Employees make bid to buy Conrail
Conrail's employees have offered through their 16 unions to buy the huge government-owned freight carrier. Fred A. Hardin, chairman of the unions' Railway Labor Executives' Association , announcing the offer Tuesday, said that it is ''the best deal in town - if not the only one on the table now.'' Put together over a period of months, the offer includes a cash payment of $500 million and other considerations valued by the unions at about $1.5 billion.
Transportation Department officials say they will give every consideration to the offer. Although there has been no definite offer for Conrail as a whole, many railroads have expressed interest in buying some of its lines.
With the unions' offer on the table, the Transportation Department officials say they expect other offers. Under the 1981 Northeast Rail Services Act, the government was ordered to divest itself of Conrail by 1984.
If the Reagan administration accepts the proposal and it is approved by Congress, the purchase would lead to the biggest denationalization of government-owned assets ever and the largest employee buy-out of an employer to save threatened jobs.
The government is apparently wary of selling to employees, fearing ''efforts to try to save everyone's job rather than to make the carrier competitive.'' A spokesman adds, ''This is a rather large project to take into social experimentation.''
The unions say they do not intend to do that, but will turn Conrail over to ''the best available professional management'' if they take it over. They hope to sell 20 percent to 30 percent of new Conrail stock to the public while retaining the remainder.
Mr. Hardin has made it clear that workers will not commit themselves to wage and benefits concessions or to surrender back-wage claims if Conrail is sold to anyone else.
Conrail - the Consolidated Rail Corporation - is a 17,000-mile system carrying freight in 17 states in the Northeast and Midwest. It was formed in 1976 from remnants of the Penn Central and five other bankrupt railroads. About one-third of all US freight traffic originates or terminates on its lines.
Since the takeover, Conrail has cost the government about $7 billion. The market for Conrail is considered bullish now. The government has rebuilt tracks and yards and replaced old equipment. It now has assets worth up to $5.5 billion as well as the $1.2 billion in tax credits that the unions would surrender.
The freight carrier began making small profits in 1981 and expects earnings of about $130 million this year. Conrail's passenger service was turned over to state and local operators at the beginning of 1983.