UTU News Digest - Friday, March 10, 2000

UTU Daily News Digest

Information of interest to operating railroad and transportation employees

Friday, March 10, 2000

WASHINGTON: Divergent views offered on rail industry's future

WASHINGTON -- Rail shippers gave the Surface Transportation Board an earful of unhappiness over the quality of rail service at a hearing this week about the future structure of the rail industry, the Journal of Commerce reported.

While railroads and shipper groups testified on Tuesday, the second day was devoted to rail unions, regional and short line railroads, intermodal and logistics companies and chemical and plastics shippers.

There were no surprises, as most of the witnesses represented positions that have been well known ever since Burlington Northern Santa Fe Corp. and Canadian National Railway Co. announced their plan to combine on Dec. 20, 1999.

Unions used the hearing to advance their campaign for an end to the railroad practice of abrogating or changing labor agreements on the ground that it is necessary to achieve the benefits of mergers that have been approved by the STB.

Shippers sought a variety of cures for what they consider inadequate rail service. Some, such as United Parcel Service, said that in approving future combinations the board should require that shippers be granted access to at least two railroads to ensure competition between railroads.

Several shippers asked the board to impose a moratorium on rail mergers until the industry gets over the congestion and service problems that followed several recent mergers. Dupont Co. asked for competition for all customers that were sole-served by either BNSF or CN on the date of their announcement.

A number of shippers, short lines and logistics companies, meanwhile, said their rail service is improving or satisfactory and told the board it should deal with the BNSF/CN transaction as it has other recent mergers.

On Thursday, the STB heard from automobile manufacturers, electric utilities, steel companies, coal and mineral companies, lumber and paper shippers, and several economists.

After two days, the outcome still is unclear.

STB Chairman Linda Morgan is obviously building a record that will support her decision, whatever it turns out to be.

BNSF and CN want the board to treat their transaction like other rail mergers. Union Pacific, Norfolk Southern, CSX Transportation and Canadian Pacific have been campaigning for a moratorium, saying they would be forced to develop strategic responses to BNSF/CN and that this is a bad time for them to focus on mergers when they should be focused on service improvement.

The board has received considerable pressure to impose a moratorium from members of the House and Senate, but there was no unanimity from that quarter either.

Absent a compelling case for changing long-standing procedures for dealing with rail mergers, many commerce lawyers at the hearing believe the STB will be reluctant to make significant changes.

WASHINGTON: Amtrak Capital Funding Bill Introduced in House

WASHINGTON -- Amtrak President George Warrington expressed enthusiastic support for a bill introduced Thursday in the House that would give the national passenger railroad authority to sell up to $10 billion in bonds whose revenue would finance high- speed rail corridors around the country, a wire service reported.

The bill would give tax credits to purchasers of the bonds, which would be issued to raise capital for the development of high-speed rail corridors.

Rep. Amo Houghton (R-N.Y.), a senior member of the Ways and Means Committee, and Rep. James Oberstar (D-Minn.), the ranking Democrat on Transportation and Infrastructure Committee, introduced H.R. 3700, "The High-Speed Rail Investment Act." Cosponsored by a bipartisan group of 15 representatives (see attached list), this bill is the House companion to S. 1900 that was introduced in November 1999 by Senator Frank Lautenberg (D-N.J.) and cosponsored by 33 senators from both parties.

"Amtrak thanks Representatives Houghton and Oberstar for their tremendous support for passenger rail over the years, and I think American travelers are going to thank them too, when high-speed rail begins to loosen the grip of transportation gridlock in various regions of the country," said Warrington. "This creative, bipartisan legislation demonstrates that rail travel is finally being broadly recognized around the country as an efficient, cost-effective alternative to congested highways and airports."

The "High-Speed Rail Investment Act" would enable Amtrak and other intercity rail passenger carriers to sell $10 billion in high-speed rail bonds over 10 years. The funds would be used to upgrade existing routes, construct new dedicated high-speed rail tracks, purchase locomotives and passenger coaches, and fund capital improvement to the existing high-speed rail corridor in the Northeast. Investors would receive federal tax credits based on the amount of their bond purchases.

"These Representatives have crafted an important measure that will support the grassroots movement growing nationwide to improve and expand rail service," said Gov. Tommy Thompson, Amtrak’s chairman of the board.

