The facts surrounding the UTU proposed National Agreement

November 1, 2000

Chairpersons,
General Committees of Adjustment
Railroads in United States

Re: Proposed National Agreement

Dear Brothers and Sisters:

The proposed National Agreement is now being widely circulated. Given this widespread circulation, we have received reports of many concerns about the Agreement, most of which are based on false rumors or lack of understanding. I should also point out that many of those rumors are being initiated by those who are not UTU members, and would like nothing better than to see this proposal fail for the betterment of their own organizational or personal political agenda. The enclosed information will address the concerns and misunderstandings received in this office from the membership.

The greatest misunderstanding appears to be over the Pay System Simplification provisions. The rumors are that UTU has "sold" arbitraries and penalty payments for a "flat" rate of pay in through-freight service. These rumors are based upon absolutely no facts whatsoever, and are just dead wrong. The fact is that Trip Rates covering specific runs/pools will include as part of that rate, all such payments. And all such Trip Rates will be computed at "pre-85" conditions, so that parity is achieved for all UTU members regardless of their seniority date. This will bring post-85 employees up to pre-85 employee levels and eliminate the dual basis of pay.

The issue of overtime in road service is another huge area of concern, and one where rumors are rampant. The rumor is that the Trip Rate represents a flat rate for all service rendered, regardless of the number of hours on duty and regardless of the work required by the Carrier. Again, that rumor is dead wrong. The fact is that overtime is not to be included in the Trip Rates. Overtime will continue to apply in the same manner it always has been applied. Further, if overtime is currently paid differently to "pre-85" employees than it is to "post-85" employees, upon implementation of Trip Rates, all employees will be paid for overtime on the same basis as it is paid to "pre-85" employees currently!

In conclusion, the proposed National Agreement contains NO WORK RULE GIVEBACKS.

I ask that you read the attached information regarding the proposed agreement so that you can see that this proposal provides for a significant economic package that benefits all of our members without any trade-offs or givebacks.

Fraternally yours,

Charles L. Little
International President

THE PROPOSED UTU NATIONAL AGREEMENT

BRINGS POST 85 EMPLOYEES TO PRE 85 EMPLOYEES CURRENT PAY LEVELS.

POST 85 EMPLOYEES - APPROXIMATELY 27% INCREASE WITH IMPLEMENTATION OF TRIP RATES

PRE 85 EMPLOYEES - APPROXIMATELY 14% INCREASE, INCLUDING THE $1,200 LONGEVITY BONUS

TRIP RATES PRESERVE LOCAL CONDITIONS AND. ELIMINATE POSSIBILITY OF INCREASES IN BASIC DAY MILES.

PRESERVES DUPLICATE TIME EARNINGS THROUGH TRIP RATES FOR ALL EMPLOYEES.

ELIMINATES REDUCED DEADHEAD RATES FOR ALL EMPLOYEES THROUGH ESTABLISHMENT OF TRIP RATES.

OVERTIME IS PRESERVED AND PAID OVER AND ABOVE TRIP RATES.

ASSURES UTU A VOICE IN TECHNOLOGICAL ISSUES.

NO GIVE BACKS.

CONTINUES THE WAGE AND RULE PANEL.

YARDMASTERS OBTAIN COMPENSATION FOR TRANSFER TIME, RECEIVE VACATION COMPENSATION THE SAME AS OPERATING EMPLOYEES, AND GAIN ENHANCED SICK PAY.

THE FACTS SURROUNDING THE UTU PROPOSED NATIONAL AGREEMENT

BACKGROUND

THE VAN WART STUDY COMMISSION ON RAIL LABOR AGREEMENTS

THE VAN WART STUDY COMMISSION ESTABLISHED BY PEB-195 WAS CHARGED WITH THE RESPONSIBILITY TO STUDY AND MAKE RECOMMENDATIONS ON FIVE ISSUES:

BASIS OF PAY AND RELATED ALTERNATIVES.

INITIAL AND FINAL TERMINAL DELAY, AIR HOSE COUPLING AND ENGINE EXCHANGE ARBITRARIES.

ROAD/YARD RESTRICTIONS.

SUPPLEMENTAL SICK PAY - DISABILITY PAY - PERSONAL LEAVE.

PRINCIPLES AND PROCEDURES FOR STABILIZING THE PAY STRUCTURE OF THE OPERATING CRAFTS.

