Inside This Issue
· Emergency Exit: Presidential Board to Help Resolve Labor Clash
· Corrections to the Objections: CP Submits Lengthy Defense of its Merger
· State of the Freight: An Update from FTR
· Greenbrier’s Buyers: The Latest on the Railcar Market
· Looking Back: Canadian Pacific’s 2018 Investor Day
Track Talk
“I would also cite the fact that due to the PSR scheme, worker productivity is running at such a high level that it is literally about to snap like an overstretched cable or chain.”
-Jeremy Ferguson, president of the SMART-TD union
The Latest
· No surprises here: On Friday (July 15th), President Biden issued an executive order establishing an emergency board to address the stalled contract negotiations between U.S. railroads and their unions. More formally, it will “investigate disputes between certain railroads represented by the National Carriers’ Conference Committee of the National Railway Labor Conference and their employees represented by certain labor organizations.” Starting Monday, the new board—composed of a chair and two other members—will begin studying the matter in hopes of recommending a settlement all sides can live with. The board has up to 30 days to conduct its work, and no strikes or lockouts are permitted during that time. Recommendations aren’t binding, but neither side likely wants the dispute to go to Congress, where there’s no appetite for another major economic disruption. A strike thus remains highly improbable.
· Jeremy Ferguson, president of the SMART-TD union, did say—just before news of the emergency board—that his members are fully prepared to strike if that’s what it takes to get a fair contract. But “we strongly believe that a Presidential Emergency Board will help us to garner that without the necessity of a strike.” Fergusson criticized the railroads on many fronts, from not proposing a fair wage increase to running “ridiculously long trains.” A message to his members featured a hearty dose of PSR bashing—and even a bit of profanity: “The truth is the three biggest railroads at the negotiating table don’t want to part with ANY of their record profits, nor do they wish to reward the workers who have busted their asses for the last three years without a raise.”
· The tense but seemingly resolvable labor tensions persist as second quarter earnings season gets underway. CSX will report on Wednesday, followed by Union Pacific on Thursday. Norfolk Southern and the two Canadian Class I’s will go next week.
The CP-KCS Merger
· Canadian Pacific and Kansas City Southern defended their proposed merger in a giant STB filing that exceeded 4,000 pages. It addressed—in great detail—all criticisms and requests for concessions emanating mostly from its Class I rivals. The merging railroads argued, for example, that KCS has not used its control of Mexican
Keep reading with a 7-day free trial
Subscribe to Railroad Weekly to keep reading this post and get 7 days of free access to the full post archives.