UTU News Digest - Wednesday, September 15, 1999

UTU Daily News Digest

Information of interest to operating railroad and transportation employees

Wednesday, September 15, 1999

FLORIDA: CSX Transportation prepares for Hurricane Floyd

JACKSONVILLE -- As Hurricane Floyd approaches the Florida coast, CSX Transportation Inc. (CSXT) says preparations are well under way to deal with the storm's impact.

"The safety of our employees and their families is our first priority," said Ronald J. Conway, CSXT president. The company today released all non- essential, non-operating personnel in the Jacksonville area to enable those employees to provide for their own and their families' safety. The company is drawing on qualified employees from other areas of its network to temporarily handle jobs critical to train operations.

The company's operations team is taking all necessary precautions, including moving locomotives and rolling stock to inland locations and removing gates on crossing warning devices, which could become projectiles in high winds. While the Jacksonville Operations Center and Information Technology headquarters are designed to withstand major force hurricanes, the company has contingency plans in place to handle critical functions at other locations if necessary.

CSXT continues to work closely with commuter and passenger agencies in Maryland (MARC), Virginia (VRE) and Florida (TRI-Rail). Commuter service over CSXT-dispatched rail lines in these states has been canceled for Wednesday, Sept. 15. Advance notice was given early Tuesday to allow commuter authorities, working with CSXT, time to communicate the decision in a timely manner so that riders could arrange alternate plans. In addition, all Amtrak trains dispatched from Jacksonville will be canceled effective 11 p.m. tonight. Decisions on service restoration will be made tomorrow.

Although east-west freight operations will continue, as normal, southbound trains will be staged at points north of the area affected by Floyd until the storm passes. Twenty-eight freight trains are affected presently.

"The railroad is very resilient, able to recover quickly from natural disasters," Conway said. "We have the resources in place to effect a smooth recovery and resume service for all of our customers as soon as possible."

Throughout the network, ballast trains are loaded and ready to move where required to repair any track damage. Equipment and supplies are being staged at key locations to mobilize quickly. Contractors are on alert with required supplies and personnel to assist with the railroad's disaster recovery plan.

CSX Transportation and its 34,500 employees provide rail transportation and distribution services over a 22,700 route-mile network in 23 states, the District of Columbia and two Canadian provinces. CSXT is a business unit of CSX Corporation, based in Richmond, Va.

ILLINOIS: Experts contradict Amtrak witnesses

CHICAGO -- A railroad signal expert testified on Tuesday that warning lights probably were flashing before a steel-loaded truck tried to cross the tracks and was struck by an Amtrak train in an accident that killed 11 passengers, the Associated Press reported.

But John Sharkey, a communications and signals general manager for Canadian National-Illinois Central Railroad, said he doubted a warning gate hit the truck.

Sharkey's account came on the second of three days of public hearings that the National Transportation Safety Board has been holding to look for clues into what caused the March 15 crash of the City of New Orleans train near Bourbonnais, about 50 miles south of Chicago.

In addition to the 11 deaths, 122 people were injured.

On Monday, Luis A. Nieves, who said he was driving the second of two cars stopped behind John R. Stokes' tractor-trailer, told board members he saw warning lights and heard bells as Stokes drove through the railroad crossing.

Nieves said he also saw a crossing gate strike Stokes' truck as he tried to drive it around the barrier, shortly before it was struck in the rear by the train.

But Sharkey, who analyzed event recorder data collected at the crossing gate, said he did not think the warning lights and gate activated simultaneously.

Sharkey said he "completely agrees'' with testimony given Monday by a steel company crane operator, Troy Schultz, who said he saw warning lights before the collision. But he said tests he performed on the crossing gate showed no evidence that it hit the truck.

The event recorder took down the approach of the train and the activation of the warning system but was not designed to detect any impact with the gates.

Stokes received a 60-day suspension and has since regained his driver's license. He has refused to testify in this week's hearing.

GERMANY: Rail chief fired by Transport Minister

BERLIN -- Transport Minister Franz Muentefering has fired the head of the German Railway, Johannes Ludewig, the ministry said Tuesday.

Ludewig has been under growing criticism for his management of the nation's vast rail system, which has suffered financial setbacks and a loss of prestige in the wake of a series of accidents.

Ludewig is to be replaced Jan. 1 with Hartmut Mehdorn, head of the board of directors for Heidelberger Druckmaschinen AG and a longtime Airbus executive.

