SMART UnionShortline holding company Watco is seeking regulatory approval to acquire 43.6 miles of track from Norfolk Southern in Alabama between Maplesville and Autauga Creek, and 10.1 miles of track between Autauga Creek and Montgomery for creation of a new shortline railroad.
The new shortline would be named Autauga Northern Railroad.
Watco currently controls 22 shortline railroads in 18 states.
How did major railroads perform in 2010?
Reviewing their calendar-year and fourth-quarter profit statements, one wouldn’t know they were operating in the midst of a nationwide recession.
Profits soared, stock dividends were raised and operating ratios improved. (Operating ratio — a railroad’s operating expenses expressed as a percentage of operating revenue — is considered by economists to be the basic measure of carrier profitability.)
Wall Street analyst Ed Wolfe reports the level of freight car and intermodal loadings for the year registered “the best” year-over-year growth in more than 50 years.
Wolfe and other analysts also point to the railroads’ pricing strength — the ability to raise rates on shippers with limited effective alternatives to railroad transportation. Many long-term contracts for hauling coal are expiring, and substantial rate increases on that traffic already are reflected in new contracts.
Indeed, railroad CEOs are predicting another strongly profitable year in 2011, which was reflected in year-end railroad stock prices, which were flirting with record highs.
Following are profit reports from the major railroads:
Canadian National:
Canadian Pacific:
CSX:
Kansas City Southern:
Norfolk Southern:
Union Pacific:
BNSF:
As BNSF is now privately held, it no longer reports detailed financial data.
WASHINGTON — The Supreme Court will hear an argument by CSX in 2011 challenging standards for rail workers bringing lawsuits under the Federal Employers’ Liability Act (FELA), reports Bloomberg.
The decision could affect future FELA cases.
The specific case to be heard, reports Bloomberg, involves a CSX engineer who won a $184,250 FELA award for a hand injury suffered while on duty.
Said Bloomberg, “The case centers on the test for determining whether a railroad’s negligence was the cause of an employee’s injury.”
The federal judge hearing that case, reports Bloomberg, told the jury “that the railroad was responsible for negligence if its negligence ‘played a part — no matter how small — in bringing about the injury.'”
CSX, according to Bloomberg, contends that injured rail workers should meet a more demanding standard, as is required in other types of personal-injury lawsuits not covered by the FELA, which applies only to railroads and their workers.
The more demanding standard would require the employer’s action to be the “primary cause” of the injury, known as “proximate cause” in legal jargon.
By UTU International President Mike Futhey
The recent tragic, senseless and violent murder in New Orleans of CSX conductor Fred Gibbs, and wounding of the train’s engineer (a potential witness whose name is being withheld), accelerates an already urgent need for better workplace safety and security measures for rail, transit and motor coach facilities and operations.
Gibbs and the engineer were shot by a lone gunman (a suspect is in police custody) inside the cab of their intermodal train parked on a dark and isolated stretch of track as it awaited dispatcher clearance to enter a yard in New Orleans. The motive appears to have been robbery of the crew, but the train could have contained a cargo of chlorine gas or other deadly hazmat, and the shooter could have been a terrorist or delusional individual with knowledge of locomotive operations.
Indeed, prior to 9/11, few, if any, envisioned terrorists capable of hijacking and piloting multiple sophisticated passenger aircraft and flying them into high-profile targets; or of terrorists in Madrid, Spain, who coordinated four separate rush-hour bombings aboard packed commuter trains in March 2004.
Many of our members noted immediately after the New Orleans shooting that federal regulations do not require bullet-proof glass in locomotives, tamper-proof and functioning locomotive door locks, “keyed” or electronic safeguards that limit locomotive operation to licensed train and engine workers, or train scheduling and dispatching that restricts the stopping of trains to well-lighted and protected areas.
Certainly these are logical responses to the New Orleans shooting.
But without more expert study and collaboration among experts at the Federal Railroad Administration, Federal Transit Administration, Federal Motor Carrier Safety Administration, Transportation Security Administration, the National Transportation Safety Board, law enforcement agencies, carriers and labor organizations representing rail, transit and bus employees, we could be overlooking other effective safeguards.
Transportation labor long has been ahead of the curve in calling for greater collaboration among stakeholders, which includes front-line employee training to recognize threats and learn how best to report concerns to dispatchers and law enforcement.
In fact, Amtrak and the UTU recently agreed to a joint project that, in cooperation with the Transportation Security Administration, directs almost $300,000 in federal funding to the UTU to devise and implement a training program for conductors, assistant conductors, engineers, on-board service personnel and yard employees to enhance their abilities to recognize behavioral traits of individuals intending to engage in terrorist-like activity.
