CLEVELAND, October 15, 2021 — The Transportation Division of the International Association of Sheet Metal, Air, Rail, and Transportation Workers (SMART-TD) and the Brotherhood of Locomotive Engineers and Trainmen (BLET) are jointly taking on Union Pacific Railroad (UP) over a series of unilateral and unlawful actions taken by the carrier recently.
SMART-TD President Jeremy Ferguson and BLET National President Dennis Pierce issued the following joint statement regarding their action:
“Over the past two weeks, the Union Pacific Railroad seems to have forgotten that it is not Walmart. The railroad has unilaterally changed pay provisions for vaccinated employees who experience a breakthrough COVID infection due to workplace exposure. It has ordered all UP employees to report that they are fully vaccinated by December 8th, or risk being medically disqualified from work. And, instead of negotiating with us as the law requires, the Carrier is directly dealing with its employees by offering a ‘financial incentive’ for compliance with its unilateral mandate.
“We generally support our members getting the vaccine. However, we have several objections to UP’s unilateral implementation of their policies mandating them and illegally dealing directly with its represented employees. The members of our Unions — including members who already are vaccinated — are irate over UP’s outrageous conduct.
“We have been in contract negotiations with UP since November of 2019, and federal law absolutely bars railroads from changing rates of pay, rules and working conditions while negotiations are ongoing. Not only is UP in violation of the law, it has explicitly spurned our demands that these matters be bargained. We have filed suit today in the United States District Court for Northern District of Illinois, Eastern Division, in an effort to stop UP’s lawlessness in its tracks.”
The SMART Transportation Division is comprised of approximately 125,000 active and retired members of the former United Transportation Union, who work in a variety of crafts in the transportation industry.
The Brotherhood of Locomotive Engineers and Trainmen represents nearly 57,000 professional locomotive engineers and trainmen throughout the United States. The BLET is the founding member of the Rail Conference, International Brotherhood of Teamsters.
Net Earnings: Decreased to $1.131 billion from $1.338 billion. Revenue: Decreased to $4.602 billion from $5.893 billion. Operating Income: Decreased to $1.73 billion from $2.007 billion. Operating Expenses:Decreased to $2.872 billion from $3.886 billion. Operating Ratio: Improved by 3.7 points to 61.1%.
Net Earnings: Decreased to C$908 million from C$1.25 billion. Earnings Per Share: Diluted earnings per share decreased 59% to C$0.77 from C$1.88 and adjusted diluted EPS decreased 26% to C$1.28 from C$1.73. Revenue: Decreased 19% to C$3.21 billion from C$3.96 billion. Operating Income: Decreased 53% to C$785 million from C$1.27 billion. Operating Expenses: Increased 6% to C$2.42 billion. Operating Ratio: Declined by 18 points to 75.5%; adjusted operating ratio declined 2.9 points to 60.4% from 57.5%.
Net Earnings: Decreased to C$635 million from C$724 million. Earnings Per Share: Diluted earnings per share decreased 10% to $4.66; adjusted diluted earnings per share decreased 5% to $4.30. Revenue: Decreased 9% to C$1.79 billion from C$1.98 billion. Operating Income: Decreased to C$770 million from C$822 million. Operating Expenses: Decreased to C$1.02 billion from C$1.16 billion. Operating Ratio: Improved 140 basis points to 57%.
Net Earnings: Decreased to $499 million from $870 million. Earnings Per Share: Decreased to $0.65 from $1.08. Revenue: Decreased 26% to $2.26 billion from $3.06 billion. Operating Income: Decreased 37% to $828 million from $1.31 billion. Operating Expenses: Decreased 19% to $1.43 billion from $1.76 billion. Operating Ratio: Declined 5.9 points to 63.3%.
Net Earnings: Decreased to $109.7 million from $128.7 million. Earnings Per Share: Decreased to $1.16 per diluted share from $1.28. Revenue: Decreased to $547.9 million from $714 million. Operating Income: Decreased to $180.4 million from $208 million. Operating Expenses: Decreased to $367.5 million from $506 million. Operating Ratio: Improved 3.8 points to 67.1% from 70.9%; adjusted operating ratio worsened 1.5 points to 65.2% from 63.7%.
Net Earnings: Decreased to $392 million from $722 million. Earnings Per Share: Diluted earnings per share decreased to $1.53 from $2.70. Revenue: Decreased 29% to $2.1 billion from $2.9 billion. Operating Income: Decreased to $610 million from $1.1 billion. Operating Expenses: Decreased 21% to $1.5 billion from $1.9 billion. Operating Ratio: Worsened to 70.7% from 63.6%.
