UTU News Digest - Monday, June 14, 1999

UTU Daily News Digest

Information of interest to operating railroad and transportation employees

Monday, June 14, 1999

WSJ: Norfolk Southern, CSX continue to struggle with freight delays

NEW YORK CITY -- Instead of getting better, problems that were reported in the first week after the June 1 Conrail carve-up are persisting, and may even be getting worse.

According to today's Wall Street Journal (WSJ), freight tie-ups and service failures are continuing to create headaches for railroad customers.

Norfolk Southern acknowledged that computer foul-ups have led to misrouted shipments and backups at major freight yards in the Northeast and Midwest, and industry officials said that in some cases, Norfolk Southern computers were misclassifying railroad cars as empty, when in fact they were loaded. The result is that some cars have been sent to the wrong place.

CSX also cited some computer problems and freight delays at facilities in Cleveland, Indianapolis and Albany, N.Y., the WSJ reported.

The railroads said they are taking remedial action and expect to have the former Conrail routes running smoothly in two to three weeks. But some people said that the railroads are in a critical stage when they must demonstrate they are in control or in danger of being overwhelmed by the problems. Already, the railroads have parked some trains on sidings and have run short of crews because of congestion. If left unchecked, such problems can have a ripple effect.

"It's either going to peak and boil over, or they will fix the fires," said Gary Landrio, a vice president of Stone Consulting & Design Inc., Warren, Pa.

Last week, Ford Motor Co. shut down some production briefly at its plants in Buffalo, N.Y., and Oakville, Ontario, because rail shipments of critical materials arrived late. Ford spokesman Ron Iori said the company is closely monitoring rail shipments to avoid outages at Ford plants in Ohio and Michigan.

J.B. Hunt Transport Services Inc., a Lowell, Ark., trucking company that uses rail for many of its long-distance deliveries, said some Norfolk Southern trains between Chicago and northern New Jersey have been as much as eight hours late. As a result, J.B. Hunt has had to reschedule delivery appointments with its customers. J.B. Hunt and United Parcel Service of America Inc., another big rail user, said they will wait until the middle of the week to decide if rail service is improving or they need to divert shipments to the highways.

Even Amtrak, the national passenger railroad, reported that some of its trains that operate over former Conrail tracks are running late due to freight congestion.

At least so far, the rail problems in the East aren't anywhere near as severe as those in the West in 1997 and 1998 after Union Pacific Corp. took over Southern Pacific Rail Corp. Those problems led to rail gridlock, massive freight backups and higher costs for rail users. The Union Pacific problems also made rail customers nervous about the planned $10 billion takeover and carve-up of Conrail.

Norfolk Southern, Norfolk, Va., said computer foul-ups have caused some of its freight yards to fall behind. The company said it has identified the cause of the problem and is implementing a solution. Meanwhile, it is making sure that some processes continue to function on a manual basis.

"We've experienced some difficulties, and we are working arduously to resolve those issues," said Steve Tobias, Norfolk Southern's chief operating officer. "We are extremely regretful of any inconvenience or disappointment we have caused in our customer-service package."

Michael Ward, an executive vice president at CSX's rail unit, said Cleveland has become a bottleneck for its new operation. Richmond, Va.-based CSX is shifting some fueling operations to other locations, rescheduling trains to arrive at different times and accelerating construction of additional tracks. He said a "minor mismatch between [computer] files at CSX and Conrail" caused a backup of 800 freight cars at the company's yard near Albany, but a change in procedure is eliminating the backup.

"We aren't ready to declare victory," Mr. Ward said. "Things won't be running as well as we would like until the end of this month."

TEXAS -- UK's Stagecoach buys Coach USA

HOUSTON -- British bus and rail company Stagecoach Holdings PLC today rode into the consolidating U.S. road transport market with a $1.24 billion acquisition of the Houston-based Coach USA.

Larry King, Coach USA's chairman and chief executive, said none of its 13,000 employees would lose their jobs. King joins Stagecoach board and will continue to run Coach USA operations.

Coach USA offers a range of transport services including charter buses and airport shuttles and is the largest charter and tour bus company in the U.S.