THE VAN WART STUDY COMMISSION RECOMMENDED:

ENTRY RATES STARTING AT 70% OF THE THEN CURRENT RATE - INCREASING 6% PER YEAR FOR 5 YEARS - THUS NEVER GETTING OVER 80% OF THE JULY 30, 1985 RATE.

TOTAL ELIMINATION OF ALL ARBITRARIES AND ALLOWANCES.

INCREASING BASIC DAY TO 160 MILES.

ELIMINATION OF ALL MILEAGE LIMITATIONS OR EARNINGS LIMITATIONS.

GETTING OR LEAVING TRAINS ON ANY NUMBER OF TRACKS AT THE HOME OR AWAY-FROM-HOME TERMINALS REGARD-LESS OF THE NUMBER OF CARS IN TRAIN OR TRACK CAPACITY.

TO EFFECT SAVINGS, ALLOW CARRIERS TO ESTABLISH AND CONTROL EXTRA BOARDS AT ANY LOCATION AND USE EXTRA CREWS

AT ANY TIME THEY DESIRE, INSTEAD OF POOL OR ASSIGNED CREWS.

AT ANY TIME, USE STRAIGHT TIME EMPLOYEE AHEAD OF EMPLOYEE WHO WOULD QUALIFY FOR TIME AND ONE-HALF RATE OF PAY.

WITHOUT REGARD TO EXISTING RULES, ALLOW CARRIER TO MAKE ANY OPERATIONAL CHANGES IT DEEMS NECESSARY TO OBTAIN NEW BUSINESS OR PROTECT ENDANGERED BUSINESS.

ENGINEERS NOT TO RECEIVE ADDED COMPENSATION DUE TO THE LOSS OF THE FIREMAN OR THE BRAKEMAN.

NO SUPPLEMENTAL SICK PAY.

LONG-TERM DISABILITY FOR CAREER EMPLOYEES WITH OVER TEN YEARS OF SERVICE ONLY.

PERSONAL LEAVE BE NEGOTIATED IN FUTURE BARGAINING EFFORTS.

THE VAN WART STUDY COMMISSION RECOMMENDATIONS WOULD FORM THE BASIS FOR FUTURE BARGAINING EFFORTS BETWEEN RAIL LABOR AND MANAGEMENT.

TO THIS VERY DAY, THESE VAN WART RECOMMENDATIONS CONTINUE TO FORM THE BASIS FOR ONGOING WAGE-RULE NEGOTIATIONS WITH THE RAILROADS.

THE VAN WART STUDY COMMISSION RECOMMENDATIONS WERE ISSUED DECEMBER 8, 1983. WHILE THESE RECOMMENDATIONS HAVE NEVER BEEN FULLY IMPLEMENTED, IN EACH SUBSEQUENT BARGAINING ROUND THE CARRIERS HAVE OBTAINED MORE AND MORE GIVE BACKS AS A DIRECT RESULT OF VAN WART'S RECOMMENDATIONS.

ENTRY RATES;

LOST ARBITRARIES;

OTHER ARBITRARIES WERE FROZEN FOR PRE 85 EMPLOYEES;

ARBITRARIES ELIMINATED ENTIRELY FOR POST 85 EMPLOYEES;

INCREASES IN THE THROUGH FREIGHT BASIC DAY TO ITS CURRENT LEVEL OF 130 MILES;

RELAXATION OF THE WORK RULES AND THE LINE OF DEMARCATION BETWEEN ROAD AND YARD;

THE RAILROADS STILL CONSIDER THE VAN WART STUDY COMMISSION RECOMMENDATIONS TO BE ALIVE AND WELL, AND CONTINUE TO SUCCESSFULLY CONVINCE THIRD PARTIES OF THE NEED FOR EMPLOYEE GIVE BACKS.

IN 1960 PRESIDENT EISENHOWER APPOINTED A PRESIDENTIAL RAILROAD COMMISSION TO STUDY CREW SIZE. THAT COMMISSION RECOMMENDED THE ELIMINATION OF FIREMEN AND THE REDUCTION OF THE SIZE OF TRAIN CREWS. IT TOOK TWENTY-FIVE YEARS TO FULLY IMPLEMENT THE RECOMMENDATIONS OF THAT COMMISSION: HOWEVER, THEY WERE FINALLY IMPLEMENTED WITH RAIL LABOR FIGHTING THE ENTIRE TWENTY-FIVE YEARS TO PRESERVE YOUR JOBS.

