U.K. merchant navy fleet, which is registered in Britain.

MASSACHUSETTS: Connecting north-south stations could pay off for Boston

BOSTON -- With the Big Dig more than halfway done, is it time to start on Big Dig II?

A five-year, $4 million study nearing completion by the Massachusetts Bay Transportation Authority says yes. The study found that drilling beneath downtown Boston and connecting North and South stations with a 1.1-mile, four-track train tunnel would yield huge transportation benefits and could even pay for itself, the Wall Street Journal reported.

Perhaps the most shocking conclusion of the report so far is that the cost of linking Boston's primary train stations has actually gone down since the first study of the project was completed in 1993. The study has the project's price tag at $3.68 billion, which, after adjusting for inflation, is 35% less than the 1993 figure. That's mostly because new electric-diesel locomotives significantly reduce the number of tracks that need to be electrified for the project.

"Everybody should get down on their knees and pray that it happens," says Bob O'Brien, chairman of a citizens advisory committee that is reviewing the study.

For the project to proceed, the full report needs to be published and subjected to comments from the public and the Massachusetts Bay Transportation Authority. Finally, the project backer -- which could be the MBTA, Amtrak or another entity -- would issue a proposal with specific plans.

And before it even gets to start that gantlet, one other step has to be taken: The authority has to finish the report. But despite the overwhelmingly positive findings, the report remains trapped in bureaucratic gridlock, according to members of the advisory committee and other people familiar with the study. The six-chapter report is two years behind schedule. The final chapter, which would focus on ways to finance the project, has been rejected and sent back several times for revisions by officials at the Massachusetts Bay Transportation Authority, the regional rail authority conducting the study.

"This report is way overdue," says John Deacon, who represents the National Association of Railroad Passengers on the advisory committee, which was asked by the Massachusetts Executive Office of Environmental Affairs to comment on the study. If the report is published, the office will determine if the plan meets its standards for protecting the environment.

Mr. Deacon and others say the rail authority has stalled completing and releasing the analysis because it fears it will be attacked for advocating a mammoth project with a huge price tag while the state is struggling to pay for the $12 billion Big Dig highway project, which is still at least four years from completion.

Hasty Evans, the former director of planning for the MBTA who quit in August, unhappy with cost overruns, says the agency plans to release only the construction portion of the study. The chapter on financing options "has been complete in several forms for many months, but its release has been quashed," she says.

Kevin Sullivan, the state's secretary of transportation, says the study isn't being kept under wraps. The report is late, he says, because of a debate among the MBTA, the consultant involved and the Federal Transit Administration "to make sure it reflected reality, to make sure the right modeling went in."

Mr. Sullivan says the state is spending $3 billion on other transportation improvements and until there's a solid plan to pay for the rail link, the project won't move ahead. "I have not figured out how to pay for this nor has any advocate," he says. "They must prove there are ways of financing this that don't put those other priority projects in jeopardy."

He says the rail link "is a good project but in the scope of what we have on our plate now, it's a very difficult project to even say you're going to advance."

Plans for a track connecting North and South stations go back nearly a century. According to one historian, an effort in 1909 was stymied by the taxi industry and by the competing railroads that served the two stations. Interest in linking them revived about 10 years ago when Boston was gearing up for the Big Dig, the massive highway project that built a third tunnel to East Boston and is burying the elevated Central Artery of Interstate 93. Initially, officials said it was impossible to build the rail tunnel underneath the city because the infrastructure there blocked the way.

But in 1993, the Central Artery Rail Link Task Force, appointed by then-Gov. William Weld, concluded the project could be built beneath the buried artery. Later that year, a Federal Transit Administration study came to the same conclusion.

Those reports fed the hopes of rail buffs and transportation planners, who had long viewed the underground rail tunnel as the missing link in public transportation for the entire East Coast. Without the link, train passengers traveling through Boston have to get out at either North or South stations and take a taxi or subway to the next station to complete their journey. That one-mile gap, they say, is an enormous hurdle that keeps travelers off the rails and in cars and airplanes. Project supporters claim that all of northern New England is cut off from the Amtrak rail network stretching to Florida as a result of the gap.

Recent improvements in rail service make the absence of the North-South connection more noticeable. Rail operator Guilford Rail Systems Inc. of North Billerica, Mass., is renovating tracks north of Boston so that Amtrak can restart passenger service between North Station and Portland, Maine, which is expected to start in fall 2000. Though delayed until next year, Amtrak is nearing completion of its high-speed Acela service between South Station and New York.

