October 4, 2024: The SMART Transportation Division proudly congratulates SMART Railroad, Mechanical and Engineering Division (MD) members for their achievement in ratifying collective bargaining agreements (CBAs) with three major rail carriers: BNSF, CSXT and Norfolk Southern.
The newly ratified agreements will provide SMART-MD members with healthcare stability and annual wage increases through December 31, 2029. The five-year agreements guarantee an average general wage increase of 3.5% per year and include improvements in paid vacation and health and welfare benefits, maintaining a consistent employee monthly cost-share contribution.
John McCloskey, General Committee 2 directing general chairperson, remarked on the significance of these agreements, stating, “GWIs of 18.8% compounded are almost unheard of in the freight industry, especially on a voluntary basis without concessions. I appreciate BNSF, CSX and NS negotiating with SMART-MD in good faith.”
SMART-TD President Jeremy Ferguson told SMART News, “This is a milestone that underscores the strength and determination of SMART members in securing fair labor agreements. Congratulations to our brothers and sisters in the Mechanical Division!”
In a strong show of unity, members voted in favor of the CBAs, with results reflecting significant support: 69% for BNSF, 68% for CSXT, and 62% for Norfolk Southern. This outcome highlights the commitment of SMART-MD’s members to engage in the ratification process and ensure their voices are heard.
SMART-MD Director Peter Kennedy expressed gratitude to the members who participated, stating, “Thank you to the members that took the time to educate themselves about their agreement, and that participated in the ratification process. We are glad to have resolved negotiations with these major freight railroads. The remaining rail carriers need to follow the pattern that has been established by BNSF, CSXT and NS.”
SMART General President Michael Coleman also praised the outcome, noting, “The members have passed their verdict on the agreements with BNSF, CSX-T and NS, with more than 60% voting in favor for each carrier. I am grateful for the determination and advocacy of the SMART-MD negotiating team, and I appreciate the leadership at BNSF, CSX-T and NS for resolving the next round of national negotiations without dragging out the bargaining process for years.”
As we celebrate this victory, the SMART Transportation Division reaffirms its dedication to supporting all SMART divisions in their pursuit of equitable labor agreements. These successful ratifications serve as a powerful reminder that together, we can achieve meaningful progress and secure a better future for all rail industry workers.
The International Association of Sheet Metal, Air, Rail and Transportation (SMART) Railroad, Mechanical and Engineering Department (MD) members employed on BNSF, CSX-T and Norfolk Southern Railway have voted to ratify their respective collective bargaining agreements (CBAs). Members voted in favor of the CBAs by 69% (BNSF), 68% (CSX) and 62% (NS).
With these agreements ratified, SMART-MD members employed by BNSF, CSX-T and NS have secured healthcare stability and annual wage increases through December 31, 2029.
The CBAs on each respective rail carrier are essentially identical, consisting of a five-year term that provides for annual general wage increases (GWI) that average out to 3.5% per year, improvements for paid vacation, as well as improvements to health and welfare benefits without changing the employee monthly cost-share contribution of 15% of the carriers’ monthly payment rate. The CBAs also resulted in the creation of new benefit design for employees that desire to have employee-only coverage under a high deductible health plan at a reduced employee monthly cost-share contribution.
“GWIs of 18.8% compounded are almost unheard of in the freight industry, especially on a voluntary basis without concessions,” said General Committee 2 Directing General Chairperson John McCloskey. “I appreciate BNSF, CSX and NS negotiating with SMART-MD in good faith and allowing us the opportunity to engage with the members throughout the ratification process.”
“Thank you to the members that took the time to educate themselves about their agreement, and that participated in the ratification process. We are glad to have resolved negotiations with these major freight railroads. The remaining rail carriers need to follow the pattern that has been established by BNSF, CSX-T and NS,” added SMART-MD Director Peter Kennedy.