WASHINGTON: Safety Officials, School Bus Information Council Warn Selling Passenger Vans for School Buses Violates Federal Law

WASHINGTON -- States that permit the use of passenger vans instead of traditional school buses are putting children at increased risk, and dealers that sell them violate federal law, the National Highway Traffic Safety Administration (NHTSA) joined school bus experts in warning Thursday, a press release said.

According to Charles Gauthier of the School Bus Information Council, "The biggest school-related safety risk for children in this country is their choice of transportation to and from school. It's false economy for states to cut corners in pupil transportation by allowing students to ride in 12- and 15-passenger vans."

"Yet, 19 states currently allow vans for school transportation, and 27 permit their use to transport students for school-related activities, such as field trips and sporting events. Decisions to use vans appear to be budgetary ones. But from a safety perspective, it's a penny-wise and pound-foolish policy," Gauthier said.

Tragically, there have been crashes involving passenger vans where school children were killed or seriously injured. As the result of National Transportation Safety Board (NTSB) investigations of several such crashes, last December Senators John McCain and Ernest Hollings and National Transportation Safety Board (NTSB) Chairman Jim Hall signed a letter to the governors of each state asking them to enact state laws prohibiting the use of vans for school transportation.

Gauthier said several states already have taken actions to phase out the use of passenger vans, but most have not. In fact, during the past two years, two states revised their laws to allow the use of vans for transporting school children.

NHTSA gave another reason for states to rethink their laws allowing passenger vans for student transportation -- it's illegal for dealers to sell or lease new vans for this purpose.

"Federal law prohibits dealers from selling or leasing a new motor vehicle with a capacity of more than 10 persons for the purpose of transporting students to and from school, or a school-related activity, unless the vehicle meets the rigorous Federal Motor Vehicle Safety Standards for school buses," Gauthier said.

It is difficult to modify a van to meet all the safety requirements, and a full-sized bus has the added and very significant safety advantage of its much larger size. "You can't just paint a van yellow and call it a school bus. Parents need to know that a van offers their children much less protection in a crash," Gauthier cautioned.

He noted that manufacturers of passenger vans (DaimlerChrysler, Ford and General Motors) have provided written notification to their dealers reminding them that federal law prohibits sales/leases of these vehicles for school transportation, and that they are subject to penalties for violations. Last October, for example, two dealers in Texas were fined a total of nearly $6,000.

"School buses are subject to more safety requirements than any other vehicle on the road, and NHTSA is researching additional safety enhancements. Federal regulators set the bar very high to make sure school buses are as safe as humanly possible," he added.

"How ironic that we have school buses that provide incredible protection for our young people, but some states have enacted laws permitting the use of a less safe alternative," Gauthier said. "Some require school buses for public school students, but permit the use of vans for private schools, day care centers, special education, Head Start and homeless students, and sporting events. All students deserve the superior protection afforded by the big yellow school bus, whether going to and from school or an extracurricular activity."

Every year, the nation's 440,000 school buses travel about 4.3 billion miles, transporting some 24 million children to and from school and school-related activities. They have an impressive safety record, unequaled in the transportation industry. An average of nine school-age children die each year as occupants of school buses, but most of these fatalities involved catastrophic crash circumstances.

"In contrast, more than 600 school-age children are killed each year in passenger cars, light trucks and vans during normal school transportation hours. Almost all of these deaths could be prevented if children rode in school buses," Gauthier said.

He credited the stellar safety performance of school buses to the sheer size of the bus that gives it the advantage in all but the most severe crashes; tough federal safety standards that exceed those required in other passenger vehicles; and the skill, special licensing and training requirements of school bus drivers.

For more information about pupil transportation safety, visit the School Bus Information Council website at www.schoolbusinfo.org, or NHTSA's website at www.nhtsa.dot.gov.

WASHINGTON: Senate Passes $40 Billion Aviation Bill

WASHINGTON -- The Senate Wednesday passed a $40 billion bill to fund aviation programs over the next three years with increased money for airport improvements and air traffic control upgrades, Reuters reported.

The Senate voted 82-17 for the Aviation Investment and Reform Act that also includes measures to increase airline competition and improve safety.

