UTU News Digest - Wednesday, September 23, 1998

UTU Daily News Digest

Information of interest to operating railroad and transportation employees
For
Wednesday, September 23, 1998

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Rally in Lorain seeks to save Lake Terminal RR at USS/Kobe Steel; save 170 jobs

LORAIN, Ohio -- The United Transportation Union is sponsoring a public rally at 2 p.m. today at the Lorain City Hall to save the 104-year-old legendary Lake Terminal Railroad at the USS/Kobe Steel mill in Lorain – and 170 union jobs.

"We are asking USS/Kobe Steel to renew its operating agreement with the historic Lake Terminal Railroad," said Tim Smith, UTU general chairman on the Lake Terminal. "We are asking USS/Kobe not to compromise safety. We are asking USS/Kobe Steel to consider the families and the children. Finally, we are asking USS/Kobe Steel – and its corporate parents -- to do the right thing."

USS/Kobe Steel has announced it will not renew its operating agreement with the 104-year-old Lake Terminal Railroad effective December 28 to try to reduce operating costs. However, the Lake Terminal RR accounts for only 5% of USS/Kobe’s operating budget.

In a meeting Tuesday afternoon, USS/Kobe President George Babcoke said he is continuing with his plans to do away with the Lake Terminal and its union workers.

The Lake Terminal RR, founded by Tom Johnson in 1894, has serviced the steel plant since its founding. It is also the oldest business in Lorain County still operating under its original name. Since 1895, the Lake Terminal RR has performed intra-plant switching of hot metal and other steel products within the USS/Kobe Steel mill, maintained the rail line, and provided maintenance services to USS/Kobe’s freight car and locomotive fleet. After December 28, only some limited service will be provided.

USS/Kobe Steel is owned by Pittsburgh’s USX Corp. and Japan’s Kobe Steel Co. Ironically, it is the only one of five USX-owned mills nationwide that has announced it does not intend to renew its operating contract with its long-time railroad partner. Instead, USS/Kobe plans to hire a small group of poorly trained, non-union workers to run its high-risk, steel-hauling rail operation.

"This could create a dangerous operating situation that could lead to serious injury or death," said Smith. "So far, there have been no fatalities in the entire 104-year history of the Lake Terminal Railroad."

Ten years ago USX sold its "in-house Railroads," including the Lake Terminal Railroad in Lorain and the Union Railroad in Pittsburgh, to Transtar Holdings LP, of which USX owns 45%. If USS/Kobe discontinues its working relationship with the Lake Terminal Railroad, it will cause USX to lose its share of $7.7 million in annual revenue and $1 million in income before taxes from Transtar.

The Lake Terminal RR has informed USS/Kobe that it will remove its equipment and trackage, which could seriously disrupt operations, if it no longer has a contract. That action will mean the end of the Lake Terminal RR as we know it and will result in the loss of at least 170 union jobs. Those include 88 UTU jobs, 55 United Steelworkers and the rest are jobs belonging to the Transportation and Communications Union members.

STB decides not to modify UP’s bi-weekly service reports

WASHINGTON -- Surface Transportation Board (Board) Chairman Linda J. Morgan announced this week that the Board has decided not to modify its order requiring Union Pacific Railroad Company (UP) to file certain information designed to assist the Board in monitoring rail service in the western United States.

The Board found that the information already being provided is substantial and sufficient for the Board to monitor UP service levels.

Over the past 9 months, the Board has maintained an emergency service order directing certain changes in the way in which service is provided in the Houston area. In an order issued on July 31, 1998, the Board found that, while service throughout the West is not at uniformly improved levels, the service emergency in Houston is over. Thus, subject to a 45-day wind-down period, the Board permitted the emergency service order to expire.

The Board did, however, recognize the need to continue monitoring UP’s service, and it therefore continued, with some modifications intended to ensure that the data filings are indeed useful and not unduly burdensome or duplicative, its requirement that the carrier file extensive operational data to facilitate the monitoring.

