July 29, 1997

TO: All Concerned

FROM: J. M. Brunkenhoefer National Legislative Director

Good news and bad news. The good news is the Republicans failed in their efforts to tie the Amtrak Reauthorization Legislation to the Reconciliation package. This was a major loss for the Republicans and they are mad, That means that the Amtrak Reauthorization legislation that still has not been introduced and still does not have a number will be voted on tomorrow in the full Transportation and Infrastructure Committee.

We have reason to believe that we have overwhelming Democratic support to knock the labor provisions out of this legislation. It appears that Representative Gene Taylor of Mississippi will be the only Democratic that we might lose. We still must gain a number of Republicans. The Republican leadership from Speaker Gingrich down is essentially demanding a unity vote from the Republicans on the Committee. The pressure on all Republicans is extremely intense. It is essential, therefore, that we keep up our pressure primarily on the Republicans. If we win this vote it will be directly attributed to the amount of heat that our membership and retirees generate into these offices, and if we lose, it will be because of the efforts of the Republican leadership. The Republicans still may try to reschedule the bill or pull some other legislative trick, but just keep up the pushing.

The bad news is, retired Senator Paul Simon has contacted the UTU and stated that he definitely does not want to serve on the Railroad Retirement Board. He very much appreciated our interest, but he feels it is not the type of job he wants to devote his time to, We still very much appreciate all that Senator Simon did for us in his career.

 

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Amtrak's President Agrees That Anti-Labor Provisions in Molinari Bill Are Unnecessary

• The attached letter from Tom Downs says clearly that Amtrak does not seek the anti-labor provisions in the Molinari bill.

• Downs says all he wants is the ability to negotiate with his employees on contracting out and labor protection. Precisely that offer was made to the Republican staff of the Committee - giving Amtrak and the employees the ability to negotiate on labor protection and contracting out without removing the provisions from the law until the negotiations are completed. That offer was rejected.

• Downs states clearly that the labor protection costs Amtrak no money. He agrees that all he wants on contracting out is the ability to negotiate with his employees, which he already has.

• Neither of these issues has any impact on Amtrak's future -- as Downs letter makes clear.

• Why are these provisions in the legislation if they have nothing to do with Amtrak's future? This is the same conclusion reached by Chairman Shuster's Blue Ribbon panel.

 

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July 28, 1997

VIA FAX

Dear Labor Leaders:

I just received your letter, and I am deeply disappointed with your characterization of the position that Amtrak is currently in. I have no idea where any of you are receiving your information about Amtrak because, with one exception, none of you have ever bothered to have a single conversation about these issues with me. I have asked for a labor summit with all of you to discuss these issues. Dan Collins, the Amtrak Board member representing labor, asked for a summit so that we could discuss these issues together before we reached this situation.

I believe you are intentionally misstating Amtrak's position. I testified in front of the Senate finance Committee with Sonny Hall, and I stated in the hearing, on the record, that Amtrak does not experience significant costs in C-2 expenses, so that the impact of the repeal of C-2 would not save us any significant funds except in the ultimate bankruptcy of Amtrak. I also stated that I would prefer to be able to negotiate C-2 provisions with labor, than to have Congress mandate changes. You can find these remarks in the transcript of the hearing. I made similar remarks in two other hearings. It is a public transcript. Please avail yourself of the facts on this issue before you attempt to characterize my position.

On the issue of contracting out, I did not bring this issue to the last Congress to curry favor with Republicans. You have a short memory. Our position than and now, is that we believe absolutely in the collective bargaining process, and would prefer that the Congress simply let labor and management negotiate those items under the Rail Labor Act. It is obvious that you believe the collective bargaining process will not work for your unions and that you do not trust it. In addition, you are ignoring a vote on this issue in the House during the last Congress, that had a vote of 406 to 4 in favor of it. Almost every sitting Democratic member of the House of Representatives voted for these provisions. My understanding is that labor drafted the very language that you are now opposing. This labor-drafted language is the same language you are accusing me of attacking our employees with.