RAILROADS HAVE BEEN ABLE TO CONVINCE THIRD PARTIES, SUCH AS THE PRESIDENTIAL EMERGENCY BOARDS AND THE VAN WART STUDY COMMISSION, THAT THE RAILROAD INDUSTRY SPENDS SIGNIFICANTLY MORE MONEY TO GENERATE A MUCH SMALLER RETURN ON THEIR INVESTMENT, THAN ANY OTHER TRANSPORTATION ENTITY.

CORRESPONDINGLY, FOR THE PAST FIFTEEN YEARS, THIRD PARTIES WHO HAVE EVALUATED THE RAILROAD INDUSTRY HAVE FOUND RAILROAD OPERATING EMPLOYEES TO BE AMONG THE VERY HIGHEST COMPENSATED WORKERS IN THE U.S.

WHEN THE ABOVE FACTS (LOW RETURN ON CAPITAL - HIGH LABOR COSTS) ARE REVIEWED TOGETHER WITH THE UNACHIEVED AND REMAINING VAN WART RECOMMENDATIONS, THIRD PARTIES ARE LIKELY TO REWARD RAILROADS WITH THE ADDED GIVE BACKS THEY CONTINUE TO SEEK.

FACTS SURROUNDING THE PROPOSED AGREEMENT:

* THE VAN WART STUDY COMMISSION RECOMMENDED A 160-MILE BASIC DAY. DURING THE PAST FIFTEEN YEARS THE BASIC DAY HAS SUSTAINED INCREMENTAL INCREASES FROM 100 MILES TO ITS CURRENT 130 MILES.

* THE ESTABLISHMENT OF TRIP RATES ELIMINATES THE POSSIBILITY OF ANY FURTHER REDUCTIONS IN EARNINGS (AS MUCH AS 20%) FROM FURTHER INCREASES IN THE BASIC DAY MILES.

* THE VAN WART STUDY COMMISSION RECOMMENDED THE TOTAL ELIMINATION OF DUPLICATE TIME PAYMENTS AND ALLOWANCES.

* CURRENT EARNINGS ATTRIBUTABLE TO DUPLICATE TIME PAYMENTS (ITD, FTD, ITS, FTS, TERMINAL RUN-AROUNDS, "STEP UP" RULES) ARE PRESERVED FOR PRE-85 EMPLOYEES WHEN INCORPORATED INTO THE NEW TRIP RATE SYSTEM AND BECOME PAYABLE TO ALL POST 85 EMPLOYEES.

* THE VAN WART COMMISSION CREATED COMPENSATION DIFFERENCES BETWEEN WORKING TRIPS AND DEADHEAD TRIPS.

* ONCE TRIP RATES ARE IMPLEMENTED, BOTH PRE AND POST 85 EMPLOYEES WILL BE PAID THE SAME FOR DEADHEAD TRIPS AND WORKING TRIPS, RESULTING IN A SUBSTANTIAL PAY INCREASE.

* THE VAN WART STUDY COMMISSION CREATED THE TWO-TIER PAY SYSTEM WITH SIGNIFICANT REDUCTIONS IN EARNINGS OF POST 85 EMPLOYEES THROUGH THE APPLICATION OF TWO DIFFERENT METHODS OF COMPENSATION.

* THE PROPOSED ESTABLISHMENT OF A SINGLE TRIP RATE FOR A RUN/POOL INCORPORATES DEADHEAD AND DUPLICATE TIME PAYMENTS AND MAKES THEM APPLICABLE TO BOTH PRE AND POST 85 EMPLOYEES.

* DEADHEADING WILL BE PAID AT THE ESTABLISHED TRIP RATE FOR ALL PRE AND POST 85 EMPLOYEES.

* CURRENT OVERTIME RULES AND CALCULATIONS ARE NOT INCLUDED IN TRIP RATES. OVERTIME WILL BE PAID IN ADDITION TO TRIP RATES.

* WHERE OVERTIME IS CURRENTLY PAID DIFFERENTLY FOR POST 85 EMPLOYEES, ONCE TRIP RATES ARE IMPLEMENTED, BUT NO LATER THAN JULY 2, 2003, THEIR OVERTIME WILL BE PAID AS IT IS FOR PRE 85 EMPLOYEES.

* IT IS A LONG AND COMPLICATED PROCESS TO IDENTIFY AND QUANTIFY THE NUMEROUS SPECIAL CONDITIONS AND PAYMENTS ON EVERY RAILROAD AND EACH POOL/RUN.