Net Earnings: Decreased to $1.13 billion from $1.57 billion. Earnings Per Share: Decreased to $1.67 per diluted share from $2.22 per diluted share. Revenue: Decreased 24% to $4.2 billion from $5.6 billion. Operating Income: Decreased 28% to $1.13 billion from $1.57 billion. Operating Expenses: Decreased 22% to $2.59 billion from $3.34 billion. Operating Ratio: Worsened 1.4 points to 61.0% from 59.6%.
BNSF’s earnings report had not been released as of July 29, 2020. This post will be updated when the information becomes available.
Operating ratio is a railroad’s operating expenses expressed as a percentage of operating revenue, and is considered by economists to be the basic measure of carrier profitability. The lower the operating ratio, the more efficient the railroad.
All comparisons are made to 2019’s second-quarter results for each railroad.
All figures for CN & CP are in Canadian currency, except for earnings per share for CP
Union Pacific has announced that a 50-year-old man that works in UP’s Bailey Yard in North Platte, Neb., has tested positive for COVID-19. The employee and a number of co-workers who came into contact with him are currently quarantined at home.
It’s suspected that the man got the virus while traveling to California and vacationing on a cruise ship. UP reports that the man’s work areas have been disinfected and sanitized.
“It’s unfathomable that rail carriers have not yet implemented all CDC guidelines regarding sanitation and COVID-19 prevention efforts from the outset,” SMART Transportation Division President Jeremy Ferguson said. “We are making every effort during this Federal Railroad Administration-declared emergency to get our membership and rail workers the protections they need.”
NORTH OLMSTED, Ohio — The team negotiating the next National Rail Contract which will affect more than 40,000 SMART Transportation Division members has been finalized by the union’s leadership.
The team will be led by TD President Jeremy Ferguson with the assistance of Vice Presidents Brent Leonard; John J. Whitaker III; Chadrick Adams; Jamie C. Modesitt; Joe M. Lopez and David B. Wier Jr.
Also part of the team are five General Chairpersons, Mike LaPresta (BNSF); Gary Crest (Union Pacific); Roger Crawford (Illinois Central); Thomas Gholson (Norfolk Southern) and Christopher Bartz (yardmasters).
“We are prepared to do whatever it takes to get the most out of this round of national contract talks,” President Ferguson said. “It will be a challenging process and it could be quite contentious at times. However, we on the negotiating team are confident that as we work through the process we can achieve a positive result.”
The opening meeting of negotiations is scheduled for February 26 and 27 in Washington, D.C., with talks occurring in Cleveland, Omaha, Washington, D.C. and Chicago, as the year progresses.
SMART-TD is part of a Coordinated Bargaining Coalition that consists of it and nine other unions representing rail labor. Carriers BNSF, CSX, Kansas City Southern, Canadian National, Norfolk Southern, Soo Line, Union Pacific and numerous smaller railroads are represented by the National Carriers’ Conference Committee (NCCC) during negotiations.
In related news, CSXT will not be part of national bargaining, except for health and welfare issues. For the wages and rules portion, SMART-TD and CSX have agreed to begin bargaining locally on behalf of trainmen starting Jan. 21, 2020.
A joint meeting for the negotiating parties regarding facilitated bargaining is scheduled in Jacksonville, Fla., on January 22 and 23.
Additional meeting dates for these negotiations are currently under discussion, and a tentative schedule will be set in the near future. Neither the SMART-TD nor CSX have exchanged any proposals, and an agenda for the subjects to be discussed during these contract talks, which are separate from the National Rail Contract negotiations, has yet to be finalized.
Class I carrier Union Pacific announced Monday that it has completed implementation of Positive Train Control (PTC) on all federally mandated freight and passenger routes requiring the collision avoidance technology.
The carrier still must achieve full interoperability, that is, its PTC system must be able to successfully interact with those systems used by other carriers.
The carrier reports that 16 of 25 railroads it hosts are compliant, encompassing 85% of Union Pacific’s interoperable PTC train miles, and says that full interoperability in conjunction with the other carriers is expected by mid-2020.
PTC is designed to prevent:
Derailments caused by excessive speed;
Accidents that can occur if trains are routed down the incorrect track;
Unauthorized train movements on tracks undergoing maintenance
From left, Local 1409 Legislative Representative Dan Bonawitz Jr., TD Vice President Brent Leonard, Washington State Legislative Director Herb Krohn, TD President Jeremy Ferguson and Kansas State Legislative Director Ty Dragoo participate in an informational picket on Tuesday, Nov. 5, in Kansas City.
