UTU says Court of Appeals made right decision to uphold 
STB moratorium on rail mergers

WASHINGTON (July 17) – The International President of North America’s largest rail and transportation union today applauded the decision announced Friday by the U.S. Court of Appeals saying that federal regulators were justified in imposing a 15-month moratorium on rail mergers last March.

Charles L. Little, International President of the United Transportation Union (UTU), said here today during the latest round of National Contract negotiations, "This wise decision by the Court of Appeals permitting the STB time to study and propose new rail merger guidelines is major win for North American railroad workers, shippers, and the American and Canadian people. This will allow the railroad industry, working cooperatively with its union employees, the time to focus on solving merger-related service issues."

The court’s decision represented a setback for the Canadian National Railway (CN) and the Burlington Northern Santa Fe (BNSF), whose merger proposal was put on hold by the Surface Transportation Board's (STB) moratorium. CN and BNSF had announced their proposed combination through a new company, North American Railways, Inc., on Dec. 20, 1999.

UTU was the first and only major transportation union that actively supported the STB’s merger moratorium and strongly opposed the merger of the Canadian National and Burlington Northern Santa Fe Railroads. Two rail unions, the Brotherhood of Locomotive Engineers (BLE) and Brotherhood of Maintenance of Way Employees (BMWE) supported the CN-BNSF merger, which would have included some layoffs.

The STB had told the Appeals Court that the railroad industry was at a critical "crossroad," and the moratorium was necessary to evaluate outdated merger standards. It also said allowing the merger to go through would likely instigate an additional rash of mergers, causing further rail congestion and headaches for consumers.

"The UTU position, as reinforced by the Appeals Court, was the right decision from the start," said Little. "Now we will have time to get the rail industry’s house in order before what many say will be another major round of mergers after the STB issues its new guidelines."

Little added, "Those new merger rules should include the end of ‘cramdown’ in all future rail mergers patterned after the UTU’s historic deal with the National Carriers Conference Committee. We also now have the opportunity to sign a forward-thinking labor contract with the Class 1 railroads that could usher in a period of labor stability and economic growth in the industry."

The 1996 merger of the Union Pacific and the Southern Pacific led to serious bottlenecks across the merged company's system in 1997. In addition, the purchase and division last year of Conrail by Norfolk Southern (NS) and CSX in the East saw widespread delays despite extensive planning to avoid a repeat of UP's experience.

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