The 25 percent boost in funding for the Federal Aviation Administration is expected to be taken up by the House next Tuesday, aides said. The bill ensures the $33 billion expected to come into the Airport and Airway Trust Fund over the next three years goes to aviation projects, ending the practice of using a portion to offset other budget spending.

Another $6.7 billion would come from general revenues. FAA's budget for fiscal 2001 that starts Oct. 1 would increase to $12.7 billion from $10 billion this year.

Air travelers could see ticket taxes increase by up to $1.50 per leg of their journey to $4.50 under an expansion of the passenger facility charge program that helps finance airport improvements. In other changes, the measure will phase out takeoff and landing limits at three of the nation's four slot-controlled airports.

At Chicago's O'Hare Airport, slot restrictions would end by July 1, 2002. At New York's LaGuardia and Kennedy airports, slot rules would end Jan. 1, 2007. The slot restrictions at those three airports would end immediately for regional jets in an effort to boost service to smaller communities. Restrictions would still apply at Washington's Reagan National Airport but daily flights would be expanded to allow 12 flights within the current 1,250 mile (2,000 km) flight limit and 12 flights over the limit.

Major hub airports dominated by one or two carriers would have to provide a competition plan as a condition for obtaining airport improvement grants or applying to raise passenger facility charges. Safety measures include making improved lighting eligible for airport improvement funding. And, penalties for trafficking in bogus aviation parts would increase.

The bill also amends the Death on the High Seas Act to help the families of some air crash victims claim the same compensation as if the accident had happened over land. The bill extends to boundary, beyond which only lost wages can be claimed, to 12 miles off the coast from three miles currently.

WASHINGTON: STB issues decision initiating CN/IC general oversight proceeding

WASHINGTON -- Surface Transportation Board (Board) Chairman Linda J. Morgan announced Thursday that the Board has issued a decision initiating a "Canadian National/Illinois Central merger" general oversight proceeding and requesting comments from interested persons on the progress of implementation of the transaction and the workings of the various conditions imposed upon the transaction by the Board, a wire service reported.

Background. In a decision issued in May 1999, the Board approved, subject to certain conditions, the acquisition, by Canadian National (CN), [FOOTNOTE 1: Canadian National Railway Company, Grand Trunk Corporation, and Grand Trunk Western Railroad Incorporated.] of control of Illinois Central (IC), [FOOTNOTE 2: Illinois Central Corporation, Illinois Central Railroad Company, Chicago, Central & Pacific Railroad Company, and Cedar River Railroad Company.] and the integration of the rail operations of CN and IC. The Board-imposed conditions included a five-year, general oversight condition imposed to allow the Board to assess the progress of the CN/IC transaction's implementation and the workings of the other Board-imposed conditions. The Board retained jurisdiction to impose additional conditions and/or to take other action if, and to the extent, the Board determined it necessary to address harms caused by the CN/IC transaction.

In its May 1999 decision, the Board specifically indicated that, under its general oversight condition, the Board would monitor implementation of the transaction and the workings of its conditions with respect to various matters, including without limitation concerns regarding: (1) operation of the CN/IC/KCS [FOOTNOTE 3: The Kansas City Southern Railway Company.] Alliance Agreement, particularly with respect to ongoing competition within the Baton Rouge-New Orleans corridor; (2) North Dakota grain shippers with respect to the Chicago gateway; (3) investment in, and operation of, the Detroit River Tunnel; (4) any merger-related link to any unfair pricing practices in the lumber industry; (5) lack of appropriate labor protective conditions if unauthorized control of CN/IC and KCS should occur; and (6) any necessary monitoring of the Board's environmental mitigating conditions.

Today's Decision. In the decision issued today, the Board announced that it is: initiating a CN/IC general oversight proceeding to implement its general oversight condition; requiring CNR [FOOTNOTE 4: Canadian National Railway Company.] to file a progress report on the CN/IC transaction, and to make certain data available to interested persons; and requesting comments from interested persons on the progress of CN/IC-transaction implementation and the workings of the various conditions imposed. The Board's decision establishes a schedule for initiating the first annual oversight one year after July 1, 1999, the date that CN acquired control of IC.