General President Joseph Sellers Jr. and TD President Jeremy Ferguson both participated in a town hall meeting and informational rally in Kansas City on Nov. 4 and 5 to draw attention to Union Pacific’s closure of the Neff Yard that resulted in about 200 lost jobs.
Union Pacific’s version of Precision Scheduled Railroading (PSR) claimed more victims recently.
UP announced last week that it was doing away with its Neff Yard in Kansas City, Mo., and with it 200 well-paying rail jobs evaporate.
The short-term benefits of these and other workforce reductions by carriers in the name of PSR result in a few more bucks for Wall Street shareholders — the end result of PSR for all to see.
Ignored is the long-term damage done to customer service as the carrier tries to adapt to the change it has made to operations, to equipment because of deferred maintenance, to the lives of employees – both those who are left jobless and those who have to work even harder to pick up the slack — and to the economies of communities in which those good-paying rail jobs have vanished.
UP’s not alone. Right around Labor Day at two locations in Pennsylvania and one in Virginia, Norfolk Southern cut nearly 300 jobs. What do the two carriers have in common? They’re both knee-deep in PSR.
SMART TD leadership backs Kansas State Legislative Director Ty Dragoo, who wrote a letter to explain to members of the general public about what the carriers are really doing.
We support the Kansas State Legislative Board’s efforts to preserve jobs in the face of carrier cuts and hope that other members of rail labor follow his lead. SLD Dragoo’s letter is reproduced below. He is not being silent, and we will not be silent.
America’s railroads are going through a round of job cuts. But at what cost? We, the public, are paying for significant Wall Street gains while selling out our communities.
Union Pacific has announced the closure of Neff Yard in Kansas City. Now you get to hold the bag as UP takes the money to the bank.
Kansas State Legislative Director Ty Dragoo
Union Pacific Railroad’s decision this week to abolish 200 positions at Neff Yard follows similar force reductions by the other major freight rail systems across the country.
The cuts aren’t coming because the company is losing money: Union Pacific in July 2019 reported 2019 second-quarter net income of $1.6 billion, or $2.22 per diluted share. This compares to $1.5 billion, or $1.98 per diluted share, in the second quarter of 2018.
“We delivered record second-quarter financial results driven by exceptional operating performance, including an all-time best quarterly operating ratio of 59.6 percent,” said Lance Fritz, Union Pacific chairman.
The cuts aren’t due to burdensome corporate taxes. Union Pacific disclosed in 2017 the estimated impact from the Tax Cuts and Jobs Act in a filing with the Securities and Exchange Commission. That disclosure saw some shocking amounts of money to the tune of $6 billion.
The $5.8 billion benefit comes primarily from the revaluation of UP’s deferred tax liabilities to reflect the new federal corporate tax rate of 21 percent.
Also, UP stated the tax break law would result in a $200 million non-cash reduction to its operating expenses. It is also of note that many states and local communities have subsidized Union Pacific with tax money.
The most-significant financial boost was Union Pacific’s much-lower tax bill for the reporting quarters. Operating income may have increased, which is impressive knowing that workers are responsible for that, but the company’s tax bill since passage has been substantially lower, which has led to a massive increase in net income for the quarters.
Despite taxpayer dollars and tax cuts helping Union Pacific gain more per-share for Wall Street, their way to say “thanks” seems to be, pack up and go. This is leaving behind an economic catastrophe for impacted communities to clean up for themselves. To add insult to injury, the company didn’t even have the decency to warn employees until a few days out.
The cuts are due to insatiable corporate greed. Union Pacific is one of the largest U.S. freight rail operators with annual revenues of more than $20 billion.
While communities struggle with basic needs, education, public utilities, streets, emergency services, food tax rates, sales tax, etc. all at the table for increase when UP wants its cut. You have been paying more while they cut and run. This is a double slap to the face; one we must be vocal about.
These job losses will ripple through the heart of the local economy. Without income and security, workers and families won’t be able to spend on clothes, restaurants, recreation, and much more. Union Pacific isn’t only undermining workers and families, but entire regional economies.
As we stand in solidarity with the Union Pacific workers who are about to lose their livelihoods, we can’t forget that corporate decisions in faraway places leave deep scars in unsuspecting communities. Not only do workers in these communities deserve gratitude, but we must also hold companies who take them for granted accountable. When communities invest in companies, we are investing in jobs.