“The members have passed their verdict on the agreements with BNSF, CSX-T and NS, with more than 60% voting in favor for each carrier,” said SMART General President Michael Coleman. “I am grateful for the determination and advocacy of the SMART-MD negotiating team, and I appreciate the leadership at BNSF, CSX-T and NS for resolving the next round of national negotiations without dragging out the bargaining process for years. I am glad these railroads recognized that our members deserve to be compensated fairly with wage increases coming to them in real time, rather than years after the fact.”
I would like to take a moment to address the tentative agreements on certain properties, including CSXT, NS, and BNSF, which are currently out for ratification or will be shortly, which for most will be in lieu of the traditional “national agreement.” Undoubtedly, this scenario is a bit unusual to those of us who have been around for a decade or more, and it is even more unconventional to us as international officers who are usually engaged in national negotiations every three to five years. We are definitely in some uncharted waters here, because we have never seen a tentative agreement come to fruition before our Section 6 notices were even served, or the existing agreement’s moratorium has opened to require negotiations under the Railway Labor Act (RLA).
In the last round of negotiations, we were met with some of the most-contentious circumstances imaginable, due to all the carriers being hell bent on achieving crew consist changes to remove conductors from our through freight trains. Throughout that round of bargaining, not a single rail labor union was able to gain any meaningful traction, as the carriers made it very clear they were not negotiating with anyone until SMART-TD conceded to eliminating a significant portion of the conductor craft. Of course, we never agreed and instead made our case to Presidential Emergency Board 250, which reaffirmed that all crew consist issues were to be handled at the “local level” (i.e., the General Committee of Adjustment level). PEB 250 also gave us the largest pay increase in modern history, along with some very complex work rule changes to include rest days, and the reinstatement of the 15 percent monthly health & welfare contribution requirement.
With the above in mind, and given some of the inquiries we have received at both the national and general committee levels, I am publishing this informational notice for members who may still be curious about certain aspects of these tentative agreements. We hope you will find the following questions and answers helpful and informative.
“Why didn’t we get more than 17.5% general wage increase? It’s not as much as 22%!”
First and foremost, the proposed general wage increases work out to be within $2.00 per day compared to what we received under PEB 250. You heard that correctly, less than $2.00 per day difference. Even though 17.5% is objectively less than 22%, we are compounding upon a higher dollar value today than we were under PEB 250. By July 1, 2029, the base foreman rate of pay will increase by $61.40 per day and the base conductor rate of pay will increase by $55.28 per day. Under the record 22% of PEB 250, our foremen experienced a $63.36 per day increase, and our conductors experienced a $56.53 per day increase. I would also like to add that this proposal is the largest general wage increase negotiated voluntarily without third party intervention, without healthcare cost increases, and without work rule changes!
What are we giving up?
NOTHING! There are no work rule changes or healthcare cost increases included in this proposal.
What about our crew consist agreement(s) that mandate conductors on all trains?
Since there are no work rule changes affecting crew consist, these agreements (if ratified) will secure another five-year period where no changes can even be proposed under Section 6 of the RLA. This is huge! Yes, we have obtained a two-person crew regulation from the Federal Railroad Administration, but we are still very concerned about the possibility of future anti-labor and anti-regulation focused administrations undermining our progress. We are equally concerned with what the Supreme Court has done with their recent Chevron decision, which could also compromise our regulation. Ratifying these agreements now will protect and guarantee the future of our conductors, while providing another 5 years for us to focus on passing a rail safety bill through Congress, which would make two-person crews the literal law of the land.
What else is in this for me?
If you have fewer than 25 years of service, you will be getting your next week(s) of vacation entitlement two years sooner. You will see much needed and commonly requested increases to your dental, orthodontic, and vision benefits, and voluntary male sterilization (vasectomies) will be covered by your medical insurance. Additionally, if you are single, you will have the option to choose a health & welfare plan with a lower monthly contribution requirement of 10%, compared to the 15% we are all currently paying. This voluntary option is worth approximately $100 per month for those who qualify and decide to opt in. For those who opt completely out of coverage, the payment made to you will double, from $100 to $200 per month.
Why are General Chairmen signatory to this agreement and not the SMART-TD International officers?