Service List. Any person wanting to be on the service list (list of official participants) for the general oversight proceeding, and to receive copies of CNR's filings relating to the proceeding, must send written notification to the Board and a copy of such notification to CNR's representative. Written notice to the Board should be addressed to:

Attn.: STB Finance Docket No. 33556 (Sub-No. 4)
Case Control Unit
Office of the Secretary
Surface Transportation Board
1925 K Street, N.W.
Washington, DC 20423-0001

Written notice to CNR's representative should be addressed to: Paul A. Cunningham, Harkins Cunningham, 801 Pennsylvania Avenue, N.W., Suite 600, Washington, DC 20004-2664.

Progress Report. CNR must file, by July 3, 2000, a progress report containing an in-depth analysis of implementation of the CN/IC transaction and the workings of the various Board-imposed conditions.

Comments By Interested Persons and Replies. Interested persons may file, by August 18, 2000, comments on the progress of implementation of the CN/IC transaction and the workings of the various Board-imposed conditions. Replies to comments may be submitted by September 5, 2000.

ILLINOIS: Railroad officials feel scorn of Maple Park

CHICAGO -- The folding table in the middle of the old Maple Park Grade School gym floor appeared to be a vulnerable spot for the two Union Pacific executives to be sitting, the Chicago Tribune reported.

With the eyes of hundreds of fuming, railport-opposing Kane County residents boring into them from the bleachers in front of and behind their folding chairs at Tuesday night's village board meeting, Michael Payette and Tom Zapler were wide-open targets for questions they could not or would not answer.

Payette, who is the railroad's assistant vice president of governmental relations in Chicago, fielded questions about the traffic, noise, pollution and crime that Union Pacific's planned $192 million, intermodal rail hub could bring the 650-resident village on the Kane-DeKalb County line.

But much to the disdain of the crowd, his answer was often, "We really can't speculate about that, either."

Railroad officials said they are just now launching a series of studies on traffic, tax and economic impacts the proposed railport would have on the area.

They said they look forward to the opportunity to return in April with answers that they believe will persuade the community to support the railport.

The railroad wants to build a 10-track rail depot on the eastern edge of the little farm town. After bailing out of a similar, and equally unpopular, project in West Chicago last year, the railroad moved its plans west to more rural Maple Park.

The village may be small, but residents so far have shown a fair amount of feistiness in opposing the railroad.

Payette asked for Maple Park to be patient and open-minded about the impact of the railport on the community.

"We aren't here to ask for anything tonight," Payette told the crowd. "We want to hear your concerns. . . . We learned from West Chicago that we don't want to make final plans without citizen input."

The railroad wants to come up with plans that "everybody, or almost everybody, can support," Payette said.

But it appears that most minds are made up. When one member of the audience stood up and asked who in the gym was in favor of the railport, only Maple Park Mayor Ray McAdams raised his hand, saying, "If it's done right."

His response was showered with boos.

At the meeting, several railport opponents brought up Rochelle's apparent desire to have a railport built and asked Union Pacific officials why they did not want to build in the town of 9,000, near the junction of Interstate Highways 39 and 88, about 25 miles west of Maple Park.

Zapler and Payette said Rochelle was not interested in having the railport to serve the Chicago area. Rochelle economic development director Ken Wise said the issue is slightly more complicated than that.

The town is conducting a state and federally funded feasibility study on the possibility of a railport to serve industry in the north-central part of the state. Wise said Union Pacific officials were not interested in discussing that possibility.

"We haven't said `no,' " Wise said. "The railroad said `no' to us. But we're not trying to solve Chicago's problems."

Whether Rochelle is poorly suited to Union Pacific's needs seemed a moot point. When opponents asked railroad officials whether they were considering any other sites at this point, Payette said they were not.

"This is Plan A, and I don't think there is a Plan B," he said.

MINNESOTA: Northwest fires flight attendants

EAGAN -- Northwest Airlines has fired a dozen flight attendants after an alleged sick-out over stalled contract negotiations, the airline confirmed Wednesday, a wire service reported.

Five more resigned after being asked about their work absences during the New Year's holiday. Northwest spokesman Jon Austin confirmed the dismissals and resignations after a flight attendant was fired in a meeting with the company at Minneapolis-St. Paul International Airport.

Austin declined to comment on any of the firings. Northwest's lawyers have characterized a higher-than-normal illness rate among flight attendants around the holidays as "guerrilla warfare" by the attendants, leading it to cancel several hundred flights.