I know your job is to protect the narrow interests of your unions. My job is to insure that the 24,000 jobs here actually survive. Your challenge to the Congress of "It's either our way or the highway" is potentially destructive of the long-term survival of the company. We all know that access to the dedicated source of capital funds set up by Senator Roth will require some form of reauthorization legislation. Without some agreement on labor and liability in legislation, we will not be able to access those funds and this corporation will not survive longer than six months. For the majority of Amtrak employees, the primary concern is the loss of their jobs in a bankruptcy. Whether you accept our current financial status as legitimate or not, the truth is, if you choose to face it, that this company is near bankruptcy and must have access to the fund that Senator Roth is proposing. Whether we like the connection to a Reauthorization bill or not, it is immaterial to the fact that there will be a relationship. If we do not face these issues in the Reconciliation bill, we will face them immediately in another form with Senator McCain and Chairman Shuster.

If we had met or talked, you would have understood that this corporation is going to be $80 million in the red by October 1, and we are going to borrow the money from the banks to just meet payroll. You would understand also that we are looking at as much as $190 million worth of red ink next year and an inability to meet payroll.

I can only conclude with stating my disappointment in our relationship with rail labor, You have all heard me say that I come. from a long line of rail labor workers. I started out in this job attempting to reach out to rail labor leaders at every opportunity. To have this now turned into a vituperative personal attack an my character disappoints me beyond the telling. To assume that I am after anything in this process other than the successful defense of this corporation and the jobs here is unwarranted. l believe it will take us a long time to recover from this level of personal attack

Very truly yours,

Thomas M. Downs
Chairman, President and Chief Executive Officer

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July 28, 1997

Mr. Thomas Downs, President
Amtrak
60 Massachusetts Avenue, N.E.
Washington, DC 20002

Dear Tom:

We are writing to express our extreme disappointment with the position you and the Amtrak staff have taken on the legislation currently under consideration in the Congress, and we invite you to reconsider your position.

Our disappointment is twofold. First, we are dismayed that you privately tell us that the two issues which are critically important to Amtrak's employees and currently under debate in the pending Amtrak reform legislation are unimportant to Amtrak and its financial future, and then proceed to say the opposite to some Members of Congress and their staff. You tell us that these issues will be resolved to our mutual satisfaction, and indicate the same to some Members of Congress, only to turn around and say the opposite to others.

Your staff says frequently that while these issues are unimportant to Amtrak, you must support the repeal of these two provisions because it is the price the Committee leadership in both Houses has insisted on and you dare cross them. We must point out that you raised contracting out and labor protection last Congress in what we can only describe as a misguided and unsuccessful attempt to ingratiate yourself with the new leadership in the Congress. Fortunately, the failure of the Amtrak legislation in the last Congress has provided adequate time for analysis to reveal that these issues are virtually irrelevant to Amtrak's future.

Second, we are dismayed that you have taken a position with respect to your employees that we can only describe as appalling. You are fighting to remove a provision from the law which prohibits Amtrak from doing one thing -- taking federal funds, firing the employees currently performing work, and contracting out the work. As you know, other than this provision in the law, there is nothing that prohibits Amtrak from contracting out work. In addition, you are trying to deprive long-time Amtrak employees of the right to a fair severance in the unfortunate event that they lose their jobs. Even the Blue Ribbon panel appointed by Chairman Shuster reached the conclusion that these two issues were "red herrings," which had nothing to do with Amtrak's problems or its financial future.

The Administration has made it clear that they do not support your position; Congressmen Oberstar and Wise have introduced legislation which disagrees with your position; the Senate Committee Democrats, led by Senator Hollings and Kerry disagree with your position; and the Amtrak employees disagree with your position. Every objective analysis demonstrates that these two issues have no bearing on Amtrak's future.

We can only conclude that you have embarked on a political strategy which includes an anti-labor stance so at odds with the values of the Administration that appointed you that some in the Congress will reward you. However, your misguided strategy has failed in every respect, The battle for adequate funding for Amtrak continues unresolved. Amtrak's performance and financial condition deteriorates monthly. And your relations with your employees have reached an all-time low.

We invite you to reconsider, act on your private statements to your employees and others, and support the Oberstar-Wise legislation. This bill is fair, and it can pass without the controversy that has mired the legislation in the past.

Sincerely,

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