Rail Strike Deadline Near
Management cites need to cut labor costs to compete with trucking
UNITED States railroads are chugging into the future with the baggage of the past. The heaviest baggage, observers say, is the industry's archaic labor relations. The nation's freight railroads face an almost certain strike after midnight tonight - in part because labor and management haven't solved decades-long disputes.
"You can almost close your eyes and the scenery is the same," says Walter Licht, a University of Pennsylvania labor historian familiar with the railroads' past. "There are sets of issues that come up again and again."
"This is recurrence of the same thing," says Sud Kumar, director of the railroad engineering laboratory at the Illinois Institute of Technology.
Railroad workers are frustrated by management's continued demand for cuts despite the industry's comeback. Productivity has increased two to three times faster than other transport sectors. Railroads have lowered their rates but increased net revenues to record levels - an average $2.5 billion a year from 1985 to 1989. For the first time in decades, the federal Interstate Commerce Commission found last year that a few carriers were earning an adequate return on investment.
Yet management continues to press for cuts in pay, benefits, and jobs because of competition from trucking.
"They've been singing that song for 40 years," complains Robert Hart, general counsel for the United Transportation Union (UTU). Railworkers' last pay increase was in 1988. Nonunion companies continue to take over small unionized rail lines - an issue no one has resolved.
Management is equally frustrated as it tries to pull an industry into the 21st century with labor arrangements reminiscent of the 19th. Carriers make separate contracts with 11 unions - from the UTU to the International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers.
The contracts are full of work rules so archaic that they have become legendary. It was not until the 1980s that the industry managed to get rid of firemen (although their role had shrunk drastically since the 1950s, when the diesel locomotive replaced the coal-fired train). Even today, a railroad worker gets a full day's pay once a train has gone 108 miles (a distance the average train covers in five hours).
That means an engineer could travel just under 550 miles a week and get a full week's pay. J. B. Hunt, a large trucking firm, advertises that its drivers average 2,450 miles a week.
Management wants to cut the basic train crew from three to two. Overstaffing accounts for 58 percent of the industry's payroll for conductors and brakemen, says Carol Perkins, spokeswoman for the Association of American Railroads. "This negotiation round is very crucial in having the railroads continue to be competitive."
In other industries, severe competition has forged cooperation. In several US auto and steel companies, unions and management have made a basic tradeoff: more job security for more flexible work rules.
Not so in the tradition-bound railroad industry. Labor-management cooperation is nil at the national level. As the final days before the deadline slipped away, both sides predicted a strike. Of the 11 unions bargaining, only three had announced tentative agreements at press time: the Transportation Communications International Union, the Brotherhood of Railroad Signalmen, and the American Train Dispatchers Association.
Details of the settlements weren't made public pending ratification by the unions' rank and file. A key issue for these unions was management's proposed cuts in health-care benefits. Sources on both sides said that the settlements followed the framework of a presidential emergency board.
That board, appointed by President Bush last year, recommended $14,000 in wage increases and lump-sum bonuses over a five-year period. Workers would have to pay at least 15 percent of their health-care premiums and a larger portion of any cost-increases. The typical salary for railroad workers is high - $38,326 a year before health and other fringe benefits.
In December, the average railroad employee earned $15.99 an hour - compared with only $11.85 for truckers, according to the Bureau of Labor Statistics.
Significantly, none of the unions with a tentative settlement would feel much effect from management's productivity plans for train crews. The main union under attack is the UTU. It stands to lose up to a third of its 70,000 members. This walkout will test rail unions' traditional solidarity, since UTU's leaders have strained relations with other rail unions.
The Bush administration has said it will seek emergency action from Congress to avert a walkout if one seems likely. Independent observers suggest that a nationwide rail strike would start to hurt the economy if it lasted a week.
A strike would also hurt railroads, since at least some of their business would go to trucks.