railroad treatment to end
The United Transportation Union (UTU) and other railroad union members of the AFL-CIO say they “have joined with rail shippers urging Congressional passage of legislation restoring the railroads’ exposure to antitrust laws.”
Separately, UTU International President Paul Thompson opposed railroad efforts to gain a special tax break from Congress.
Thompson said on August 9, “As railroads are abusing their political power to earn monopoly profits off the backs of their employees, they similarly are abusing their market power to earn monopoly profits off the backs of captive shippers.”
He added, “This railroad bully, focused entirely on feeding its greed for greater profitability, must be corralled by society.”
“One-hundred-nineteen years ago, Congress created the Interstate Commerce Commission to regulate the railroads’ monopoly power,” Thompson explained, “but as a Ralph Nader study-group documented three decades ago, and others have documented more recently, the railroads defanged that agency (now the Surface Transportation Board) through a variety of tactics, including offering regulators high-paying jobs when they depart.
He pointed to a proposed merger of two freight railroads.
“When the Justice Department sought to prevent Union Pacific from acquiring the Southern Pacific – a merger destined to create a calamity in rail service and cost thousands of jobs – the Surface Transportation Board ignored the Justice Department and approved the merger,” Thompson said. “The STB also allowed CSX and Norfolk Southern to engage in a bidding war for Conrail that resulted in substantial pain for shippers and employees and employee families.”
He said the Rail Labor Division of the AFL-CIO has asked Sen. Arlen Specter (R-Pa.), chairman of the Judiciary Committee, to encourage passage of legislation to bring railroads under the same antitrust laws that affect virtually every other industry in America.
“Under current law, our nation’s freight railroads, no matter their size or reach, are afforded antitrust exemptions for a wide range of activities,” says the letter. “Railroads have used these exemptions to grow through consolidations and mergers, and too often the STB has been unable or unwilling to protect the public interests, including the rights of workers,” he stated.
“Freight railroads have in turn exploited their virtual monopolistic position to secure concessions from their workers during labor negotiations,” he wrote in a letter to union members.
“Specifically, rail carriers will often refuse to engage in meaningful collective bargaining and instead present unions with one-sided offers. If the union refuses, the rail carrier will call for a creation of a Presidential Emergency Board to settle the dispute.”
Rail carriers must settle contracts with their unions at the negotiating table “and not through Congress and the one-side process of a PEB,” he said.
Thompson vowed that the UTU and others in rail labor would be carrying into the next session of Congress their joint effort to end railroad abuse of political and market power.
The UTU president said also that he would work to prevent legislation allowing railroads hundreds of millions of dollars in tax credit relief.
“Given the record profitability of today’s railroads, their abuse of their monopoly power and their steadfast refusal to bargain with their employees in good faith, there is absolutely no legitimate reason for railroads to be given tax relief,” Thompson said.
He pointed out that the Wall Street firm of UBS on August 9 confirmed the ability of railroads – without any tax relief – to maintain the property, expand the network, not gouge captive shippers further, pay employees a competitive wage and train them properly. In a report to investors entitled, “To the stars on the wings of a pig,” UBS said the railroads are earning their cost of capital.
“Given the size of our nation’s deficits, the cost of the war in Iraq, other national security costs and pressing needs of those who have lost their livelihoods due to government policies encouraging the export of jobs, there is absolutely no reason for railroads to avoid paying their taxes,” Thompson said.
He added, “It is high time railroads were treated just like everyone else -- and that means an end to insulation from the antitrust laws, an end to their cozy relationship with regulators and an end to their feeding at the public trough while abusing customers and employees,” Thompson said.