Leading up to this tentative agreement, there were some informal discussions at the “national” level between some of the involved rail labor unions and the National Carriers Conference Committee (NCCC), which is the umbrella organization that represents approximately 40 railroads who are party to national bargaining.
Disappointingly, but not surprisingly, those discussions were not productive. However, one particular railroad CEO, Joe Hinrichs from CSX, took the bull by the horns and said he would make a deal for most of what had been discussed but rejected by the NCCC. As a result, these agreements now have to be done “on the property” at the individual General Committee level. Interestingly, NS and BNSF management also agreed to the same deals shortly after the CSX. Why? It’s a proposal that should bring labor peace instead of the high-profile confrontations all their shareholders witnessed just a few years ago. Simple as that. No hidden agendas, no waiting for 2+ years, no backpay hanging in the balance, and no nonsense.
Boeing looks like they are getting a 30% pay increase and we should too!
We can certainly all agree that we should always get the highest general wage increases possible, and that is absolutely what we fight for. Fortunately for us, our situation is not comparable to Boeing employees being represented by the IAM. Going back to at least 2014, those Boeing employees have received sub-standard wage increases that have consistently fallen short of our agreements. If they ratify their proposed wage increases, it will essentially bring them up to speed with where SMART-TD members are today. And that is before we factor in the 17.5% general wage increases that have been proposed to you right now. Further, the Boeing proposal does not include back pay, so those employees will never recoup what they have lost during negotiations, which weakens the dollar value of what they are getting compared to what we have enjoyed during that time. Another major nuance when comparing the two is that Boeing employees lost their pension if they had fewer than 20 years of service, which is valued at approximately $5 per hour. By comparison, our pension fund is secured and doing very well at the RRB. Just like the John Deere, UPS, and UAW scenarios we have observed over the past few years, Boeing simply does not compare to us. We cannot fixate on the percentages of another union’s general wage increases without considering their agreements as a whole. Doing so would be a disservice to our members and a failure in our duties to obtain the best possible wages, rules, and healthcare improvements. Nonetheless, social media, anti-labor news outlets, and bad-faith actors who want us to fail continue to attempt to mislead our members with half-truths and misleading statistics.
These tentative agreements are simple and straightforward, and provide substantial wage increases without making concessions in other areas, and without making us fight for 2-3 years just to get what we deserve. Like every agreement in every unionized setting, this may not address or resolve every single issue that is important to every single member, but I am proud to say that this agreement provides significant improvements on many of the key issues that our members tell us about. Of course, we could have demanded everything and refused to meet on middle ground, which would have inevitably led to the same old drawn-out battle and years of delays, likely followed by a binding decision made by outsiders who do not completely understand our industry. We saw that play out in PEB 250, and our members have made it abundantly clear that they do not want a repeat of that situation. We firmly believe that this is a straightforward, no B.S. agreement that delivers another round of damn good wage increases and healthcare improvements, without sacrificing other important areas such as our work rules, crew consist, and benefits.
If you still have questions, I highly encourage you to contact your General Chairperson or this office prior to casting your vote. We are more than willing and able to dispel any rumor or misinformation that is circulating on social media, in the crew room or on anti-union so-called “news” outlets. To find contact information for your General Committee office, the simplest way is to download the SMART Union app on your phone or tablet, or visit our website at www.smart-union.org to register and sign in to the Member Portal. From there, you can find a convenient directory with all the contact information for your elected representatives.
I hope this provides a better understanding of what is on the table — and perhaps most importantly what we don’t have on the table — for you to decide on. When all things are considered, we are confident that a “yes” vote is the right decision for our involved members, and we highly recommend that you do so.
As the SMART Transportation Division’s general chairpersons representing SMART-TD’s BNSF properties, we want to reaffirm our steadfast commitment to our members.
Recently, an article from the World Socialist Website (WSWS) suggested that the general chairpersons from the BNSF General Committees and by extension the union has turned our backs on the fight for two-person freight train crews. Let us be crystal clear: SMART-TD and the leadership of every general committee representing BNSF crews are resolutely dedicated to this cause, and we stand shoulder to shoulder in this ongoing battle for the livelihoods and safety of our members.
