RAIL UNIONS OPPOSE PLAN FOR MERGING OF TWO PACIFICS

RAIL UNIONS OPPOSE PLAN FOR MERGING OF TWO PACIFICS

Rail unions will strongly oppose the proposed Union Pacific/Southern Pacific rail merger, claiming the $5.4 billion deal faces serious antitrust problems.

Union officials, who already showed their unhappiness with a fast-paced federal regulatory review proposed by the carriers, took their opposition one step further by calling for congressional oversight hearings.The labor groups, which represent close to 200,000 rail workers, drew a distinction between the UP/SP deal and the recent merger of Burlington Northern Railroad and Santa Fe Railway in a resolution approved by the Transportation Trades Department of AFL-CIO at its convention last week.

"Unlike the recent Burlington Northern-Santa Fe merger, there are serious antitrust elements to the UP/SP merger which should be analyzed by the Department of Justice and which will likely face the vigorous opposition of a coalition of interests around the country," the resolution said.

The labor group pledged an outreach campaign to find states, communities and shippers that also are worried about the competitive impact of the merger.

No such coalition has surfaced yet, but some shippers clearly have their reservations about the UP/SP deal.

Customers showed little public enthusiasm for a 4,100-mile package of trackage rights access and line sales awarded to BNSF that was meant to preserve shippers' routing options. Shipper groups want ironclad guarantees that charges for using another company's tracks will be set at a rate that

keeps service competitive.

Some railroads may have common interests with shippers and unions seeking to halt or modify the UP/SP merger.

There is no indication that UPSP will allow anyone else on the lines awarded to BNSF.

UP officials say they are confident last Tuesday's package deal addresses the competitive issues raised by the merger.

Labor also blasted the regulatory review process, terming the 195-day schedule offered by the carriers involved in the merger "an outrage as it allows grossly inadequate time for the consideration of myriad economic, consumer, business and employee concerns."

Several labor unions made a separate filing that proposed a review schedule of at least one year.

"The (Interstate Commerce) Commission faces unreasonable pressures upon it to review incomprehensibly complex matters such as major rail consolidations in an impossibly short time," the resolution said.

The UP/SP merger also will have dire consequences for employees, the union group predicted.

"It is to be expected that thousands of employees will be left without jobs, transferred or displaced to lower-paying jobs," the resolution said.

In the BNSF transaction, job reductions were estimated at 6 percent of the work force, divided equally between clerks and management workers. While hundreds of union workers stand to be moved in that consolidation, jobs for other crafts are expected to increase slightly.

UP and SP have made no projections about the employment consequences for the 46,000 workers on the two carriers. When UP consolidated its interest in Chicago and North Western Transportation Co. earlier this year, a total of approximately 1,500 jobs were eliminated.

Before the C&NW transaction, that company had more than 6,000 employees.