UTU Daily News Digest

Information of interest to operating railroad and transportation employees

Tuesday, February 15, 2000

PART 1 of 2

WASHINGTON: UTU, railroads reach 'cramdown' agreement

WASHINGTON -- The United Transportation Union (UTU), which represents train crew members, and negotiators for the nation's major railroads reached agreement for legislation that will end what labor calls 'cramdown,' the practice of railroads overriding or modifying collective bargaining agreements to achieve the benefits of mergers, the Journal of Commerce reported today.

A spokesperson at the National Railway Labor Conference, which represents the major carriers, expressed hope that the agreement could be a template for other rail unions, and will lead to quick action by Congress.

Ending 'cramdown' was a condition for labor support of railroad efforts to pass legislation reauthorizing the existence of the Surface Transportation Board, which has been stuck in Congress for more than a year.

Railroads are seeking a so-called clean reauthorization bill that simply extends the existence of the board with no changes in current regulatory policy. Some shippers have been seeking to mandate shipper-friendly provisions. The cramdown agreement would become part of the STB reauthorization legislation.

Under the agreement reached late last week, if it becomes law, the union will have the right to pick which contract applies when railroads merge.

''This is the real thing and we believe it will act as the template for other unions interested in ending cramdown,'' said Charles L. Little, UTU international president. ''Now unions cannot be beaten out of favorable collective bargaining agreements by the railroads using the exemption provision in the Interstate Commerce Act.''

Other rail unions are studying the UTU agreement, and the carrier spokesperson said it could be adapted to the specific concerns of different crafts.

Until the agreement becomes law, however, the Class I carriers belonging to the National Carrier Conference Committee, which actually bargains for the railroads, have agreed to be bound by its terms. Those railroads include Union Pacific, Norfolk Southern, CSX Transportation, Burlington Northern Santa Fe, and Kansas City Southern.

Late last year, carriers and unions announced they had reached an agreement providing for a moratorium on carriers seeking to change labor agreements. That agreement collapsed within a day when labor and carrier negotiators could not agree one the length of the moratorium they had announced.

''Where there is more than one collective bargaining agreement, the union -- not the carrier -- will pick which contract applies,'' said Little. If the union fails to select an agreement, an arbitrator will pick the agreement most beneficial to employees on rates of pay, rules, working conditions, and crew consist agreements.

Certain seniority conditions will be subject to modification, but the agreement specifies that employees will not 'lose their seniority date on any territory where they previously held seniority and they shall be permitted to exercise such seniority.' Furthermore, employees cannot be forced to a new location until they exhaust all seniority at their home location.

CANADA: Canadian National, Burlington Northern guarantee same service

MONTREAL -- Canadian National Railway Co. (CNI) and merger partner Burlington Northern Santa Fe Corp. (BNI) said they will guarantee shippers "equal or better" rail service following the merger, Dow Jones reported.

In a news release, the railroads said they will also guarantee route options for shippers, which means keeping existing gateways open after the proposed merger closes and assuring a rail alternative for those very few shippers who would otherwise have one railroad to use.

They said the guarantees reflect their confidence that the merger "will set a new standard for rail service and competition."

In December, the railroads announced plans to merge through a new company, North American Railways Inc.

NEW ORLEANS: AFL-CIO leaders to discuss election strategy

NEW ORLEANS -- AFL-CIO leaders are meeting to set strategy for the congressional elections, despite continued opposition by two major unions to the labor federation's endorsement of Vice President Al Gore, the Associated Press reported.

The AFL-CIO is committing $40 million to help Gore win the presidency and regain control of Congress for its allies -- traditionally Democrats.

The unions plan to press congressional candidates on China's trade status, a minimum wage increase being pushed by Democrats and proposed regulations Republicans have tried to block that would protect workers from repetitive-stress, or ergonomic, injuries on the job.

House Minority Leader Dick Gephardt, D-Mo., is to meet with the labor leaders Tuesday, hoping to solidify support for Democratic candidates. He would stand to become speaker should his party take control of the House.

The AFL-CIO plans to focus its attention on about 65 close House races and 14 Senate contests -- as usual generally backing Democratic candidates. Political director Steve Rosenthal predicted labor may lend its support to about 25 Republican candidates this year.

"We actively look for more moderate Republicans, but they are harder and harder to come by," he said.

The AFL-CIO's executive council chose New Orleans for its annual midwinter meeting partly to highlight the strength of labor unity in overcoming opposition. The city was the site of a six-year battle to organize shipyard workers that was won last fall.

But all is not unified on the political front.

The International Brotherhood of Teamsters and the United Auto Workers, which opposed Gore's early endorsement by the federation in October, represent a combined 2 million of the 13 million members of AFL-CIO's 68 affiliated unions.