Stagecoach is paying $42 for each Coach USA share, against a close of $38.62 Friday. It will assume another $638 million of debt, valuing the whole transaction at around $1.875 billion.

The acquisition is the first step into the U.S. by Stagecoach, founded in the early 1980s by brother-and-sister team Brian Souter and Ann Gloag. Based in Scotland, Stagecoach already has operations in Hong Kong, Australia, Portugal, Sweden, Kenya and Finland.

"It is giving us a broader base. It will add value for our shareholders. And it also has substantial growth opportunities going forward," Keith Cochrane, Stagecoach's finance director told Reuters.

Stagecoach and Coach USA will be looking to expand in the $20-billion U.S. motorcoach market and the school bus sector, estimated to be valued at $15 billion.

Founded in 1995 by venture capitalist Steven Harter, Coach USA will give Stagecoach 9,500 motorcoaches, taxi cabs and other vehicles, with over half of the fleet less than five years old.

Cochrane said the deal was expected to be completed by the third quarter of 1999 and it would immediately enhance earnings.

A transport analyst said the acquisition could add $20 million to Stagecoach's profits.

"There are plenty of further acquisitions to make to consolidate the whole U.S. market, and Coach USA will be Stagecoach's vehicle to do that," he added.

The Perth, eastern Scotland-based company is financing the transaction with a loan of $2.25 billion from Credit Suisse First Boston, J.P. Morgan, The Royal Bank of Scotland and the Bank of Scotland.

Stagecoach, will, however, refinance the facility, up to $1.0 billion, with money raised from debt and equity markets in due course so that it could fund more expansion in the future.

"Growth opportunities exist in this marketplace. One of the most exciting things for us is the significant organic and acquisition growth potential that this business has," Cochrane said.

Coach USA, like Stagecoach, has expanded rapidly through acquisitions and operates in 24 states in the U.S. and in Mexico and Canada.

WASHINGTON, D.C.: Communities selected for transit pilot program

WASHINGTON -- Ten communities have been selected to participate in the federal Bus Rapid Transit (BRT) demonstration program to show how combining planning and technological devices will allow buses to operate with the speed, reliability and efficiency of light rail vehicles at a fraction of the cost, Federal Transit Administrator Gordon J. Linton announced last week.

BRT, a program of the U.S. Department of Transportation's Federal Transit Administration (FTA), offers many of the features of a subway system -- vehicle movements unimpeded by traffic signals and congestion, fare collection prior to boarding, quick passenger loading and unloading, efficient and reliable service -- but above ground and visible. Currently, successful BRT systems are operating in Curitiba, Brazil; Ottawa, Canada; and Orlando, Fla.

The demonstration program announced today will advance BRT implementation in the United States at ten competitively chosen locations, backed by technical support from FTA.

Linton listed and briefly described the following selected projects and members of the BRT Consortium, those communities that are developing BRT projects:

Boston -- The Massachusetts Bay Transportation Authority's 3.8 mile "Silver Line " on Washington Street will run to and through downtown to the South Boston Piers and Logan Airport.

Charlotte, N.C. -- The City of Charlotte's Independent Corridor will add to its exclusive busway in the median of Independence Boulevard. The project potentially could be 13.5 miles long.

Cleveland -- The Greater Cleveland Regional Transportation Authority proposes to rebuild a 5-mile section of Euclid Avenue to provide for exclusive transit lanes, a beautified avenue with landscaping, and transit shelters.

Dulles Corridor, Va. -- The Virginia Department of Rail and Public Transportation proposes BRT as an intermediate phase to the extension of Metrorail in this 22-mile long corridor. BRT would operate mainly on the Dulles Airport Access Road stopping at median stations built for the Metrorail extension.

Eugene-Springfield, Ore. -- The Lane Transit District proposes to implement BRT in a variety of exclusive lane configurations on a 10-mile pilot corridor in Eugene and Springfield.

Hartford-New Britain, Conn. -- The Connecticut Department of Transportation has proposed a nine-mile, 12-station exclusive busway to be built on active and inactive rail rights-of-way.