To abandon this critical protection, which we have fought so hard to establish, would be simply unacceptable and something that not one of our General Committees would ever consider doing.
In less than two years, our union has accomplished significant milestones for our BNSF members, as well as our colleagues across the majority of Class I railroads. These victories include the introduction of paid sick days — an unprecedented achievement in American railroading — as well as improvements to vacation time and structured work schedules.
Most importantly, we, as your General Committee Chairpersons, continue to advocate fiercely for the requirement of at least two certified rail professionals on every freight train.
Our progress speaks volumes. We fight for our members daily and achieve consistent wins. The narrative presented by the WSWS is not only misleading but aims to undermine the hard-won victories we’ve secured together.
We assume the wording at the core of this confusion comes from the Section 6 Notices as proposed by BNSF. If the socialist website is focused on that verbiage, they don’t have a good understanding of how railroad contract negotiations work. This is not a cloak-and-dagger process with the terms hidden from members’ view.
Every BNSF member is not only given a copy of the Tentative Agreement but encouraged to read it carefully and come to their local and general committee officers with all questions and concerns. At the end of the day, our GCs’ goal is for all members to understand this agreement to the letter and vote up or down based on whether they feel it is the best option for them and the families that depend on them.
To those who might have taken the WSWS’s claims at face value, we urge you to question the source. As we all know from past experiences, when the WSWS starts talking about your Tentative Agreement, it’s as self-serving as when management throws a pizza party! We know a shakedown is coming in the next system bulletin.
These outside agitators claim to understand our struggles, but they are only motivated by clicks and attention, not anything close to a genuine concern for our welfare.
In their own words, the WSWS identifies itself with terms like “Marxist,” “world socialism,” and “revolutionary opposition to capitalism.” Such rhetoric holds little relevance to our day-to-day lives as railroaders, and there is no reason to give their opinions any credence when it comes to our union and the representation of your and your loved ones’ interests.
We assure you that SMART-TD and your General Committees continue to lead the fight against single-person crews. Our mission remains focused on advocating for the safety, rights, and dignity of every member we represent. We will not be deterred by mischaracterizations or misguided claims about our direction.
As we move forward, let us celebrate the progress we’ve made together as a united front and prepare for the challenges that lie ahead. Together, we are stronger! Our commitment to two-person crews is unwavering, and the tentative agreement being voted on DOES NOT GIVE 2PC away!
As your representatives, it is our job and our mission to advocate for you. Our fight for two-person crews is not just a policy issue; it’s about the safety and well-being of our members. We will not rest until every freight train is staffed with the crew it needs to operate safely and effectively.
We are proud to stand with you in this fight and every fight that will come our way in the future.
FORT WORTH, TEXAS – BNSF Railway, one of North America’s leading transportation companies, today announced it has reached tentative, five-year collective bargaining agreements with the SMART-TD railroad union, including the union’s yardmasters (SMART-TD-YDM).
The news marks eight tentative agreements in less than one month’s time, representing more than 15,000 employees and more than 46% of BNSF’s union workforce. The agreements were reached three months before the opening of the next collective bargaining round.
If ratified, the agreements will provide a 3.5% average wage increase per year over the next five years. They will also offer railroaders more vacation earlier in their career and meaningful enhancements to an already robust suite of health care benefits.
“Thank you to our leaders who have worked collaboratively with us to reach these tentative agreements,” said BNSF President & CEO Katie Farmer. “We are proud to be able to give our employees this unprecedented certainty over enhancements to their pay, health care and vacation in advance of the next round. Today’s agreement sets our entire team up for future success in serving our customers while securing jobs for our employees.”
SMART-TD President Jeremy Ferguson stated, “If ratified by SMART-TD members working for BNSF, this tentative agreement (TA) will increase members’ paychecks by a compounded 18.77% over the next five years. It also offers improvements to their quality of life, and H&W benefit enhancements. I’m proud of our team of BNSF General Chairpersons for the work they did on this agreement on behalf of our members.”