The National Industrial Transportation League (NITL) asked the Board to expand the UP reporting requirements. NITL raised three arguments in support of its request. First, contending that the applicants in the recently approved Conrail transaction have agreed to publicize substantial amounts of performance information, it expressed concern that some of the information required of UP is not being made available to the general public. Second, NITL noted that the information being required focuses principally on systemwide rather than corridor-specific data, and it asked that corridor-specific performance information be filed and made available to the public. Finally, NITL suggested that, by reducing rather than expanding the required reporting, the Board might not have enough information to monitor the situation adequately.

The Board disagreed with these arguments. Noting that route-specific performance information would not tell a shipper anything about its service that the shipper would not already know, the Board pointed out that all of the data being filed by UP other than those involving commercially sensitive information are being made public; that commercially sensitive data have not been public since the beginning of the "Service in the West" proceeding; that the Board did not require release of commercially sensitive information in its decision in the Conrail proceeding; and that even the agreement that the applicant railroads have reached in the Conrail proceeding does not appear to provide for the release of the type of data that NITL seeks of UP here.

The Board found UP’s reporting adequate for monitoring purposes, and stated that, if anything, rather than expand UP’s reporting, it might be more valuable to obtain comparable reports from other western railroads. However, the Board noted, as service improves, the appropriate government response in a service oversight proceeding such as this one ought to be less rather than more intervention

NS, CSX make headway on some labor agreements

WASHINGTON – In the wake of the Conrail carve-up, Norfolk Southern Corp., CSX Corp. and rail union negotiators are making progress toward signing revised labor agreements needed to allow the two companies to divide up their purchase.

However, those labor agreements are surrounded by uncertainty because the Surface Transportation Board decision that approved the NS-CSX purchase did not spell out exactly what agreements must be completed before the division actually takes place.

The issue arises from a condition in the agency's merger approval decision that adopted a private commercial agreement among NS, CSX and the National Industrial Transportation League, a rail shipper group.

CSX has completed labor pacts, technically called implementing agreements because they implement merger-related changes, with eight unions. Those unions represent boilermakers and blacksmiths, railway supervisors, electrical workers, police officers, train dispatchers and bridge inspectors. NS has a similar pattern of completed agreements with smaller unions.

Negotiations between carriers and more than a dozen unions have been proceeding behind closed doors since before the STB's July 23 decision. Talks with several unions are continuing this week.

No final agreements have been reached with four of the largest rail unions: the United Transportation Union, Transportation Communications Union, Brotherhood of Locomotive Engineers and the Brotherhood of Maintenance of Way Employes.

R.M. Godwin, BLE's general chairman on Conrail, said his union has initialed agreements for all three operating areas that NS will create after the Conrail split. He said similar initialed agreements have been done for the shared-asset areas both railroads will operate and for one of three districts on CSX. He said he believed initial agreements could be reached on the remaining two CSX districts within a week.

Joel Parker, vice president of the Transportation Communications Union, would not discuss the status of the talks, citing a news blackout that also was mentioned by carrier officials. "There are intense negotiations going on, and the hope is to get a negotiated agreement," he said.

Jed Dodd, a general chairman for the Brotherhood of Maintenance of Way Employes, also was tight-lipped. Asked how negotiations were going, Dodd said, "Slowly."

STB announces ruling on Stampede Pass

WASHINGTON -- Surface Transportation Board Chairman Linda J. Morgan announced this week that the United States Court of Appeals for the Ninth Circuit has issued a decision affirming in all respects the Board’s handling of preemption and environmental issues associated with the reopening of the Burlington Northern and Santa Fe Railway’s Stampede Pass line in the State of Washington.

Stampede Pass was one of three main lines serving the Seattle-Tacoma area that were historically owned and operated by BN. In the mid-1980s, as BN and other large railroads rationalized their systems by eliminating track that was deemed to constitute excess capacity, a portion of the Stampede Pass line was sold to the Washington Central Railroad (WC). By the mid-1990s, however, the railroad industry in general, and BN in particular, had begun to expand their infrastructure to meet growing shipper demands. As part of that expansion, BN sought Board approval to reacquire the portion of the Stampede Pass line that had been sold to WC.