Muenterfering, who is leaving the ministry to take over daily management of the Social Democratic Party, approved the changes recommended by the railway's board of directors.

The railway, Deutsche Bahn, also plans to replace the head of the head of the tourism subsidiary, Axel Nawrocki, with Christoph Franz, currently head of company development at the railway.

Morale at the railway has been spiraling since June 1998 crash of a high-speed train that killed 101 people. Railway workers complained about Ludewig's handling of the aftermath of the crash, blamed on a faulty wheel, saying he did not make clear that it was an equipment problem.

A series of other accidents following the disaster further tarnished the railway's image.

Sales and profits also were down last year, largely due to the impact of the crash. Deutsche Bahn's sales were flat 1998, while profits dropped to 334 million marks, or $191 million, from 533 million marks in 1997.

The change in management was welcomed by railway unions and consumer groups.

"There was no real forward-looking strategy under Ludewig," said Holger Jansen, spokesman for the Pro Bahn passenger advocacy group. He added, however, that some of Ludewig's difficulties were related to the railway's privatization process after decades under state control.

Union chief Norbert Hansen said he hoped the shakeup changed would bring more creativity to management.

ENGLAND: Railtrack hires engineering project managers

LONDON -- Railtrack <RTK.L> said on Wednesday it had hired four of the world's largest engineering project management groups to help deliver its 10.7 billion pound ($17.20 billion) investment plan for new and upgraded rail infrastructure.

Railtrack, which operates Britain's rail infrastructure, has come under increasing fire from regulators and consumer groups over the management of the nation's creaking network.

Among three U.S. groups chosen to supervise the investment projects -- part of a 27 billion pound, 10-year spending program -- was New York-based Parsons Brinckerhoff, Railtrack said in a statement.

Brinckerhoff, which has been involved in virtually every U.S. urban transit system and in systems worldwide, would oversee the upgrade of the West Coast mainline, it said.

San-Francisco-based Bechtel, already working on the Channel Tunnel rail link, would help with Railtrack's bid to takeover part of the London Underground network.

Railtrack said a joint venture of U.S. company Flour Daniel and UK firm Mott Macdonald would manage the modernization of the East Coast main line. It said contracts with the four companies were effective immediately and would run for seven years.

CANADA: Labor Congress calls for Indonesia boycott over East Timor

TORONTO -- The Canadian Labour Congress called on its 58 member unions on Tuesday to protest the violence in East Timor by boycotting goods to and from Indonesia.

The Congress said port, transportation and communication unions were investigating what steps could be taken to impede the flow of goods with Indonesia.

Congress president Ken Georgetti said the move was in response to the atrocities committed by the militias and others against the East Timorese people.

"We're telling our members to 'check the label, and if it's from Indonesia, or if there is a chance it's been produced in Indonesia, don't buy it," the newly elected Georgetti said in a statement.

Georgetti also called for a cessation of investment by Canadian companies in Indonesia.

He added that over 100 Canadian-based companies operate in Indonesia including Bank of Nova Scotia <BNS.TO>, Bombardier <BBDa.TO> Ltd., and Inco <N.TO> Ltd.

The Congress is the second international union to call for a boycott after the Australian Congress of Trade Unions launched its Campaign for Peace on Monday.

Violence erupted in East Timor after the territory opted for independence from Jakarta in a U.N. organized ballot on August 30. Canada has agreed to supply 600 troops to a multinational peacekeeping force, but Georgetti said this was not enough. Canada has cut off exports of military goods to Indonesia, but has not extended that to economic sanctions in general.

CANADA: CN launches Toronto-Montreal RoadRailer Service

TORONTO -- Canadian National has launched a state-of-the-art truck/train freight service between Toronto and Montreal with new dual-mode RoadRailer equipment.

The 53-foot RoadRailer trailers feature air ride, 110-inch interior height, more than 4,000 cubic feet of capacity and maximum payload of 70,000 pounds.

CN said it spent $13 million to acquire 200 RoadRailer Mark V trailers and 130 RoadRailer railroad bogies for the five-day-a-week, door-to-door service between Toronto and Montreal. Trains of up to 60 RoadRailers depart Toronto and Montreal at 9 p.m., arriving next morning at 5 a.m. Train length will increase as demand warrants. The trailers carry consumer goods, including foods, beverages, paper and building material.