SMART-TD general chairpersons said in a joint statement. “We’re looking forward to presenting this agreement to our members, who will review and vote on whether to approve it.”
SMART-TD is the Transportation Division of the International Association of Sheet Metal, Air, Rail and Transportation Workers (SMART).
Following the East Palestine derailment, the Federal Railroad Administration announced they were going to survey the safety culture of all Class I railroads. While one railroad interfered with these investigations, the FRA was able to complete their evaluation of the Burlington Northern and Santa Fe Railroad (BNSF).
Their results, published this week, are both interesting and predictable.
BNSF managers are ignorant of real safety concerns
As shown in this graph, BNSF’s managers had a consistently high opinion of how safe the workplace is that they oversee. The more closely an employee works with an actual train, however, the lower their estimation of how safely the organization runs. Here is the reality check:
BNSF has room to do more for our safety — a lot more
The FRA’s overall findings show that BNSF’s corporate policies may lean into the idea that safety is the company’s highest priority, but that message doesn’t translate into policies by the time it reaches craft employees. Specific areas of concern include:
Clear reporting systems and accountability.
Open and effective communication across the railroad.
Mutual trust between employees and management.
Fair and consistent responses to safety concerns.
Training and resources are available to support safety.
A large part of FRA’s efforts to analyze the safety culture of the country’s largest railroads is based on the responses to interview questions given by employees. As part of the process, random railroaders from T&E, Maintenance of Way, Mechanical, Communications (dispatchers), and, of course, management are interviewed.
The employees operating the trains and the communities they pass through are not as safe as they could be, and railroad managers appear to be blind to this fact. Saying “safety first” on the BNSF website doesn’t result in safer trains. Earning trust, then investing in accountability, communication and training does.
WASHINGTON, D.C. — Five railroads recently requested a special waiver to run their trains free from the oversight of the mandated safety technology Positive Train Control (PTC). The Federal Railroad Administration (FRA) denied their request in part due to union objections.
Greg Hynes, SMART-TD’s national legislative director, explains that “our opposition was grounded in a commitment to protect our members and the public from the risks associated with operating trains without PTC.”
Class I carriers BNSF and Norfolk Southern, and passenger carriers South Florida Regional Transportation Authority, Caltrain, and the New Mexico Rail Runner Express requested the waivers. Railroads often request waivers to critical regulation that protect the communities through which they operate, but that can impact their operating expenses. In this case, the expense of keeping critical safety technology in good working order. Deferring that maintenance is one way they can cut costs.
Waivers such as this one is one strategy the railroads employ to undermine the regulations they perceive as burdensome; despite the positive impacts the rules have on public and worker safety. Freight carriers often prioritize production over safety, as they were trying to increase the speed of trains without the vital safety overlay of PTC.
“The FRA’s denial of this waiver request is a victory for rail safety and underscores the importance of adhering to established safety protocols,” Hynes said.
Jared Cassity, SMART-TD’s Alternate Legislative Director, added, “SMART-TD will continue to be a vigilant watchdog in the FRA’s public comment process. We are dedicated to ensuring that safety regulations are not compromised and that our members work in environments where safety is not negotiable.”
SMART-TD, alongside the Brotherhood of Railway Signalmen (BRS), the AFL-CIO’s Transportation Trades Department (TTD), and the Brotherhood of Locomotive Engineers (BLE), opposed the request.
SMART-TD closely monitors the FRA’s public comment process as part of the union’s unwavering commitment to rail safety. Our members are the most at risk, which is why we continuously advocate for regulations that prioritize the well-being of rail workers, the safety of rail operations, and the communities in which we operate.
The railroads’ waiver was under review through FRA Docket Numbers FRA-2010-0039, FRA-2010-0045, FRA-2010-0051, FRA-2010-0056, and FRA-2010-0060.
SMART-TD is the Transportation Division of the Sheet Metal, Air, Rail and Transportation Workers union. The union is the largest rail union in the United States and represents several operating crafts.
You see headlines celebrating new laws, and receive our union’s messages asking for letters to our elected officials, but how does your advocacy lead to new laws? Here’s how the pieces fit together.