The UTU is now reaching out to build on this program to effectuate workplace safety as it pertains to terrorist and delusional activities.
We are seeking collaboration among other concerned labor organizations, federal safety and homeland security agencies, and carriers to create an incubator for effective ideas on a comprehensive security action plan, including employee training, that can be presented to Congress for fast-track federal funding.
We are heartened by word from CSX that it has begun a cooperative security venture with other carriers and law enforcement agencies to increase security around interchanges and loops in New Orleans.
The potential threat, however, is nationwide; and as train and engine employees, and bus drivers, are constantly in the cross-hairs of danger as well as being the eyes and ears best and first able to recognize threats, it is essential that transportation labor organizations be an integral part of any effort to improve rail, transit and bus security.
Historically, transportation labor and the carriers have been most successful in achieving policy goals when they act in concert. Where carriers or labor act separately — and often at odds with each other — success often is elusive or falls short of goals.
For any action plan to be effective, all parties with accountability and responsibility must collaborate in the creation and implementation of that plan.
We will be reporting more on this effort in the near future.
By Assistant President Arty Martin and
GS&T Kim Thompson
Among the most difficult challenges facing us in 2009 arrives in November, when we exchange Railway Labor Act Section 6 notices with the carriers — the list of each side’s demands for the next collective bargaining round.
Our national rail contract is open for renewal on Jan. 1, 2010, and this upcoming bargaining round will be among our toughest ever given the deteriorating state of the national economy, the advance of technology and Wall Street pressure on railroads to deliver increased profits.
While the national rail contract affects members on only BNSF, CSX, Kansas City Southern, Norfolk Southern and Union Pacific, these national contracts tend to be a trend setter for bargaining on other freight railroads and Amtrak, and are frequently referred to by commuter railroads.
A reasonable individual might have good reason to assume the upcoming bargaining round will be favorable to employees. After all, railroads are among today’s few solidly profitable industries in America, and Wall Street confirms they have unprecedented pricing power. Moreover, the carriers continue to improve productivity, and it is the workers — especially operating craft employees — who are most responsible.
Indeed, the railroads’ own figures, as published by the Association of American Railroads, show that revenue ton-miles per employee — the best benchmark for measuring productivity — has soared five-fold since 1980, from 2.1 million revenue ton-miles per employee to almost 11 million revenue ton-miles per employee today.
Accordingly, the railroads’ labor costs have declined by 43 percent — from 46.5 cents of every revenue dollar in 1980, to 26.4 cents of every revenue dollar today.
This is because the employee headcount has dropped from 532,000 in 1980 to 236,000 today — a 56 percent decline in workers, while productivity has soared. Among train and engine service employees, the head count fell from almost 136,000 in 1980 to fewer than 70,000 train and engine service employees today.
Unfortunately, none of this matters to the carriers at the bargaining table, because it is hot Wall Street dollars that set the tone of carrier Section 6 notices.
Perhaps you have noticed Wall Street investment funds have been buying up shares of the major railroads.
BNSF, for example, is 46 percent owned by Wall Street investment funds. At CSX, the figure is 35 percent; at Union Pacific, 34 percent; at Kansas City Southern, 33 percent; and at Norfolk Southern, 32 percent, according to Bloomberg News.
These investment funds, some of them based in foreign countries, have a narrow focus of increasing stock price and increasing dividend payouts — often without concern to an appropriate level of railroad maintenance, and certainly without concern for employees and their families.
For sure, investment funds are behind the anti-labor policies at Wal-Mart and policies that export good American jobs overseas.
What a labor union does is to fight back — and the UTU will be spending the months leading up to the exchange of Section 6 notices by building our case on behalf of our members.
