Management, unions fall off track

April 14, 1991|By John H. Gormley Jr.

Like two freight trains barreling toward each other on the same track, the nation's major railroads and their unions seem headed for a collision as the deadline for reaching a new labor contract draws near.

In the absence of an agreement by midnight Tuesday, 10 unions representing approximately 200,000 employees of the nation's 10 biggest railroads will be free to strike Wednesday morning.

"In my opinion, there will be a strike," William Mahoney, a Washington lawyer representing the unions in the negotiations, said last week. There has been some question whether the unions would strike all or just one of the railroads, or perhaps conduct a rolling strike, moving from one railroad to another. Mr. Mahoney, however, declared flatly that he expected a strike against all the major freight railroads.

Though two unions representing more than a quarter of the rail workers reached tentative agreements with railroad management last week, management remained pessimistic that a strike could be avoided.

Some labor unions have called openly and early for a national strike, and some have shown no inclination to bargain realistically despite the efforts of the National Mediation Board," Charles I. Hopkins Jr., management's chief negotiator, said Thursday.

Mr. Hopkins refused to divulge the terms of the agreements reached with the Transportation Communications International Union and the Brotherhood of Railroad Signalmen last week, but he did say the recommendations of a report issued in January by a Presidential Emergency Board "provided a framework for the successful negotiation."

While settlements with some of the other unions before the deadline remained a possibility, Mr. Hopkins said he doubted agreement could be reached with all 10. "So a strike is likely," he said.

If a strike does occur, the Bush administration has vowed to move quickly to fashion legislation to force strikers back to work. In a speech in Los Angeles, Secretary of Transportation Samuel K. Skinner declared Friday, "There is no good reason for a crippling nationwide rail disruption, and this administration is committed to avoiding it."

Railroads carry more than a third of the nation's intercity traffic by weight, compared to about a quarter for trucks, according to the railroad industry. Many industries depend on railroads and -- would be forced to start laying off their own workers soon after the beginning of a strike. The U.S. Department of Transportation estimates that within two weeks, a rail strike would cause the layoffs of half a million workers in other industries.

"A rail strike would spread a long way beyond the railroad and its workers," said Dan Lang, vice president of the Association of American Railroads. Coal mines would begin closing within days of a strike, he said.

Many carmakers and other man ufacturers have adopted the "just-in-time" approach to inventory control in order to reduce production costs. That means materials are scheduled for delivery very close to the time they are needed. Even one late shipment can force an entire assembly line to shut down.

The rail industry says nothing less than its ability to compete hangs in the balance in the contract talks. "Railroads face a new era of increasingly stiff competition, a state of affairs they cannot possibly survive if they accede to the unions' demands," according to a briefing book the industry has circulated to the media.

In particular, the industry wants relief from what it characterizes as "archaic work rules." By defending those practices, "the railroad unions are obstructing the railroads' efforts to make themselves productive," according to the briefing book.

John Winner, a senior associate at Booz, Allen & Hamilton Inc. who often works as a consultant to the rail industry, thinks the outcome of the negotiations will go a long way in deciding the ability of the railroads to compete with trucks.

"It's not a matter of life and death," he said, but if the rails cannot compete they will become much smaller as they lose high-value manufactured goods such as autos and are left only with bulk commodities such as coal.

In a rebuttal of the industry's claims, the unions have produced briefing papers of their own.

"Despite claims made by the railroads, the industry is financially strong," according to the unions. Between 1985 and 1989, net revenue for the railroads averaged $2.5 billion, "the highest in railroad history," the unions said in a document entitled Railway Labor Fact Sheet.

Despite the industry's financial strength, the wage package offered the unions would, after adjustment for inflation, represent a 16 percent decline in buying power over the life of the contract, the unions maintain.

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