We kept our promise. Will Union Pacific and other railroads continue to break theirs?
Kansas State Legislative Director — SMART TD
Members in Kansas and Missouri — please take a few moments of your time to tell the elected officials listed below about what you think about the carrier cash grab that is PSR.
As the National Transportation Safety Board continues to investigate an accident in Wyoming that killed two SMART TD members out of Local 446, it issued a pair of safety recommendations to Class I railroads and a recommendation to the American Short Line and Regional Railroad Association regarding train emergency brake communication.
Review and issue guidance as necessary for the inspection of end-of-railcar air hose configurations to ensure the air hose configuration matches the intended design. (R-19-41)
Review and revise your air brake and train handling instructions for grade operations and two-way end-of-train device instructions to include: monitoring locomotive air flow meters, checking the status of communication between the head-of-train and end-of train devices before cresting a grade, and the actions to take if the air pressure at the rear of the train does not respond to an air brake application. (R-19-42)
To the American Short Line and Regional Railroad Association:
Alert your member carriers to (1) inspect the end-of-railcar air hose configurations to ensure the hose configurations match the intended design and (2) review and revise their air brake and train handling instructions for grade operations and two-way end-of-train device instructions to include: monitoring locomotive air flow meters, checking the status of communication between the head-of-train and end-of-train devices before cresting a grade, and the actions to take if the air pressure from the rear of the train does not respond to an air brake application. (R-19-43)
Travis “Bowie” Andrepont, the secretary/treasurer of Local 1947 in Lake Charles, La., was killed before dawn on Tuesday, Aug. 20, in a rail accident in Beaumont, Texas.
Andrepont, 39, of DeQuincy, La., had worked for Union Pacific for 16 years, a UP company spokeswoman told The Associated Press.
Brother Andrepont became a member of SMART Transportation Division in January 2006 and had been the local’s S&T since January 2018. A conductor, he also was secretary of LCA 577 (sUnion Pacific-MP).
“His love for his wife and his children, surpassed everything else,” his obituary read.
He is survived by the love of his life, Paiton Andrepont; one son, Riley; two daughters, Shiloh and Amelia; his mother, Lesa Russell and step father, J. Russell; grandparents, Walton and Dellie Baggett and Audrey Andrepont, all of DeQuincy; one brother, Brian Andrepont of Houston; two sisters, Dawn Lewis and husband David of DeRidder, and Ashley Broussard and husband Jason of Lake Charles.
In the carrier’s quarterly earnings call April 18, Union Pacific Chief Operating Officer Jim Vena said that more cuts are being weighed as UP quests for a 61% operating ratio and continues its move toward Precision Scheduled Railroading (PSR).
During the call, the carrier also announced a “pause” in the construction of its $550 million Brazos Yard project in Robertson County, Texas, as UP reallocated funds to improve its El Paso, Texas-to-Loa Angeles line.
Vena said there would be more “rationalization” of the carrier’s network and terminals in order to increase train speed and that future hump yard closures are in the planning stages, according to the Supply Chain Dive news website.
UP is a third of the way through its “Unified 2020” plan to implement PSR, Supply Chain Dive’s Emma Cosgrove reported.
Certain Union Pacific (UP) workers who were employed by the carrier from 1991 to 2017 might get some money back in their pockets thanks to a ruling made in the United States Court of Appeals for the Eighth Circuit.
If they meet certain criteria and were taxed on particular stock options or ratification bonuses, current and former UP workers will receive a refund after the appeals court sided with UP in the summer of 2017 and reversed a district court’s ruling in a fight over taxes with the Internal Revenue Service (IRS).
At the heart of the matter was whether stock options or ratification bonuses received by UP workers should have been treated as taxable income under the Railroad Retirement Tax Act. The IRS argued successfully in district court that this was the case and received a summary judgment of about $75 million in taxes owed by the carrier. However, UP appealed the decision, and the appeals court reversed the district court’s ruling.
In June 2018, the U.S. Supreme Court denied a petition by the IRS to hear the case, settling the matter in favor of UP and paving the way for the potential payouts.
In order to determine their eligibility for a refund, people who were employed by UP from 1991 to 2017 must file a consent form by visiting www.unionpacifictaxrefund.com. The consent form must be turned in by a March 12, 2019, deadline in order to receive a refund, which is scheduled to be disbursed between June and August 2019.