Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, July 30, 1995 TAG: 9507280043
SECTION: BUSINESS PAGE: G-1 EDITION: METRO RAILROADS
SOURCE:
DATELINE: LENGTH: Long
Both labor and management say they want to avoid a repeat of the last round of contract negotiations, which dragged over three years and ended in 1992 only after President Bush and Congress intervened.
There have been instances when negotiations have been completed in less than a year. So it can be done, said Frank Wilner, a spokesman for the Association of American Railroads. Neither side wants to get involved in the "crap shoot" of government intervention, he said.
The issues this year are familiar. The railroads - which won some reductions in the size of train crews and changes in the workday the last time around - want to cut their labor costs still more and modify union work rules so the companies will have more operational flexibility.
The unions, from their side of the tracks, want to protect existing benefits and obtain pay raises and new benefits. They say their members should share in the renewed prosperity of the railroads, whose cost-cutting and attention to customer service in recent years has begun to pay off on the bottom line.
Under the Railway Labor Act - the federal law that governs labor-management relations - railroad labor contracts never really expire, they just periodically come up for renewal. The latest contracts were open to renegotiation Jan. 1; two months before that, both the railroads and the unions were permitted to give each other notice about their demands.
An industry bargaining group, the National Railway Labor Conference of Washington, D.C., says 35 railroads, including seven of the nation's major railroads, are negotiating new contracts with 13 major unions this year. The national negotiations represent 85 percent of the U.S. rail industry, or 190,000 union workers.
More than 100 negotiating sessions have already been held, said Joanna Moorhead, a spokeswoman for the industry group.
The railroads acknowledge they had their best year since 1981 last year, when they moved 38 percent of the nation's intercity freight. The Staggers Rail Act, which deregulated the railroads in 1980, gave the industry a big boost, but the railroads are still not as profitable as they should be to ensure their long-term survival, the industry group says.
The industry's freight rates, adjusted for inflation, have fallen 40 percent since 1980. While the rail industry's rate of return on investment as a whole climbed to more than 8 percent last year, the railroads say that only three of the biggest companies among them earned the 12.2 percent cost of capital needed for their long-term survival.
In their pre-bargaining notices, the railroads said they want employees to assume a greater share of their health care premiums and find more effective ways to control medical costs, including requiring managed care.
The railroads provide their employees with one of the most generous health care plans in U.S. industry, Moorhead said. In the past, railroads have paid 100 percent of their workers' insurance premiums. This year, for the first time, workers paid $86.10 toward family coverage, but the railroads paid the remaining $5,841.96 per worker annually, or 98.5 percent of the cost of coverage, the industry group said.
As far as pay is concerned, the railroads are not asking for any wage concessions, Moorhead said. Instead, they're offering a wage increase, she said, but "certainly not" in the range of 7 percent for each year of the contract plus cost-of-living adjustments that some unions have suggested.
The railroads originally had asked for a change in the definition of the workday for train crews, which would have amounted to a pay cut. The railroads reportedly have backed off from that demand, but that can't be confirmed because neither side will discuss details of the talks publicly.
Under the current contract, a crew is considered to have worked one day when a train travels 130 miles, up from 108 miles under the last contract. Because workdays are defined by mileage, crews on today's faster trains can earn two or more days pay in a single day. The railroads, consequently, want to increase the workday to 160 miles.
The railroads say their employees are among the top 2 percent of U.S. wage earners. Workers on the major freight railroads earned an average of $58,000 in wages and benefits in 1993, according to the Association for American Railroads, but that average also includes management salaries. The average for wages alone ranges from roughly $36,500 for maintenance workers to $67,045 for executives, with train and engine crew members averaging $55,584, the association said.
Despite those impressive figures, Steve Fitzgerald, a spokesman for the Brotherhood of Locomotive Engineers, said railroad workers' compensation has not kept pace with inflation.
Management's compensation makes the best case for engineers to get a reasonable raise and other improvements, Fitzgerald said, referring specifically to NS Chairman David Goode, who made $1.3 million last year.
"Engineers and other railroad employees see shareholders getting theirs and management definitely taking their share," Fitzgerald said. "The unions are not getting it; they're looking for something fair."
The unions bargain as a unit with the railroads on health and welfare issues, but each union negotiates individually on job and wage issues. In general, negotiations are conducted on an industrywide basis; but this year, some of the unions have asked for negotiations with individual railroads. Railroads are balking at the notion.
National bargaining, which has been the norm for six decades, helps both sides reach contract agreements without commerce-crippling strikes, the Railway Labor Conference said. "Negotiating on a purely local basis would create a logistical nightmare ... overwhelming the parties," the industry group said.
NS has gone to court to force national negotiations with the Brotherhood of Locomotive Engineers and the Brotherhood of Maintenance of Way Employees, both of which are seeking to negotiate with NS individually. It's not efficient to negotiate with the unions on a local basis, said Bob Spenski, NS vice president of labor relations.
Fitzgerald of the Engineers Union pointed out that federal law allows workers to pick the bargaining representatives of their own choosing, including local officials.
The unions want local bargaining because national bargaining can work against them, both sides say. When bargaining is conducted on a national basis, the unions essentially lose the strike as a bargaining tool. When a national strike is called, it has such a widespread impact on the economy that a national emergency is quickly called and the government intervenes, sometimes imposing a settlement.
In the last 20 years, only six days have been lost because of strikes in disputes handled nationally, while 200 days were lost through bargaining at individual railroads, the Railway Labor Conference said.
However, some of the nation's major railroads, such as Illinois Central and Southern Pacific, have chosen to bargain individually with the unions this year.
Ann Thoma, a spokeswoman for Illinois Central, said her railroad believes it can get a better settlement locally than with a "one-size-fits-all" national contract. Illinois Central, which bargained nationally in the past, began talking to its unions in 1993 and already has ratified agreements with eight of 11 unions, she said.
Among the local issues her railroad was able to address was the establishment of a 401(k) retirement savings plan for workers and increasing job security in exchange for certain work-rule concessions from the unions, she said. Her railroad is not saying, however, that what works for it will work for the industry as a whole, she said.
Wilner of the Association of American Railroads said job security is at issue in the national talks, too. "That's what this round of contract [talks] is all about." It has to do with staying competitive with truckers who employ nonunion labor and are subsidized through the public highway system, he said.
by CNB