EAST PALESTINE AND THE RAIL SAFETY ACT
After the Feb 3rd, 2023, derailment in East Palestine, Ohio, the Rail Safety Act was introduced in Congress. The act will regulate safety issues like train lengths, blocked crossings, and protect the FRA’s minimum crew size rule.
But federal laws often follow states’ examples. To protect everyone, we begin in each state, each with its own challenges and opportunities.
Here’s how it worked in Colorado.
It took a well-coordinated effort by SMART-TD and many other groups in order to get the Colorado rail safety bill across the finish line.
NEW LAWS TAKE HARD WORK AND OLD FRIENDS
Colorado’s State Legislative Director Carl Smith has lobbied for SMART-TD in the statehouse for years. The first step for Smith and the state legislative board was to draft a new bill. As part of SMART’s national network, he could put a Colorado twist on similar legislation from other states.
Even with the attention brought by East Palestine, Smith knew getting his bill passed would be a challenge. The 2023 legislature was mid-session, with little time left for debate and amendments. He met with the leaders of both the House and Senate to make his case, convincing Senate Majority Leader Dominick Moreno to sponsor the bill.
With Moreno’s support, Smith began refining the bill with industry and other key stakeholders. Creating a law that worked for everyone complicated things. As the clock started to run out on the 2023 session, Moreno recommended that Smith refine it over the summer, then reintroduce the bill.
SMART-TD BUILDS A COALITION
With more time to organize, SLD Smith was able to recruit others to his cause. As a member of the AFL-CIO Colorado Executive Board, Smith negotiated their support. Smith also connected with an old friend, the director of the Blue/Green Alliance, who signed on as an ally. Both organizations would provide invaluable lobbying muscle and research support.
BNSF’S TRAP: DEATH BY COMMITTEE
Over the summer, Smith developed the bill with advice from the Joint Transportation Legislation Review Committee. He learned that bills championed by this group are considered an easy win in the legislature, as members of both houses in the committee essentially preapprove the bills chosen to adopt.
Good news: By the end of summer, the committee had agreed to take up Smith’s rail safety bill.
Bad news: BNSF lobbyists, working behind the scenes, had manipulated the advice given to Smith. Instead of a sure thing, our bill would compete with a dozen other initiatives — things like free bus passes for schoolchildren or funding for repairs for neglected rural highways. The committee would only adopt five bills and BNSF was sure ours wouldn’t make the cut.
SMART-TD MEMBERS TIP THE BALANCE
BNSF underestimated our influence. Smith’s coalition continued lobbying the committee to select our bill, but it needed an extra push. The leader of the group, Rep. Ty Winter (R), represents the district with the largest number of active and retired SMART-TD members in the state. SLD Smith called for support, and our members rose to the occasion. As calls and letters rolled in, Winters realized his voters were paying attention and wanted the new law. He came around.
A LETHAL BNSF DERAILMENT CLOSES A COLORADO INTERSTATE. OUR BILL MOVES FORWARD
President Biden and Colorado Gov. Jared Polis were planning an unrelated speech in Pueblo, Colorado, just as the main road into the town was closed to clean up a BNSF derailment. The accident, with fatal results on the interstate below, reminded all that railroads deserve closer scrutiny.
The derailment happened Oct. 15, 2023. By the 23rd our bill, now known as House Bill 24-1030, had been selected for the 2024 legislative session.
GAME ON: SMITH EXPANDS HIS COALITION
With the AFL-CIO and the Blue/Green Alliance aboard, Smith began to assemble a larger coalition.
Friends from the Coalition of Professional Firefighters, American Federation of Teachers, Colorado Education Association and SMART Sheet Metal Local 9 joined. Smith also made a case to his contacts in Colorado’s powerful community of environmental groups. Conservation Colorado, the Sierra Club, Natural Resources Defense Council, Trout Unlimited and Green Latinos all agreed to back the cause.