To facilitate service over its reacquired track, BN proposed various repairs and improvements, some of which raised environmental issues. Certain municipal interests argued that these environmental issues had to be addressed through the local permitting process, while BN argued that local environmental review was preempted by federal regulation. Finding that federal law preempts state and local permitting requirements, the Board approved BN’s proposal, concluding that, with certain mitigation measures, BN’s projects would not have a significant environmental impact. The municipal interests sought judicial review.

In its decision, the court found that the ICC Termination Act of 1995 broadly preempts state and local permitting laws regarding railroad operations. Insofar as this case is concerned, the court upheld in all respects the environmental review process that the Board undertook, holding that the environmental assessment (EA) prepared by the agency to meet its obligations under the National Environmental Policy Act reflected a thorough, independent investigation of the environmental consequences of the reacquisition and reactivation of the Stampede Pass line. In particular, the court determined, the affected cities were given ample opportunity to raise environmental concerns; the specific environmental mitigation conditions developed by the Board were adequate; and the parameters of the EA were appropriate.

STB approves agreement for smaller railroads

WASHINGTON -- Surface Transportation Board (Board) Chairman Linda J. Morgan announced this week today that the Board has approved portions of an agreement between large and small railroads designed to enhance the role of smaller railroads and promote their ability to meet the needs of the shipping public.

In its decision in Review of Rail Access and Competition Issues, STB Ex Parte No. 575 (issued by the Board on April 17, 1998), which was issued after the Board conducted two days of informational hearings to examine issues of rail access and competition in today’s railroad industry, the Board discussed impediments to the ability of smaller railroads to reach their full potential in providing service to the shipping public. Noting its preference for private-sector over government-mandated solutions, the Board urged the railroads to address and resolve these issues expeditiously.

The railroads responded to the Board’s request, and over a period of several months, the Association of American Railroads (AAR) and the American Short Line and Regional Railroad Association (ASLRRA) and their members worked cooperatively to reach agreement on these difficult and important issues. On September 10, 1998, an agreement was announced that addressed issues of car supply, service, paper barriers, switching, heavy axle loads, and certain rate policies, establishing arbitration as a means of dispute resolution.

Some of the provisions of the agreement concern (1) switching fees charged by large railroads to small railroads and (2) the way in which rates are charged, and revenues divided between large and small railroads, for certain types of services. Although these provisions do not result in collective ratemaking (a process under which competitors meet to discuss rates for particular services), they do relate to rates. The law gives the Board authority to approve rate-related agreements that further the rail transportation policy (RTP) and Board approval immunizes activities conducted under such agreements from the antitrust laws. On September 11, 1998, AAR and ASLRRA asked the Board to approve the rate-related aspects of the agreement.

In its decision, the Board found that application of the rate-related portions of the agreement will assist smaller railroads in reaching their potential and playing a more significant role in providing reasonably priced high-quality and efficient service to the shipping public, thereby enhancing the overall strength, efficiency, and responsiveness of the nation’s rail network. By encouraging a more rational, efficient and cooperative relationship between Class I carriers and smaller railroads, the Board found, the rate-related provisions of the agreement will promote the RTP and ensure the development of a safe and efficient rail transportation system.

Railroad execs meet to fix Europe problems

LONDON -- More than 130 senior executives of European railroads will meet in Brussels today for the first attempt of its kind to work out the technical and management problems of Europe's rail network.

The meeting, called the "rail infrastructure management conference," is organized by Railtrack, the British infrastructure owner, and Eurotunnel PLC, which manages the Channel Tunnel.

The aim of the conference is to stimulate rail traffic across Europe. Among other problems, the system suffers from lack of uniformity in electrical and signaling systems, and from national laws requiring changes of locomotives and crews at each border crossing.

Romanian railroad divided into 5 firms

BUCHAREST -- SNCFR, the Romanian railroad company, has been divided into five separate joint stock companies. The new entities will become operational on Oct. 1, the Transport Ministry announced. They are responsible for passenger transport, freight transport, infrastructure, excess assets management and financial management.

Transport Minister Traian Basescu said one of the effects of the spinoff will be a decrease in freight transportation prices; he said the government is considering an 18% reduction in grain transport within Romania. The company also is cutting more than 16,186 employees.