Honolulu -- The City and County of Honolulu has proposed "City Express," a 12.6-mile system with limited bus stops using HOV lanes on Hawaii's H-1 freeway and downtown exclusive lanes.

Miami -- Metro-Dade Transportation Authority will extend their existing eight mile, fifteen station busway another eleven miles and 22 new stations to Florida City.

San Juan, Puerto Rico -- The Puerto Rico Highways and Transportation Authority will operate fast shuttle service on a new 2.5-mile Rio Hondo connector linking the Bayamon Tren Urbano Station and the Rio Hondo Tren Urbano Plaza.

Santa Clara County, Calif. -- The Santa Clara County Valley Transportation Authority will improve operations on its 27-mile long Line 22 in six cities: San Jose, Santa Clara, Sunnyvale, Mountain View, Palo Alto and Los Altos. Other members of the BRT Consortium include Alameda & Contra Costa Counties, Calif.; Albany, N.Y.; Chicago; Los Angeles; Louisville, Ky.; Pittsburgh; and Montgomery County, Md.

In announcing the selected projects, Linton said, "Bus Rapid Transit is truly a visionary approach in providing high quality transit service essential to ensuring mobility and access for thriving communities, and the projects announced today show promise of achieving the highest speed, air quality attainment and separation from traffic. With the selection of these demonstration projects, we are one step closer to providing 'world class subway service on tires' to cities across this country."

PENNSYLVANIA: DOT marks anniversary of TEA-21

PHILADELPHIA -- Commemorating the first anniversary since President Clinton signed the Transportation Equity Act for the 21st Century (TEA-21), U.S. Transportation Secretary Rodney E. Slater Friday (June 11) cited several grants to Pennsylvania that are being used to carry out programs funded under TEA-21.

"The impact of TEA-21 on Philadelphia underscores President Clinton's vision of transportation as more than concrete, asphalt and steel. Simply put, transportation is the means by which Americans get to where they need to go, to jobs, to schools, to markets, to take advantage of all the opportunities our great nation offers," said Secretary Slater. "In an unprecedented way, TEA-21 is putting people first and helping to rebuild America, improve safety, protect the environment, spur the economy and expand opportunity."

Secretary Slater said that TEA-21 will provide Pennsylvania with almost a 50 percent increase in federal aid funding than it received under the previous six-year surface transportation bill, the Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA). Among all the states, it will receive the fourth largest amount of federal aid funding and an average of $1.58 billion in apportionments and formula grants per year under TEA-21.

As an example of the law's success, Secretary Slater noted that Philadelphia received more than $2 million funds under two innovative provisions in TEA-21, the Access to Jobs program to help those in need gain access to employment opportunities, and the Transportation and System and Community Preservation (TCSP) Pilot program to help communities develop area-wide strategies to promote transportation efficiency.

Secretary Slater also noted that the Federal Transit Administration will provide almost $5 million in funding to upgrade the Frankford Transportation Center, a multi-modal terminal located at the Market-Frankford subway elevated line that is used by thousands of commuters. In addition, the Southeastern Pennsylvania Transportation Authority (SEPTA) has developed a new railroad grade crossing sign in conjunction with DOT's Federal Railroad Administration, which will improve safety for school children and other bus passengers.

In May, Philadelphia received $25,000 from federal aid highway research funds for a national public education program to increase awareness about how personal travel choices affect traffic congestion and air quality.

The program, known as It All Adds Up to Cleaner Air, is sponsored by the U.S. Department of Transportation and the Environmental Protection Agency. Under the program, the $25,000 will be used to customize and place public service announcements (PSAs) in local print and broadcast media and to develop community-based partnership programs to inform the public about the connections between their transportation choices and traffic congestion, air pollution and public health.

TEA-21, which President Clinton signed on June 9, 1998, is a six-year surface transportation reauthorization that guarantees a record $198 billion investment, within the limits of the balanced budget act, to maintain and improve America's surface transportation systems for the 21st century. TEA-21 continues core highway, bridge and transit programs, with balanced investment for highways, transit, rail, and intermodal projects.

TEA-21 focuses on improving safety, rebuilding America, protecting the environment, creating opportunity and ensuring global competitiveness. It does so while protecting commitments to a balanced budget and recognizing President Clinton's other vital priorities, such as education, child care, and Social Security.