The current study began in 1994 when Amtrak gave the MBTA $4 million for a detailed report that would include a draft environmental impact statement and a major investment study. As the operator of eastern Massachusetts' commuter rail system and Boston's subway, the MBTA was the obvious choice to undertake the study.

Five chapters of the study have been completed, according to planning officials who have seen them, and a sixth, final chapter has been under revision for more than a year. According to a July 1999 summary of the study, the costs of the rail link have dropped to $3.68 billion, down from $5.69 billion in the first study. (All numbers are in 1999 dollars.) The biggest sources of potential savings include:

Reduced construction costs. New tunneling technology will enable the rail link to be built underneath the sunken Central Artery without expensive modifications to the artery.

Less rail electrification. By using new electric-diesel locomotives, only a small part of the MBTA's commuter rail lines will have to install expensive overhead electric lines.

Reduced equipment costs. The dual-mode locomotives will make it possible to continue using existing coaches.

The summary says the MBTA would save $69.4 million a year because of the increased flexibility possible with the tunnel. Trains starting on the North Shore wouldn't have to sit idle at North Station until it was time for their return trips. They could travel through the tunnel and serve South Shore routes. Thus, the MBTA could serve its commuter lines with fewer locomotives and coaches, and save on staffing them. In addition, it would be much easier to move trains from the South Shore lines to a maintenance yard in Somerville.

The new report is the clearest indication yet that the link could be more than just pricey wish fulfillment for rail enthusiasts. The MBTA says ridership on its North Shore lines increased to 13.3 million for the year ended June 30, compared with 9.1 million for fiscal 1994. The report suggests that Boston's transit system could quickly become clogged if the new tunnel isn't built. "Buried in the no-build assumptions is a doomsday gridlock scenario," says Mr. O'Brien of the advisory committee.

Mr. O'Brien and others who have seen the summary report say the new tunnel could prevent a looming shortage in rail capacity. The report shows that by 2010, the regional rail system will be unable to accommodate 29,000 daily riders because of a shortage of tracks and commuter parking. If the tunnel were built, the report says, the trains would get 90,000 more daily riders.

The rail tunnel could also ease capacity problems on subway and bus lines: Many riders who now transfer from North or South stations to subways or buses to reach their final destinations could stay on the commuter rail trains for their entire trip.

But a huge challenge for the project, supporters acknowledge, would be raising money.

The summary report identifies numerous options. They include:

Additional fares from new passengers and reduced operating costs, which could pay down as much as $1.65 billion in revenue bonds.

Third-party financing of cars, which could reduce capital outlays by $500 million.

Retail, restaurant and advertising revenue from two new underground stations near the North and South stations, and a new central station to be built near the Blue Line's Aquarium station.

Income from developing freed up real estate, including the North and South station areas. The authority could develop the Boston rail yards once it starts storing trains out of town.

The report says that even if none of the potential income from commercial development materialized, the shortfall could be covered by increasing rail fares by $1.50 a trip for all passengers, and $3.77 a trip for passengers using the tunnel. For some riders, the increases would be partly offset by not having to pay subway or bus fares.

But the report cautions that its exploration of funding "by no means constitutes anything remotely approaching a credible finance plan." It cites numerous bureaucratic obstacles to financing, such as the MBTA's inability to sell bonds against anticipated revenues.

James RePass, president and chief executive officer of the National Corridors Initiative, an advocacy group seeking improved ground transportation and better coordination among types of transport, says that the MBTA should shed its fears about the cost of the project and try to move ahead. "This is an opportunity disguised as a problem," he says.

GERMANY: Transrapid train project to be derailed

BERLIN -- Whizzing along a monorail at more than 250 mph, the Transrapid was supposed to be the future of rail travel in train-loving Germany.

But the prestige project seems about to grind to a halt after Chancellor Gerhard Schroeder's government gave new signs Tuesday that it intends to pull the plug.

Long opposed by environmentalists who claim its electromagnetic radiation is a health hazard, the Transrapid has been doomed since the center-left coalition came to power last fall with the ecology-minded Greens as junior partner.

Schroeder's recent drive to cut federal spending has made it even less likely the government will step in to save the sleek magnetic levitation train.

"As far as I'm concerned, the Transrapid is headed for a coffin,'' Kerstin Mueller, a leading Greens legislator, said Tuesday.