MONTANA: Appeals Court will consider jurisdiction

BILLINGS -- A panel from the Ninth Circuit Court of Appeals will meet today in Billings to consider a landmark case involving Native American jurisdiction over railroad lands.

A tribal court awarded $25 million to the family of the mother and daughter who were killed by a train on the Crow Indian Reservation. The award was thrown out after a 1997 Supreme Court decision said that railroad property should be treated as non-Indian land, and thus not under the jurisdiction of tribal courts. An appeal by the family was taken up by the San Francisco-based Ninth Circuit Court.

NEW JERSEY: Atlantic City hotel workers go on strike

ATLANTIC CITY -- Raucous picketers from the ranks of 14,000 striking hotel workers greeted early morning visitors to Atlantic City casinos today.

Workers were striking against the Atlantic City Hilton, Tropicana Casino Resort, Bally's Park Place, Caesars Atlantic City Hotel Casino, the Sands Hotel Casino, Resorts Atlantic City, Trump Plaza, Trump Marina and Trump Taj Mahal.

Members of Local 54 of the Hotel and Restaurant Employees International walked off the job at nine casino hotels today after their five-year contract expired at midnight. Union members reached agreements at three other casinos before the deadline.

Among the targets of the strike is the Trump Taj Mahal. At the entrance this morning, about 100 union members jeered people attempting to drive into parking areas.

"Go to Showboat! Go to Showboat," they yelled, because representatives for Showboat Hotel Casino representatives had agreed on a contract.

Officials at the affected casinos vowed to remain open during the walkout, though they said they would have to close some of their restaurants.

Bartenders, banquet waiters, cocktail servers, maids, maitre d's, cooks and other rank-and-file workers began to disappear as the deadline passed. Cashiers and dealers are not unionized and are not participating in the work stoppage. The casinos employ between 40,000 and 50,000 people.

The collapse of contract talks Tuesday set the stage for a disruptive strike that also could inconvenience contestants and fans of the Miss America Pageant, scheduled for Saturday.

Union officials said members are satisfied with the terms of the resorts' latest contract offer, but they demand additionally that bosses stop hiring subcontractors who do not pay union wages.

Union president Bob McDevitt said the casinos failed to live up to the promises made when casino gambling was pitched to New Jersey voters in the 1970s.

Subcontracting "will erode the community and it will make it difficult in the Atlantic City area for workers to feed their families in the way that was promised by the casino industry," McDevitt said.

Carrying signs, rowdy union members set up picket lines at casino entrances and rallied on the Boardwalk shouting "No contract, no peace" and "Hey, hey, ho, ho, subcontracting must go." Police said the pickets were orderly.

Union negotiators came to terms with representatives of Harrah's Casino

Hotel, Showboat Hotel Casino and the Claridge Casino Hotel about 90 minutes before the midnight deadline.

NEW YORK: CIT Group to purchase 90 new locomotives

NEW YORK -- The CIT Group said Tuesday it would buy 90 high horsepower and 'road switcher' diesel electric locomotives from the Electro-Motive Division of General Motors Corp.

Deliveries for the high horsepower units will begin in the fourth quarter 1999, and deliveries for the GP15D road switchers, the largest order for new switcher locomotives in over 15 years, will begin in the first quarter 2000. The acquisition marks the first ever of new locomotives for CIT and the first for new locomotives for an operating lessor, said Nikita Zdanow, president and CEO of the CIT Group/Capital Finance.

The sale of the new locomotives is EMD's first to an operating lessor.

CIT will purchase 40 SD90MAC/4300 high horsepower and 50 GP15D and GP20D 'road switcher' diesel electric locomotives.

The SD90MAC/4300s employ alternating current (AC) traction motors, self-steering trucks, advanced microprocessor control. GP20D, while using the high-efficiency, low-emission 170 series engine, can pull more tonnage than other switchers currently in service, the company said.

WASHINGTON: STB denies reconsideration of Midwest rail services

WASHINGTON -- Surface Transportation Board (Board) Chairman Linda J. Morgan announced today that the Board has issued a decision denying a request for reconsideration of the Board's 1998 decision permitting the resumption of certain railroad services in the Midwest. Today's decision also denied a motion seeking to dismiss the proceedings on the theory that the Board should go back and revoke its 1998 authorization for the rail operations because private contractual issues could block the proposed new services.