While many of these organizations resist efforts to expand oil and coal production or to lay track through Colorado’s pristine wilderness, they are powerful allies in the fight for safer rail operations. They supported SMART-TD’s bill, then spread the word as momentum grew.
THE WHEELS OF GOVERNMENT TURN SLOWLY
H.B. 24-1030 was among the first bills accepted in the 2024 session, and one of the last to make it to Gov. Polis. Along the way Smith helped the bill through multiple hearings, revisions, and delays.
Hostile lobbying from Union Pacific softened the bill, who threatened to sue the state if the bill passed. They claimed that federal rules regarding train length, blocked crossings, trackside detectors and union access to private property conflicted with the bill. Whether UP would win the lawsuit or not, an active lawsuit with the state would take years to resolve. This would prevent the state from negotiating much-needed regional passenger rail with UP, which is a top priority for the Governor’s office.
“While the bill we passed isn’t exactly the bill we started with, the future office of rail safety will be an additional tool to provide a safe workplace for SMART-TD members and a safer community for Colorado citizens. The office will collect valuable data on long trains, trackside detectors, blocked crossings and rail accidents, which we can then use for stronger rail safety legislation in the future.” Smith said.
Colorado is one step closer to responsibly managed freight rail, and the nation is one step closer to the Railway Safety Act. Incremental wins like these, sometimes years in the making, would not be possible without SMART-TD and our members. Our state legislative directors have the tenacity and the connections to get the job done, as Colorado’s win shows.
Each new law results from a similar fight for our members. Our legislators step up wherever railroads choose to put profits above safety, and operating efficiency above respect for the communities where they operate.
Surface Transportation Board Chairman Martin Oberman has seen some rail carriers cut jobs and neglect their infrastructure in pursuit of short-term profit, and he says there’s nothing to like about it.
Oberman spoke last week before the Southeast Association of Rail Shippers’ conference, and the “cult of the operating ratio” (OR) could be rising again with BNSF and Union Pacific cutting workers and a hedge fund looking to seize Norfolk Southern.
“These low OR — which could only be achieved rapidly — as the activists demanded — by cutting payroll — have meant lots of free cash which the Class Is have not been shy about paying out in stock buybacks, dividends, and in BNSF’s case, returns to its owner,” Oberman said. “The total in the last decade or so is over $250 billion — money which was not invested in retaining workers or building new infrastructure to increase a railroad’s reach and serve more customers.”
SMART-TD members and rail workers have been coping with the consequences through job cuts, irresponsibly long trains and inhumane work schedules. For our members, “PSR” stands for “punishing and sadistic railroading.”
Starting in about 2014, more than 45,000 rail workers lost their jobs because of the quest for increased efficiency.
“Railroads are a regulated monopoly. They have a common carrier obligation to the public interest and to the nation’s economy,” Oberman said. “Unlike other businesses, railroad management and owners are not just free to manipulate the business by draining the company’s resources for short-term gain.”
Too often, the pro-free market crowd, overseeing spreadsheets from the comfort of their railroad offices, think that “free market” means “we can run our business however we want and do to workers and the communities we affect whatever we want. We’re here to make money, and they should be happy about it. They’re lucky we’re here.”
That mentality’s brought longer trains, fewer inspections and less emphasis on safety, as much as industry executives and mouthpieces like the Association of American Railroads and Railway Age claim the railroads are working in everyone’s best interests. PSR is only good for everyone who owns stock.
The industry’s shareholders cruised through the initial wave of PSR with fatter wallets and bigger dividends, Oberman noted in his speech. Contrast that with the thousands of workers who were sent home for the last time as service to their former customers suffered.
Investor neglect drew attention of federal regulators, including Oberman’s STB, after a post-COVID national supply chain meltdown. The STB held hearings on carrier performance in 2022 and has kept a close eye on carrier personnel levels since.
So when leaders such as Oberman and Federal Railroad Administrator Amit Bose decide to oversee the industry through a more skeptical lens, along with the workers and the members of the media, those folks in the comfortable offices get less comfortable.
Oberman also expressed his doubts about activist investor group Ancora’s plan to replace Norfolk Southern’s leadership with a who’s who of exploitative executives.
