DATE: Saturday, March 15, 1997              TAG: 9703150312

SECTION: BUSINESS                PAGE: D1   EDITION: FINAL 

SOURCE: BY CHRISTOPHER DINSMORE, STAFF WRITER 
                                            LENGTH:  107 lines

RAILROAD MERGER: UNION PREDICTS JOB LOSSES

While CSX and Norfolk Southern may have agreed to split Conrail, the question remains: How will they do it?

Conrail's 23,000 employees have a tremendous stake in the division. Some will go with CSX and some with Norfolk Southern, but many will likely lose their jobs and that concerns the rail unions.

The extent of job losses, particularly among Conrail's unionized work force, could determine how much opposition the railroads face from the unions when they seek federal approval of their plan.

About 85 percent of the Philadelphia-based railroad's workers are represented by the 13 major railroad unions.

Conrail Inc. conceded to a breakup of its 11,000-mile system last week, giving up on a merger with CSX Corp. under pressure from Norfolk Southern Corp., federal regulators and shippers.

The unions are understandably concerned. Since just before railroads were deregulated in 1980, railroad employment has fallen to about 200,000 from 500,000.

``I have never seen a merger that did not result in job losses,'' said James Brunkenhoefer, national legislative director for the United Transportation Union, the largest railroad union. ``In each and every case they talk about growth, but the track record does not bear them out.''

Indeed, both CSX and Norfolk Southern have said that growth opportunities would mitigate job losses. Norfolk-based Norfolk Southern has about 23,000 railroad employees. Richmond-based CSX employs 29,000 in its rail operations.

``I don't think there is any foregone conclusion that there will be'' job losses, said Robert Fort, a Norfolk Southern spokesman. ``The potential is there to actually stem job losses because of the growth innew business.''

Both Norfolk Southern and CSX expect new business from having rail networks that blanket the East enough to compete with trucks.

Union officials are particularly concerned about the high price being paid for Conrail after the four-month bidding war between CSX and Norfolk Southern.

``As always, the money guys on Wall Street are making money off other people's misery,'' said Edward Wytkind, executive director of the AFL-CIO's transportation trades department.

``They're going to pay for it with our jobs,'' Brunkenhoefer said. ``The higher the price, the more jobs they will need to reduce, so that they can bring down their costs to be able to afford the merger.''

The unions, however, are waiting before they pass judgment on the proposed takeover and break-up.

``Our problem is the companies have not been forthcoming with a lot of information,'' Wytkind said. ``It's time for them to give us some good information, so that the unions, and the employees on their properties who are feeling a lot of anxiety about this, can work on resolving that anxiety.''

Talks between CSX and Norfolk Southern are ``progressing nicely,'' Fort said.

The railroads are working on the details of the proposed division and what that means for jobs. CSX and Norfolk Southern aren't likely to disclose anything until they file their application to takeover Conrail with the federal Surface Transportation Board, which must approve the sale or merger of any railroad.

The unions expect the railroads will want to sit down and discuss the takeover with them at some point.

``We do have enough of an open mind that we're willing to sit down with the three companies and discuss their plan,'' Wytkind said.

The unions, however, are pessimistic.

``At best labor can walk out of the room with what we came in with,'' Brunkenhoefer said.

He expects the largest job losses to come out of the railroads' mechanical and clerical departments. Because CSX and Norfolk Southern don't overlap much with Conrail, not as many operating personnel will lose their jobs, he said.

Many could face relocation to keep their jobs though, he added.

``We're talking about people who have established roots, who have lived in an area for a long time, and have kids and grandkids,'' Brunkenhoefer said.

The unions' goals are to limit job losses, protect workers' statutory rights and protect existing collective bargaining agreements, Wytkind said.

Under the law, unionized employees who lose their jobs as a result of a merger are entitled to collect a base pay for six years or until they are recalled. However, proving a job loss is connected to the merger is sometimes difficult, Brunkenhoefer said.

In many instances, railroads use a merger to break or change an existing labor contract, Wytkind said. ``And the STB has been a willing accomplice,'' he added.

The unions are planning to present a unified front on the merger under the auspices of the AFL-CIO because, in past mergers, some unions have cut individual deals with the merging railroads.

The plan does not preclude the individual unions from striking the best deal for their members, Wytkind said.

If the unions don't like how Conrail will be broken up, they plan to oppose the takeover in the regulatory process and launch campaigns in Congress, state legislatures and at the ``grass-roots'' level to oppose the deal.

There's already been some sympathetic noises coming out of Pennsylvania's Congressional delegation about making sure there aren't too many job losses in the state.

CSX Chairman John Snow and Norfolk Southern Chairman David Goode are meeting with some of Conrail's union employees Monday in Altoona, Pa., where Conrail has a large repair shop, Fort said. They are traveling to the shop at the invitation of U.S. Rep. Bud Shuster, who represents Altoona and is chairman of the House Transportation Committee.

MEMO: (Staff Writer Christopher Dinsmore can be phoned at 757/446-2271

or e-mailed at dins(AT)pilotonline.com) ILLUSTRATION: THE OUTLOOK

Unions are concerned that the merger could result in job losses and

relocations for 23,000 Conrail employees.

CSX and Norfolk Southern say growth opportunities would mitigate job

losses. The companies expect new business from rail networks

competing with the trucking industry. KEYWORDS: CONRAIL CSX NORFOLK SOUTHERN MERGER

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