Scrapping the Transrapid would kill a prestige technology project and export hope for German industry.

Already, industry took a hit Tuesday when shares in Thyssen Krupp, the project's driving force, dropped 5 percent on the Frankfurt stock exchange after the government's latest statements.

Several firms in the consortium to build and operate the train have indicated they're ready to scrap the project, said Social Democrat lawmaker Wilhelm Schmidt. He gave no details.

The gliding train, driven by electrically generated magnetic forces on a cushion of air, would cut travel time between Berlin and Hamburg by two-thirds, to just under an hour in the first intercity link of its kind.

But Schroeder's Social Democrats and the Greens insist the government will pay only the $5.8 billion pledged by the previous government - though the total cost is expected to be 50 percent higher.

Recent studies predicting that the proposed link between Germany's two biggest cities would attract fewer passengers than originally expected have bolstered skeptics.

A last-minute idea by Schroeder's side - building a single 185-mile track instead of two - also seems a nonstarter.

The governing parties agreed late Monday to approve that version only if it makes economic sense - which the Greens and the German railways have already said it doesn't.

Schroeder said Tuesday the government is reviewing the entire project, but added: "The train will run if it is economically viable.''

Opponents, in addition to citing high costs, argue the electromagnetic fields driving the train could be unhealthy for people and animals. Environmentalists say the tracks will endanger wildlife habitats in northern Germany.

Some conservative opposition politicians urged the government to take the plunge, saying the project would create jobs.

"A single-track version would be an acceptable solution,'' said Dieter Posch of the small, pro-business Free Democrats.

MICHIGAN: GM, UAW pact mirrors DaimlerChrysler agreement

DETROIT -- The tentative labor contract reached late Tuesday night between General Motors Corp. (GM) and the United Autoworkers of America largely mirrors the DaimlerChrysler labor pact, according to union sources.

As expected, the four-year contract includes a 3% pay hike each year and a $1,350 signing bonus, according to several UAW local presidents who spoke to Dow Jones Newswires on condition of anonymity. Where it differs from the DaimlerChrysler pact is that instead of getting Christmas bonuses of up to $600, GM's 143,000 UAW workers will get four extra vacation days each year around the Fourth of July. Currently, an assembler at a GM plant makes about $21 an hour.

Negotiators also reached a similar labor agreement with Delphi Automotive Systems Corp. (DPH), GM's former parts unit, which was spun off earlier this year. Unique to that pact, Delphi's 46,000 UAW workers will have until Jan. 1, 2000, to retire and receive GM pensions. The contract also allows Delphi workers to transfer back to GM when jobs become available.

"It's a great deal for us," one local president told Dow Jones Newswires. "I don't see any reason why it won't be approved."

Details of the contract will be presented to GM's UAW leadership later this week and then the accord will be voted on by the entire union membership.

With GM's labor negotiations ostensibly over, focus shifts to Ford Motor Co. (F). Talks there, analysts and union presidents said, are expected to be more difficult.

It's widely understood that Ford wants to spin off its Visteon parts unit. Both the DaimlerChrysler pact - which the union approved over the weekend - and the GM contract include a clause that says the auto makers agree not to sell or spin off any units over the four-year life of the contract. Some analysts have speculated that Ford will still spin off Visteon under an agreement similar to the one GM has with Delphi, allowing workers to remain in the union and transfer back and forth between the two companies.

VIRGINIA: Norfolk Southern expands European marketing presence

NORFOLK -- Norfolk Southern Corporation (NYSE: NSC) said that Karsten Jespersen has been named executive representative for Merchandise Marketing in Europe, based in Brussels, Belgium.

Jespersen will represent Norfolk Southern in industrial development, merchandise traffic and intermodal traffic matters.

A native of Denmark, Jespersen studied logistics and languages at Handelshojskolen and Hecksher Lineragencies AS in Copenhagen. He served in various sales and marketing positions for Leman International Systemtransport AS, Moiroud S.A., Haugsted GmbH and most recently Chr. Jensen Chartering & Shipagency Ltd., before joining Norfolk Southern.

"As a result of the Conrail transaction, Norfolk Southern has access to every major port on the East Coast, and accordingly, increased access to markets overseas, particularly in Europe," said Robert E. Martinez, assistant vice president International Marketing. "We look forward to increasing our availability and service to European customers and to pursuing new transportation initiatives with them."