Who Owns the Railroads
| BNSF | |
| Berkshire Hathaway | 21.8% |
Capital Research Global | 5.6% |
Barclays Global | 3.3% |
UBS Global | 3.0% |
Vanguard Group | 2.8% |
State Street Corp. | 2.7% |
Fidelity Mgt. | 2.4% |
Capital World Invest. | 1.7% |
JP Morgan Chase | 1.2% |
Barrow, Hanley | 1.2% |
Total | 45.7% |
CSX | |
Citigroup | 5.4% |
Barclays Global | 4.7% |
Children’s Invest. Fund | 4.5% |
3G Capital | 4.4% |
Deutsche Bank | 4.2% |
| State Street Corp. | 3.6% |
Vanguard Group | 3.2% |
Tiger Global | 1.9% |
Bank of N.Y. | 1.6% |
| JP Morgan Chase | 1.3% |
Total | 34.8% |
KCS | |
Neuberger Berman | 6.2% |
Wellington Mgt. | 5.7% |
Marathon Asset Mgt. | 4.1% |
| Barclays Global | 3.6% |
Vanguard Group | 3.0% |
| Keeley Asset Mgt. | 2.8% |
Bank of America | 2.4% |
| Prudential | 1.9% |
Munder Capital Mgt. | 1.9% |
AXA | 1.8% |
| Total | 33.4% |
| Norfolk Southern | |
Capital Research Global | 5.0% |
Marsico Capital Mgt. | 4.8% |
JP Morgan Chase | 4.7% |
Barclays Global | 4.5% |
State Street Corp. | 3.2% |
Vanguard Group | 3.1% |
Fidelity Mgt. | 2.7% |
Pioneer Investment | 1.3% |
Dimensional Fund | 1.3% |
Capital World Invest. | 1.1% |
Total | 31.7% |
Union Pacific | |
Marsico Capital Mgt. | 6.6% |
Children’s Invest. Fund | 4.7% |
Barclays Global | 4.4% |
Capital World Invest. | 3.4% |
State Street Corp. | 3.2% |
Vanguard Group | 3.0% |
AXA | 2.9% |
Fidelity Mgt. | 2.5% |
Bank of America | 1.9% |
Berkshire Hathaway | 1.8% |
Total | 34.4% |
Source: Bloomberg News
Brothers and Sisters:
We know our rail members employed by BNSF, CSX, KCS, NS and UP are anxious about the status of talks with the National Carriers’ Conference Committee (NCCC).
The talks resume Jan. 22 in Jacksonville, Fla.
It has been a year since the UTU and the NCCC held negotiations; and, in the interim, other organizations did reach a new agreement with the carriers.
Our talks stalled, in part, over the matter of entry-level pay tied to training (which was the subject of a side-letter in the previous round of negotiations).
The talks are under the control of the National Mediation Board, and this session in Jacksonville will be the first with President Futhey leading the negotiating team.
There are some changes in the negotiating team owing to retirements and election-related departures. Assistant President Martin has been added to the team, having been on the team that negotiated in two previous rounds.
We do not anticipate we will be returning to square one with the carriers, as there was progress in previous sessions even though a tentative agreement was not forged.
We can say this in advance of the Jan. 22 resumption of negotiations: The UTU negotiating team will encourage a new and progressive attitude by both sides.
As you know, successful negotiations cannot and do not occur in public, but every UTU member affected should be assured that the UTU negotiating team recognizes the issues near and dear to our members, and your negotiating team intends to forge a tentative agreement that can and will be ratified by the membership.
We will provide an update on progress as soon as we are able.
Meanwhile, we have made significant progress in updating International vice president assignments, with the majority of requests for assistance from general committees — some extending back to mid-October — having been made.
Also, assignments for UTU representation on various FRA safety-related committees, as well as National Transportation Safety Board incident and accident committees, are in the process of being updated.
During the past week in Cleveland, we met with the dedicated and loyal International headquarters staff and assured them that this administration is sensitive to their concerns as we embrace change. We emphasized that we are all members of working families, and that working families survive and prosper by standing together and working together.
Additionally, we are working with staff of the UTUIA to ensure that the insurance needs and concerns of active and retired UTUIA policy holders are serviced properly and in a timely manner.
Another area receiving our attention is the Discipline Income Protection Plan (DIPP). The carriers have been accelerating the imposition of discipline and dismissal of UTU members. While we have made some changes to ensure the continuation of the DIPP, the accelerated discipline and dismissal of employees by the carriers requires a complete review of the DIPP.
It is essential to emphasize that while other job benefit plans are looking for ways to AVOID paying claims, the UTU’s DIPP has remained steadfast in looking for ways to pay claims of participants. We intend to shore up this plan and continue to provide the peace of mind expected by members and their families who participate in the DIPP.
With regard to the SMART merger, recall it is on hold through a federal-court temporary restraining order. A status telephone conference call with the judge, involving all parties to the case, is scheduled for Feb. 1, and a court-hearing is scheduled for Feb. 8 and 9. We shall be reporting more on this issue as events warrant.
Finally, we have scheduled a meeting with all International officers, general chairpersons and state legislative directors in New Orleans for the end of January.
On Jan. 29, which is a meeting for International officers only, we shall fulfill a campaign promise to provide training and education in available computer software related to their jobs, as well as work-related resources available to them.
On Jan. 30, International officers, general chairpersons and state legislative directors will be provided a review of the union’s financial condition. Also, at the Jan. 30 meeting, there will be a discussion of various issues facing the International, its officers and membership.
General chairpersons and state legislative directors should attend the Jan. 30 meeting only.
In solidarity,
Mike Futhey, International President
Arty Martin, Assistant President
Kim Thompson, General Secretary & Treasurer