“Several weeks ago, Ancora wrote me a letter. The essence of their message was that they had taken a $1 billion dollar stake in NS in order for it — quote — ‘to become a safer railroad,’ ” Oberman said. “Really? What hedge fund raises $1 billion to promote safety anywhere? The measure of Ancora’s disingenuous pitch to improve safety is that its slide deck completely omits reference to FRA data which shows that, in the last year, NS has been an industry leader in reducing mainline rail accidents and derailments.”
SMART-TD members — the people who do the work — have lived through PSR. Oberman has gone through PSR, as has Bose. It was a failure for workers, shippers and catastrophic for the national supply chain. It’s not wanted by anyone or good for anyone except for those who would reap the most by doing the least.
The watchdogs of the industry — Oberman, Bose and SMART-TD — all recognize this. We do not want to go through it again.
UP and BNSF executives — you’ll need to get to work, because PSR doesn’t.
WASHINGTON, DC – The shop craft unions at Burlington Northern Santa Fe (BNSF) Railway are urgently callinguponthe Federal Railroad Administration (FRA) to initiate unannounced focus inspections on all locomotives and rail cars owned and leased by BNSF Railway, and immediately issue non-compliance orders requiring BNSF to fix all found defects before being permitted to use such equipment, citing concerns over numerous defects that are allegedly being ignored and neglected by BNSF management.
The lettercomes on the heels of BNSF’s recent announcement of over 362 furloughs in the shop craft unions, further exacerbating concerns over safety and maintenance practices. The defects and recent extreme cuts to the workforce pose serious safety risks to railroad operations and personnel.
Many furloughed employees may be forced to accept positions with lower pay and fewer benefits, potentially disrupting their lives and livelihoods.
In a letteraddressed to FRA Administrator Amit Bose, the shop craft unions at BNSF highlighted their ongoing efforts to address safety and maintenance issues within the railroad industry. The letter referenced a meeting held on December 19, 2023, during which the shop craft unions presented evidence of significant workforce reductions within the mechanical departments of Class I freight railroads, including a staggering 41% decrease in employees since 2015.
Reports received by the shop craft unions indicate that BNSF managers that have been under pressure to perform work without an adequate number of workers, may have instructed workers to release locomotives and rail cars for service that have not been adequately inspected or repaired, effectively disregarding federally mandated safety inspections and fabricate of inspection reports, purportedly as part of cost-cutting measures aimed at maximizing shareholder profits.
“BNSF’s actions represent a reckless disregard for the safety and integrity of our nation’s railways,” said the shop craft unions. “BNSF has recently admitted in public filings that they would not be in compliance with federally mandated safety inspections, and we continue to be informed that BNSF has numerous FRA defects on their locomotives and rail cars. There is no shortage of profits for BNSF, and there is no shortage of work to be performed on BNSF equipment. There is simply an obscene shortage of workers and disregard for people at BNSF. By prioritizing cost-cutting over safety, BNSF is placing its employees and the public at risk. In light of these developments, we have urged the FRA to take immediate action to ensure the safety of BNSF operations. Random audits and focus inspections are essential to holding BNSF accountable and preventing further compromises to safety.”
The shop craft unions at BNSF are calling upon the FRA to prioritize the safety of railroad workers and the integrity of railroad operations by promptly conducting inspections of BNSF locomotives and rail cars located at or in transit to all BNSF Locomotive Maintenance Inspection Terminals (LMITs).
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The Shop Craft Unions are, in alphabetical order: The Brotherhood of Railroad Carmen Division, TCU/IAM (BRC), the International Association of Machinists and Aerospace Workers (IAM) , the International Brotherhood of Boilermakers (IBB), the International Brotherhood of Electrical Workers (IBEW), the National Conference of Fireman and Oilers, Local 32BJ/SEIU (NCFO), the International Association of Sheet Metal, Air, Rail and Transportation Workers Mechanical Department (SMART MD), the Transportation Communications Union (TCU) and the Transport Workers Union of America (TWU).