Billie Davenport, president of Teamsters Local 2000, the union representing Northwest's flight attendants, said grievances will be filed to protest the firings. None of the sick calls were false, she said. Davenport said the union will bargain to get them back on the job.

"From what I can tell, they are being discharged because, purely, the company didn't believe them," Davenport said.

Flight attendants from Detroit, New York, Los Angeles and Honolulu were among those fired. Northwest sued the union and some of its members in January, alleging they had violated federal labor laws by orchestrating a sickout. The company has conducted court-authorized searches of the home computers of some flight attendants, looking for evidence that a sickout was organized. The union has argued that the high number of sick calls over New Year's was because of a flu outbreak and fears of flying during the Y2K rollover.

JAPAN: Track, wheels of derailed subway may have been shaved

TOKYO -- The wheels of the last car of a subway train on Tokyo's Hibiya Line that derailed in a deadly accident Wednesday morning and the track it was running on may have been improperly shaved and polished in periodic maintenance, Transport Ministry officials said Thursday, a wire service reported.

The ministry's investigative team has discovered that the track around the site of the accident underwent shaving of its surface about three months ago, while the wheels of the car were polished some five months ago, the officials said.

Insufficient polishing work or too much shaving could have contributed to the accident, in which the car derailed and plowed into several cars of an oncoming train, killing four people and injuring 33 others, they said.

They also found that the flange, or the protrusion on the inner side of a wheel that secures it on the track, on the right wheel of the car that derailed showed traces of having run over the track for about 5 meters before actually jumping the track, the officials said.

According to officials of Teito Rapid Transit Authority (Eidan), which operates the Hibiya Line, workers shaved off 0.2-0.3 millimeter of the surface of the track around the accident site Dec. 18 last year using an automatic shaving machine.

Periodic shaving operations are conducted to remove scratches and dents that develop on the surface of tracks and wheels, according to ministry and Eidan officials.

Metropolitan Police Department (MPD) officials said earlier they had found that the derailed car, believed to have plowed into the fifth and sixth cars of an oncoming train, had also sideswiped the fourth car. The MPD is conducting a joint investigation with the ministry's team.

Police said they are also questioning the trains' operators and subway officials on suspicion of professional negligence resulting in death and bodily injury. The six-member Transport Ministry team also questioned subway officials.

All services on the Hibiya Line were back to normal Thursday, with the day's first train departing on schedule at 5 a.m., some 20 hours after the accident, subway officials said.

GERMANY: Rail Line's cargo unit on track for restructuring

FRANKFURT -- With one of Germany's top freight forwarding executives slated to take control this summer, the rail freight subsidiary of the Deutsche Bahn AbG railroad appears headed for a major restructuring, the Journal of Commerce reported.

The likely changes, according to German newspaper reports, include a plan for the rail freight division -- called DB Cargo -- to focus on profitable routes and to withdraw from one that can be operated more efficiently or profitably by other carriers.

Deutsche Bahn's chairman, Hartmut Mehdorn, has reportedly told associates that DB Cargo is "a classic case for restructuring." He recently tapped Bernd Malmstrom, chairman of Germany's Schenker AG freight forwarder, to take over DB Cargo in July.

Since he took over the troubled Deutsche Bahn three months ago, Mehdorn -- a former president of Germany's largest printing-equipment manufacturer -- has pledged to make the railroad more efficient and more responsive to its cargo customers, many of whom have complained about DB Cargo's past inflexibility.

According to Deutsche Bahn internal documents cited by Munich's leading newspaper (the Sueddeutsche Zeitung), Mehdorn wants to cut about 15,000 of DB Cargo's jobs over the next five years, bringing its work force down to about 25,000 employees.

In addition, railroad executives are examining plans to refocus freight transport on profitable routes, a step that could reduce DB Cargo's freight routes by 25% by 2004.

For routes being abandoned, the railroad would seek cooperative ventures with other transport firms in a position to operate them more efficiently.

A spokesman for DB Cargo declined this week to comment on the report, saying only that "we are orienting ourselves towards our customers and the marketplace, and carrying freight where it makes sense."

Industry observers say that Schenker, which already has a cooperation agreement with DB Cargo, may forge even closer links after Malmstrom takes over DB Cargo's top job, replacing the retiring Eberhard Sinnecker.

DB Cargo took a step toward a new era when it merged with the Dutch rail freight company in January to form a new company called Railion.