Campaigning for Gore by union workers is already off to a strong start in primary states across the country, but Rosenthal said, "Really, in some ways, we're hamstrung by not having every union on board."

Teamsters government affairs director Mike Mathis said Gore has gained ground with the union's rank and file since fall polls showed that among Teamsters, the vice president was in a dead heat with former New Jersey Sen. Bill Bradley, a Democrat, and Texas Gov. George W. Bush, a Republican.

Neither the Teamsters nor the UAW are expected to make presidential endorsements this week, even though the executive council scheduled a private meeting with Gore on Thursday.

"I think the AFL-CIO would very much like everybody to do a nice standup and applaud and just listen to him," Mathis said. "I don't know that (Teamsters President) Jim Hoffa is going to let them do that."

Adding to tensions, other labor leaders share the Teamsters' and the UAW's biggest disagreement with Gore: the vice president's support for the Clinton administration's push to give China permanent normal trade status with the United States as part of the process for China to gain entry to the World Trade Organization.

The executive council is to meet Wednesday with Labor Secretary Alexis Herman, who helped negotiate the trade deal with China last year that now awaits congressional action.

The labor leaders say China's poor record on workers' rights and human rights should rule out new trade privileges. They will use the issue as a litmus test for congressional candidates this year.

The UAW already has begun an ad campaign in Washington, D.C., newspapers -- "You can't have free trade without freedom" -- to let lawmakers know what they could see in their districts later this year.

The executive council will discuss additional tactics, including the possibility of a mass demonstration in Washington similar to those that crippled a WTO meeting in Seattle in December.

MASSACHUSETTS: Big Dig managers blasted by U.S. government

BOSTON -- Federal overseers blasted managers of the "Big Dig" highway project in a report released Monday, following revelations that the nation's most expensive public works project is plagued by $1.4 billion in cost overruns, Reuters reported.

The U.S. Department of Transportation Inspector General's office report criticized an "alarming lapse of oversight" by the Federal Highway Administration and the director of the Central Artery Project.

Set to be completed in 2005, the so-called Big Dig includes a plan to bury an elevated highway through downtown Boston.

On Feb. 1, Massachusetts Turnpike Authority Chairman James Kerasiotes revealed the price tag on the project had surged by $1.4 billion to $12.2 billion.

Kerasiotes said he had known about the overrun earlier but waited to disclose it until he could figure out a way to pay for it.

The revelation came on the same day the Federal Highway Administration approved the 1999 finance plan submitted by Big Dig managers, which did not include the cost overrun.

On Friday, the U.S. Securities and Exchange Commission launched an inquiry into whether Massachusetts officials misled investors and bond rating agencies by omitting information about the full extent of cost overruns on the project that is running three years behind.

The Inspector General's office report was especially critical of Big Dig officials for strongly disagreeing with findings in an October draft report that found the project was $942 million over budget.

An October letter from project director Patrick Moynihan to Kenneth Mead, the inspector general, opens: "I cannot allow the factual errors, misstatements and misleading calculations that riddle your office's draft report on the Central Artery/Tunnel Project costs to be foisted on the public as a true picture of the Big Dig."

Massachusetts has turned to various state authorities and their ability to float debt to finance its 15 percent share of the project. The federal government is slated to supply the remaining 85 percent of funding.

Jeremy Crockford, a spokesman for one of the state agencies, the Massachusetts Turnpike Authority, explained that in October the Big Dig was in the midst of coming up with its own accounting, and felt that naming a dollar figure on the amount of the overrun would "muddy" the picture.

As for the letter, Crockford said: "I think Pat would be the first one to admit the tone was probably too harsh."

Crockford added that Moynihan had placed a call to Mead's office to let him know that Big Dig officials "intend to cooperate fully."

U.S. Rep. Barney Frank, a Democrat, said it was "very unlikely" that the federal government would be willing to cough up more money for the project.

Rather, he said, Gov. Paul Cellucci would have to redirect state money -- and give up his efforts to cut the state's income tax -- in order to cover the shortfall.

"They've got to put more state money into a state project that is more expensive than they thought it would be -- while they were running it," Frank said, referring to Cellucci and his predecessor William Weld, both of them Republicans.

WISCONSIN: Hauling freight could become moneymaking answer for Amtrak

MILWAUKEE -- Amtrak believes one way to save passenger trains could be to turn them partly into freight trains, the Milwaukee Journal-Sentinel reported.

It's an idea that bothers passenger advocates and some freight railroads alike. But it's one of the few options open to an organization under orders to break even in a business that hasn't turned a profit in decades.

And in Wisconsin, it means that new passenger trains could be running from Madison and Janesville to Chicago and from Milwaukee to Fond du Lac as early as this year.