CALIFORNIA: Metrolink to order up to 35 passenger cars for $49 million

LOS ANGELES -- Welcome news for Metrolink commuter rail riders came Friday (June 11) as the Southern California Regional Rail Authority Board authorized $49 million for the purchase of up to 35 shiny new passenger cars which will help ease rush-hour crowding.

"We are literally running out of seats on some routes during the rush-hour," said Bill Davis, Metrolink Board Chairman and Simi Valley Mayor. "Riders will see relief by the end of next year when the sleek new cars are scheduled to arrive."

The new passenger cars will have the same general characteristics of the existing fleet which feature a bi-level design capable of seating 138 passengers. The cars include carpeting, central air and heating units and accommodations for bicycles as well as being fully accessible to the disabled.

Using federal, state and local transportation grants, the new cars will take roughly 18 months to build and deliver. Metrolink officials estimate that once final negotiations are secured, expected within the month, each passenger car will cost approximately $1.8 million.

Metrolink will enter into an agreement with Canadian-based Bombardier Transit Corporation to buy the periwinkle blue-and-white double-decker passenger cars. The new cars will be added to the existing Metrolink fleet of 119 passenger cars, also made by Bombardier.

More than 28,000 average daily riders take Metrolink from outlying suburban communities into urban business centers. The commuter rail service operates 130 daily trains serving 46 stations throughout the 416-mile passenger railroad network.

TEXAS: Train-hopping Mexican sought in murders

HOUSTON -- Investigators searched for clues yesterday to the whereabouts of a Mexican drifter alleged to be a serial killer with a taste for riding the rails.

Police in the United States and Mexico were looking for Rafael Resendez Ramirez, who has been linked to six deaths in Texas and one in Kentucky, all brutal beatings that took place near railroad tracks.

"Right now he is the most wanted man in Texas," said Texas Department of Public Safety director Dudley Thomas. "We certainly need to hear from anyone with information that could lead us to him."

Resendez is thought to be crisscrossing Texas by hopping eastward-bound freight trains, then heading back west toward the Mexican border in cars stolen from victims of his alleged murder spree.

Saturday, police in the border city of Del Rio, Texas found a 1993 Honda that belonged to Noemi Dominguez, a 26-year- old school teacher beaten to death in her rail-side Houston home on June 5.

The car was parked near a bridge crossing the Rio Grande into Mexico, but investigators did not yet know if the thief had fled south of the border. FBI spokesman Rolando Moss said Sunday that Mexican authorities are helping in the search for Resendez.

A Houston Police Department spokesman said that a team of forensic experts had been sent to Del Rio Sunday to examine the car for evidence that could link it to Resendez.

Resendez, a native of Puebla, Mexico, is thought to be in his late 30s. He has a U.S. criminal history going back 20 years and is known to have used numerous aliases and disguises. Police photographs show a bespectacled man with dark skin and features.

So anxious are Texas authorities to capture him that last week more than 100 officers from state, local and federal police agencies searched trains from Houston to the Mexican border, 350 miles (560 km) west. They also opened a public hotline to which 400 people have called with tips.

Resendez first came to the attention of police in December 1998 when a Houston woman was found beaten and stabbed to death in her home in an affluent suburb near a railroad track. Her stolen car was discovered later in San Antonio, Texas, 200 miles (320 km) west. On it was a fingerprint belonging to Resendez.

In May and early June, three people, including the minister of a church and his wife, living three miles (4.8 km) apart were found bludgeoned to death at the small town of Weimar, Texas, which sits beside the main railroad track between Houston and San Antonio. Resendez' fingerprint was found in the home of one of the victims, 73-year-old Josephine Konvicka, police said.

That was followed by Dominguez' brutal murder on June 5. Police now also believe Resendez may have killed a university student in Kentucky who was fatally beaten while walking along a railroad track with his girlfriend in August 1997 and a Luling, Texas man who was clubbed to death in his home in November.

Along with the fingerprints in the two cases and the similarity of modus operandi in all of them, police say they have found other undisclosed evidence linking the deaths to Resendez. But so far, he has been indicted only for burglary in the December crime.

