ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Thursday, October 31, 1996 TAG: 9610310011
SECTION: BUSINESS PAGE: B6 EDITION: METRO
SOURCE: GREG EDWARDS STAFF WRITER
Railroad union chiefs agreed Wednesday to stand unified on any sale or merger of Conrail involving either CSX Corp. or Norfolk Southern Corp.
For the first time, rail union leaders have agreed that any discussions they have with the companies involved in a merger will be done collectively, said Edward Wytkind, executive director of the AFL-CIO's Transportation Trades Department.
AFL-CIO President John Sweeney announced that the labor unions agreed to analyze as quickly as possible Norfolk Southern's and CSX's competing bids for Conrail before taking a position on either one, Wytkind said. The unions will try to understand what a merger will mean to employees and their communities, he said.
Rail union leaders reached the agreement during a meeting in Washington led by AFL-CIO Secretary-Treasurer Richard Trumka. Trumka stressed the importance of the unions standing together on major issues, Wytkind said.
Trumka said the unions will be looking at the impact of a merger "on employees, competition, shippers, communities and the financial health of the railroad industry."
On Oct. 23, NS said it was offering $9.1billion, or $100 in cash for each outstanding share of Conrail's common stock and preferred shares in a Conrail employee stock ownership plan. The offer pitted NS, based in Norfolk, against Richmond-based CSX, which announced at mid-month that it had reached an agreement to buy Conrail for a combination of cash and CSX stock in a deal worth more than $8 billion.
Both railroads are interested in Conrail for the access it would provide to lucrative Northeast markets, where Conrail is the dominant railroad. A merger with Conrail also would enable the winner to offer better service to shippers of freight between the Northeast and South.
The unions have not decided to oppose or support the merger, BMWE President Mack Fleming said following Wednesday's meeting. "We don't feel like there's enough information," he said, adding that it's not even certain that a merger will happen.
The unions are concerned about any potential job losses, Fleming said. Railroads typically underestimate the impact of mergers on workers in their applications to regulatory agencies for approval, Wytkind added.
The unions could oppose a merger altogether, Wytkind said. But the options are plentiful, he said.
In the merger of Union Pacific and Southern Pacific, the Brotherhood of Locomotive Engineers has been able to negotiate financial protection aggressively for its members who faced the loss of their jobs or unreasonable relocations, spokesman Steven Fitzgerald said. Management and supervisory workers, however, have been the most affected by recent mergers, he said.
"The writing is certainly on the wall for some employees at this point" in a Conrail merger, Fitzgerald said. It's too early to tell, he said, how engineers will be affected.
When he announced Norfolk Southern's hostile bid for control of Conrail, NS Chairman David Goode said combining NS and Conrail would create a more balanced and competitive Eastern rail system than would a merger of Conrail and CSX. NS is committed to working with customers and public officials to enhance competition, he told securities analysts.
Goode sent a letter to shippers Wednesday re-stating Norfolk Southern's commitment to balanced competition and said it would structure its proposed merger with Conrail to improve competition.
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