As Amtrak faces a congressional deadline to wean itself from federal subsidies by Oct. 1, 2002, a key part of its strategy is to earn more money from carrying mail and express freight on passenger trains.

That's a concept that dates back to the days when freight railroads ran passenger trains, and Amtrak has had the same right since it was formed in 1971.

As long as Amtrak was carrying mainly mail and small packages, it didn't bother freight railroads, who by law must allow Amtrak to run on their tracks. Amtrak even calls the business simply "express," omitting the word "freight" to avoid offending the freight railroads.

But when a Texas brewery wanted to use refrigerated cars on Amtrak trains to ship its beer faster than trucks or regular freight trains could deliver, the freight railroads complained Amtrak was overstepping its bounds. The federal Surface Transportation Board ruled in Amtrak's favor in May 1998, clearing the way for the express freight business to expand.

By August of that year, Amtrak's monthly express freight revenue had nearly doubled. Its business plan now calls for express freight revenue to grow from $6.8 million in the fiscal year ending Sept. 30, 1998, to $94.8 million in the fiscal year ending Sept. 30, 2002 - a near 14-fold increase in four years.

"We are bullish about marketing the business," Amtrak President George Warrington said through a spokesman. "We know we can compete by offering a better service at a lower price."

Serving express freight customers also has given Amtrak a way to add routes that might not be economically feasible if they were carrying passengers alone.

In Wisconsin, Amtrak has studied two routes for passenger and express freight trains: one from Madison and Janesville to Chicago along the Wisconsin & Southern Railroad tracks, and one from Milwaukee to Fond du Lac along the Wisconsin Central Ltd. tracks.

Amtrak is now in negotiations with Wisconsin & Southern on the Madison-to-Chicago route, said Bill Gardner, chief executive officer of the Milwaukee-based freight railroad. Those talks could be completed within two months, and if the parties reach agreement, service could start a month later, he said.

The trains would be operated directly by Amtrak on the current tracks, which have a 35-mph speed limit between Madison and Fox Lake, Ill., Gardner said. His company originally sought to run the trains itself and had pushed for a $75 million upgrade to boost the speed limit on that stretch of track, which is owned by the State of Wisconsin.

A Wisconsin Central spokeswoman referred all questions about the Milwaukee-to-Fond du Lac line to Amtrak.

Amtrak spokesmen said they could not comment until later this month, when the railroad releases a nationwide market analysis of how to revise its routes to increase its market share and improve its finances.

But passenger advocates warn that a strategy helping Amtrak's bottom line could actually detract from its core business of serving passengers.

That's because the schedules most convenient for express freight customers are not necessarily the schedules most convenient for passengers, and dealing with freight cars can slow down passenger trains, warn Ross Capon, executive director of the National Association of Rail Passengers, and Tony Haswell, the association's founder.

One example is Amtrak's new Kentucky Cardinal service, from Chicago to Louisville, Ky.

While it provides passenger rail service to a major city that hasn't had any for years, the Kentucky Cardinal runs as a branch of Amtrak's red-eye Chicago-to-Indianapolis line, leaving Chicago at 8:10 p.m. daily and arriving in Louisville at 8:40 a.m. the next day. The return trip leaves Louisville at 10:25 p.m. daily and arrives in Chicago at 10:05 a.m. the next day.

At 11 hours 30 minutes, the Kentucky Cardinal takes about twice as long as the fastest Chicago-to-Louisville train in 1952, says Joe Vranich, author of "Derailed," a book critical of Amtrak.

Vranich, of Irvine, Calif., serves on the Amtrak Reform Council, a bipartisan body monitoring Amtrak's progress toward self-sufficiency. He and Haswell, a retired attorney in Tucson, N.M., were among Amtrak's earliest supporters but now have turned into critics.

Debbie Hare, an Amtrak spokeswoman in Chicago, said, "There's definitely an impact on our service (from express freight), and it's overwhelmingly favorable."

Hare cited the Kentucky Cardinal and the extension of two other trains from Pittsburgh to Chicago as examples of how the express freight business allows Amtrak to add service.

She conceded the Kentucky Cardinal "is not the fastest service." But she said speeding up the train to arrive at 5 a.m. would be less convenient for overnight passengers, because they wouldn't get enough sleep.

Amtrak has adjusted some schedules to accommodate express freight, but when those schedule changes inconvenience passengers, they're rescinded, Hare said. That happened recently on the Chicago-to-Los Angeles Texas Eagle, she said.

"Passenger service is our core business. That's what Amtrak is in business to provide," Hare said. Carrying express freight "is not seen as an end. It's seen as a means to an end," she added.

Still, Amtrak leaves no doubt about how important express freight is to achieving its ends.

"Clearly, developing the mail and express (freight) businesses is critical for supporting a viable national passenger rail network," the railroad says in its strategic business plan.