MICHIGAN: Automakers, UAW begin contract talks

DETROIT -- Leaders of the United Auto Workers (UAW) union will sit down this week with the Detroit automakers to start negotiations on new contracts, intent on increasing UAW membership and sharing the wealth of a record U.S. sales year.

Neither the UAW nor any of the Big Three -- General Motors Corp., Ford Motor Co., DaimlerChrysler AG -- appears willing to derail this year's record U.S. car and truck sales, which have led to soaring profits and ample overtime.

"I don't think we're going to see a strike this fall," said David Cole, director of the University of Michigan's Office for the Study of Automotive Transportation.

"I don't think it's in the stomach of either labor or management," he added.

UAW President Steve Yokich, speaking at a news conference last month, summed up the UAW's focus this way:

"Job security is the No. 1 issue. We can negotiate the best wage and benefits package, but it won't mean anything if we don't have the jobs."

The UAW wants to make it easier to organize new plants, like the Mercedes sport utility vehicle plant (SUV) in Alabama and the Freightliner truck plant in North Carolina.

What's more, the UAW plans to ask the automakers to help it with its drive to organize the workers of its independent suppliers, where the pay averages $12.20 an hour, about 40 percent to 50 percent less than what UAW workers earn. According to the UAW, 24 percent of the employees of independent auto suppliers were members of the union in 1978 -- a number that has dropped almost in half.

And the UAW would like to see GM, the world's largest automaker, junk its plan to build smaller vehicle manufacturing plants that use "modular" assembly methods. Such plants would use fewer workers and let suppliers build bigger parts of the vehicle.

Heading toward the Sept. 14, 1999, expiration of the current three-year contract, each of the automakers has its own agenda to pursue with the UAW.

GM, stung by strikes last summer at two Flint, Mich., parts plants, which cost the company $2.0 billion, has taken steps to mend its historically bad relations with the union. At the same time, GM is gingerly pushing forward a manufacturing process that angers the UAW. GM executives, including Gary Cowger, the newly named labor relations vice president, have chosen their words carefully when discussing the UAW.

On the other hand, Yokich, the UAW president, hasn't minced words, saying the relationship with the No. 1 automaker is still strained.

UAW membership at the three Detroit automakers includes about 101,000 at Ford and 75,000 at DaimlerChrysler and 172,000 at GM, not including its former Delphi Automotive Systems parts unit. UAW members currently make $21 to $25 an hour before benefits.

Despite protests from the UAW, GM spun off Delphi and its 48,000 UAW members in February. At the same time, GM, the least efficient domestic automaker, has steadily pushed ahead with shrinking its hourly headcount through attrition. Over the past three-and-a-half years, GM and Delphi have cut 28,000 union jobs through attrition, a GM spokesman said.

Ford, considered to have the best relations with the UAW, hasn't faced a strike by the UAW in more than 10 years. But union executives said they would be strongly opposed to a spinoff of its Visteon parts company, considered by many of the 23,500 UAW members who work there to be a core part of Ford.

"We did a lot of things to get Ford where they're at today, and for them to split up that family now would offend us very, very, very much," Ron Gettelfinger, the UAW's vice president for Ford, said last month.

In the 1996 negotiations, Ford pushed for a contract longer than the traditional three years before abandoning the idea when the talks bogged down. The automakers will raise the issue this year, but uncertainties about the economy further out could again scuttle the proposal, industry officials said.

Several new issues confront DaimlerChrysler, which is negotiating its first UAW contract since Germany's DaimlerBenz merged with Chrysler last year. The UAW has said organizing workers at the Mercedes SUV plant in Alabama and the Freightliner truck plant in North Carolina are top priorities.

DaimlerChrysler has officially taken a neutral stance on the issue. But UAW leaders have not been happy with how Mercedes executives have reacted to their efforts.

Meantime, the negotiations will feature the first-ever face-off of Yokich -- who sits on the German-based firm's supervisory board -- and Chairman Juergen Schrempp.

The UAW will not select which company it will negotiate with first -- the so-called target of the pattern talks -- until shortly before the contract expiration in mid-September.