UTU News Digest - Wednesday, August 18, 1999

UTU Daily News Digest

Information of interest to operating railroad and transportation employees

Wednesday, August 18, 1999

ILLINOIS: Kansas City Southern says spin-off going as planned

CHICAGO -- Kansas City Southern Industries Inc. said Tuesday the planned spin-off of its asset management company from its railroad was on track, despite speculation the spin-off was in trouble.

The financial unit, which is to be renamed Stilwell Financial, includes mutual funds Janus Capital Corp., Berger Associates Inc., Nelson Money Managers PLC and a 32 percent ownership of DST Systems Inc.

"Kansas City Southern had a major analyst meeting two weeks ago and also issued an earnings release where they were very clear that their board recently reviewed a proposal by Janus and reaffirmed that the company is going to proceed with the spin-off as planned,'' Robert Siegfried, Kansas City Southern spokesman, told Reuters.

At the time of its earnings release, Kansas City Southern said its board of directors was not persuaded that there were sufficient reasons for changing the direction of the spin-off as proposed by Janus.

Kansas City Southern is slated to spin off its asset management unit in the fourth quarter.

Earlier on Tuesday, CIBC World Markets analyst Steven Eisman downgraded his rating on Kansas City Southern to hold from strong buy, citing an expected fight for control of the company.

"We have learned that Janus management does not want to be managed by Stilwell, fearing the Stilwell holding company could dilute shareholder value through expensive acquisitions,'' Eisman wrote in a research note. "Janus wants to be spun out separately.''

Janus is ready to take severe steps to prevent the spin-off in its present form, including issuing enough phantom stock to its employees that the company's margins would be "crushed,'' the analyst said.

Shares of Kansas City Southern fell after the release of the research note and closed off 4-13/16, or nine percent at 48-3/16.

CANADA: Manitoba natives may block rail lines

WINNEPEG -- Manitoba native leaders are meeting today to decide whether or not to protest a police raid on a reserve's casino by blocking railways in the province.

The threat follows a move by Canadian Mounties yesterday that saw them seize 25 slot machines from an unlicensed casino.

Ian La Couvee, spokesman for Canadian Pacific Railway said that there is currently no sign of natives blocking lines. He added that CP Rail has increased its track patrols and does have a contingency plan in place should lines be blockaded. La Couvee would not go into any further details.

No one from Canadian National Railway was immediately available for comment, but company spokeswoman Christine Skjerven told the Winnipeg Free Press that CN Rail is taking a "wait-and-see" approach to the threat.

La Couvee noted that a blockade could potentially affect all of the railway’s shipments, depending on whether or not the natives were to block its mainline.

RCMP spokesman Sgt. Steve Saunders said the Mounties also have a contingency plan in place to deal with any potential disturbances, but he would not provide any details.

"We'll deal with the situation as it arises," he said. "The blockading of railway lines is in essence holding every Manitoban for ransom, and the RCMP will act accordingly."

Saunders added the rail lines must be kept clear, as they are a vital transportation link.

MICHIGAN: UAW Ford workers vote on strike authorization

DETROIT -- United AutoWorkers members at Ford Motor Co. cast ballots nationwide Tuesday over whether to authorize their bargainers to call a strike should they be unable to reach agreement on a new national contract.

Such votes are routine every three years before negotiations intensify in September. The current contracts expire Sept. 14. Members usually vote overwhelmingly to grant their representatives the right to call a strike. Results of the vote were to be released Wednesday, UAW spokesman Paul Krell said.

About 101,000 union members at 43 locals across the country are eligible to vote.

Most of the voting was being conducted on Tuesday alone, which is unusual. Typically, the locals vote at their convenience over a longer period. UAW members at General Motors Corp. and DaimlerChrysler are voting in that manner this week.

That has led to speculation that the UAW is trying to send a message to the No. 2 automaker over the possible spin-off of its Visteon Automotive Systems Corp. parts unit. The union opposes a spin-off of Visteon, which has about 28,500 UAW members.

The strike votes come as the union continues separate negotiations that began in June with the three automakers. Talks are expected to intensify around Labor Day.

WASHINGTON STATE: Seattle truckers' union drive slows port traffic

SEATTLE -- Truckers seeking to establish a union and boost their wages and benefits Tuesday slowed container shipping operations at the Port of Seattle, a major U.S. freight hub.

Claiming the 35 local trucking companies pay them so little they have to choose between maintaining their trucks and buying health care insurance for their families, some 100 of the nearly 1,000 owner-operators serving Seattle and Tacoma halted work and set up a picket line to urge their colleagues to unionize.

"So far we've had over two dozen drivers go ahead and shut off their trucks to help spread the word,'' said Rob Hickey, organizing director of Teamsters local 174, which has been working with the truckers for over two years.

The local longshore clerks union briefly honored the picket line, shutting down one Seattle pier for nearly an hour Tuesday morning, said port spokesman Imbert Matthee.

The truckers currently get paid for each container they move to and from massive freighters docking in the two ports.

They currently take home about one third of their annual gross pay of about $75,000, which union leaders say is inadequate for drivers frequently working 60 to 70 hours a week.

Union recognition would give the truckers power to seek compensation reflecting the time they spend in long lines awaiting their turn to approach the ships, Hickey said.

A similar action by unionized truckers seeking hourly pay of Canadian $50 (US$35) recently shut down Vancouver's port. That city's shipping companies Monday agreed to submit the dispute to an arbitrator.

Union organizers planned a rally in Seattle at 1200 PT/1500 ET and said they would take the campaign to the Port of Tacoma Wednesday.

Seattle and Tacoma together comprise the No.2 U.S. port for containerized cargo volumes, ranking behind only Los Angeles-Long Beach, Calif.

Some 2 million containers ship through Seattle and Tacoma each year ferrying grain, lumber and apple exports, as well as importing autos and electronics. Major destinations and origination points include Japan, South Korea, Hong Kong and Alaska.

WASHINGTON: Syracuse Overnite workers file Teamster petition

WASHINGTON -- Workers at Overnite's Syracuse, New York terminal filed an election petition for Teamster representation.

"From Laredo, Texas to Syracuse, New York, this campaign is gaining momentum. Overnite workers understand the Teamster vision," said John Murphy, International Vice President and Director of Organizing. "With a Teamster contract comes the best wages and benefits, job security and job satisfaction in the industry. The Teamsters will work hand-in-hand with the Overnite workers to see that they get it."

Earlier this month, workers at Overnite's Laredo, Texas, terminal filed a petition for Teamster representation. Their election is scheduled for September 2, 1999. Overnite has already committed numerous election violations in Laredo, for which the Local has filed charges with the National Labor Relations Board (NLRB).

Overnite is a billion-dollar division of Union Pacific Corporation.