The case involves efforts to restore service over a former "Rock Island" line in Missouri, now owned by Union Pacific Railroad Company (UP) that, though not recently used, has never been formally "abandoned" in a Board proceeding. In its 1998 decision, the Board denied petitions to revoke certain exemptions that would ultimately permit the Missouri Central Railroad Company (MCRR) to conduct operations over the line. The petitions to revoke were based on arguments that the Board could not allow the transactions to go forward without first conducting an environmental review. In its 1998 decision, and again in the decision issued today, the Board found that the traffic levels expected on the line did not meet the thresholds for environmental review contemplated by the Board's environmental regulations.

The decision also denied a motion to dismiss the proceedings on the ground that a UP news release was issued indicating that, during the time parties were filing documents with the Board concerning the revocation of the exemption, the deadline for completing the purchase of the line at issue had passed. Noting that MCRR has apparently sued UP to require it to close the deal, the Board found no basis for dismissing the case. The Board stated:

"[T]he notices of exemption in these proceedings, which are permissive in nature, were served and published and are effective. Thus, although operations by MCRR over the subject line cannot commence unless and until its right to use the line is established, once an exemption becomes effective, it is up to the parties to decide whether and how to go forward. . . . [T]he fact that the private parties may have a contractual dispute--even one that could have the effect of undermining the transaction--provides no basis for dismissing the already effective exemptions."

The Board's decision was issued Tuesday in Missouri Central Railroad Company--Acquisition and Operation Exemption--Lines of Union Pacific Railroad Company, STB Finance Docket No. 33508. It is available on the Board's web site at www.stb.dot.gov.

ILLINOIS: UniRailNet links Latin America to U.S. rail supply market

CHICAGO -- Saving money sounds good in any language and UniRailNet -- the world's first internet purchasing service for railroad components -- is doing just that in Spanish, Portuguese and English. For Latin American railroads, buying on the internet translates into savings of upwards of 20%. For U.S. railway suppliers (many of them based in Chicago), the internet is a cost-effective way to reach new markets.

UniRailNet -- a member of the Railway Supply Association, which is having its annual meeting in Chicago beginning Monday, September 20 -- is the first to offer an internet purchasing service that links U.S. suppliers of rail components with the six largest railroads in Brazil and major railroads in Chile, Bolivia and Argentina. Components include locomotive and car parts, railway equipment, tools, machinery and track material.

"It's quick, confidential, and efficient for both buyer and supplier," says David Powell, UniRailNet's president. "Using the net is an easy way for foreign railways to take advantage of the better prices and superior technology that U.S. and Canadian rail products have to offer. For suppliers, it's a less costly way to reach an important and growing market, while knocking down the barriers of language, time, and paperwork."

Just as consumers are turning to the net to save money buying books, appliances and automobiles -- more and more businesses are doing the same. According to a recent study by Forrester Research, internet business-to-business e-commerce is projected to grow from $17 billion in 1998 to $327 billion in 2002.

Powell estimates that Latin American railroads represent a potential market of more than $100 million for spare parts and material that could be fulfilled by the U.S. rail supply industry.

"Before UniRailNet," he said," foreign buyers and domestic manufacturers had to go through agents and middlemen, who typically added a 10%-to-25% commission to the cost of every purchase. UniRailNet charges only 4%. On a $5,000 order for locomotive power assemblies, for example, the savings could amount to $1,000."

The internet, Powell noted, permits smaller manufacturers to reach railroads in other countries without a major up-front commitment for agents and a supplier network. He said, "Buyers in South America have told us having a purchasing network like UniRailNet available to them in their own language has minimized the intimidation factor of having to deal with other languages both written and verbal."

Powell predicts that international demand for U.S. rail products will grow as more nations privatize their railways -- weaning them away from a century or more of government ownership. Many are managed by American entrepreneurs, such as RailAmerica, Genesee & Wyoming, and Wisconsin Central Transportation Corp. "U.S. managers have a tradition of running railroads profitably," said Powell. "One way to do that is to cut costs and improve reliability, and that can come, in part, by buying components from American railroad suppliers."

The idea of obtaining superior products at competitive prices from a global marketplace has sparked a lot of interest, Powell added. "Inquiries have come from such countries as South Africa and China as well as U.S. short lines and regional railroads."

UniRailNet, New York, N.Y., began operations in April 1999 and was established by UniRail LLC, a company that specializes in providing investment and management services to railroads worldwide.