ALL CONTAIN UNIQUE COMPONENTS. THE TRIP RATE CONCEPT RECOGNIZES THAT ONE SIZE CANNOT FIT ALL. ACCORDINGLY, THE PRINCIPLES AND GUIDELINES ESTABLISHED FOR CALCULATING TRIP RATES, WHICH CONSIDER THESE VARIOUS SPECIAL REGIONAL AND LOCAL CONDITIONS, WHEN ADDED TOGETHER WITH THE IDENTIFIED MILES, DUPLICATE TIME PAYMENTS AND ARBITRARIES, WILL BE IMPLEMENTED IN THE TRIP RATES BY THE GENERAL COMMITTEE, ON A RUN BY RUN / POOL BY POOL BASIS.

CONSEQUENTLY, THE MANDATORY IMPLEMENTATION DATE OF JULY 1, 2003, IS DESIGNED TO GIVE THE PARTIES SUFFICIENT TIME TO ADEQUATELY COMPLETE THE TRIP RATE PROCESS.

THE TECHNOLOGY SIDE LETTER ASSURES THE UTU A PLACE AT THE TABLE DURING THE DEVELOPMENT AND IMPLEMENTATION OF INEVITABLE TECHNOLOGICAL ADVANCES.

IN THE PAST LABOR HAS BEEN PLACED IN THE POSITION OF ATTEMPTING TO PRESERVE THE JOBS OF OUR MEMBERS AFTER IMPLEMENTATION OF THE TECHNOLOGICALLY ADVANCED EQUIPMENT.

THIS IS EVIDENCED BY THE CONVERSION FROM STEAM TO DIESEL LOCOMOTIVES; THE UTILIZATION OF RADIO EQUIPMENT, WAYSIDE DETECTORS, AND END OF TRAIN DEVICES.

THE DIESEL ENGINE AND TECHNOLOGICALLY ADVANCED DEVICES MENTIONED ABOVE ALLOWED THE CARRIER TO PUSH FOR THE ELIMINATION OF FIREMEN AND BRAKEMEN ON MANY TRAINS.

THE TECHNOLOGY OF TODAY AND THE FUTURE MUST BE ACKNOWLEDGED AND ADDRESSED BEFORE THE RAIL CARRIERS CONTROL THE PROCESS WITHOUT LABOR HAVING A VOICE.

THE PROPOSED AGREEMENT CONTAINS NO LOSSES IN WORK RULES (NO GIVE BACKS).

GENERAL WAGE INCREASES ACROSS THE BOARD FOR ALL EMPLOYEES. POST 85 EMPLOYEES REALIZE PARITY, WHICH AMOUNTS TO A MINIMUM 27% INCREASE IN PAY WITH NO GIVE BACKS: PRE 85 EMPLOYEES RECEIVE AROUND 12% INCREASE IN WAGES, WITHOUT GIVE BACKS, AND A $1200.00 LONGEVITY BONUS REPRESENTING

AN ADDITIONAL 2% INCREASE, MAKING THEIR INCREASE NEARLY 14%.

CONTINUATION OF THE WAGE RULE PANEL IS IN THE BEST INTEREST OF OUR MEMBERS.

LABOR FOUGHT THE FIREMAN ISSUE UNTIL THE LAST MAN WAS STANDING - AND LOST.

LABOR NEGOTIATED OTHER REDUCTIONS OF CREW SIZE (I.E. CREW CONSIST AGREEMENTS) AND FARED FAR BETTER.

TO RETURN TO THE DAYS OF JUST SAYING NO AND ENDING UP IN FRONT OF THIRD PARTIES FORCED UPON US BY FEDERAL LAW, WHERE WE FIGHT UNTIL THE LAST MAN IS STANDING, DOES NOT SERVE OUR MEMBERS.

LABOR MUST CONTINUE TO FIND WAYS TO PRESERVE JOBS AND WORK RULES.

IN ORDER TO ACCOMPLISH THAT TASK WE MUST HAVE A SEAT AT THE NEGOTIATING TABLE AND AVOID THIRD PARTY INTERVENTION.

FORTY YEARS OF HISTORY (E.G., PRESIDENTIAL RAILROAD COMMISSION, PEB 195, VAN WART STUDY COMMISSION, PEB 208, PEB 219, PUBLIC LAW 102-29) CLEARLY ESTABLISH THAT WE LOSE WITH THIRD PARTIES.

UNDER FEDERAL LAW, FAILURE TO RATIFY THE PROPOSED AGREEMENT INEVITABLY LEADS TO THIRD PARTY INTERVENTION.