Perils for Maryland in the rail merger

November 27, 1996|By Casper R. Taylor Jr.

NOT MANY PEOPLE realize it, but the battle now under way between CSX and Norfolk Southern over the purchase of Conrail will have a huge impact on the Port of Baltimore, the Maryland economy and Maryland workers from the docks in Baltimore to the locomotive shops in Cumberland.

Let's talk about the impact on workers first. CSX Transportation employs more than 1,900 Marylanders throughout the state. By its own reckoning, CSX estimates it will realize more than $730 million in cost savings from a CSX-Conrail combination.

If you look at a map of Conrail superimposed on a map of CSX, you will immediately notice substantial overlap. Both railroads have major east-west routes between Pittsburgh and Baltimore. PTC It doesn't take a rocket scientist to figure out that certain facilities -- and workers -- will be surplus if the two giants merge.

I am very concerned that this may result in the shut-down of the locomotive-repair shops in Cumberland, throwing some 700 or more of my friends and neighbors out of work. The reason? Just 100 miles away, Conrail opened its own huge underutilized locomotive repair-shop in Altoona, Pennsylvania.

CSX and Conrail have promised Pennsylvania that the Altoona shops will stay open, which can only mean that the Cumberland shops will close. And why not? When businesses merge, the combined companies save money when redundant facilities are shut down. It seems unlikely to me that CSX and Conrail will retain Cumberland's shops with the Altoona shops so near at hand.

To overlap between two railroads also means that other yards, terminals and dock facilities in Baltimore might be abandoned -- throwing still more Marylanders out on the street.

The Maryland economy may also suffer. After the merger, CSX and Conrail will own or operate 98 percent of the tracks in the state -- a virtual monopoly. This will adversely affect Maryland's economic development. The importance of a competitive railroad industry in our state is also important in the quest to attract job-producing, tax-paying industries to Maryland. We must do everything we can to promote competition in the railroad industry.

We must also be concerned that the most devastating effect will be felt by the Port of Baltimore, which benefits greatly today by being served by two major railroads. If CSX and Conrail merge, there will no longer be rail competition to our harbor. In fact, there won't be another railroad within 40 miles of the place.

Eggs in a single basket

No other region in the United States is content to put its economic eggs in the basket of a single monolithic railroad -- and neither should we. Competition, that only two major railroads can provide, is necessary for our port to prosper and grow.

A merger between these two big railroads may be bad news for Maryland. As the facts continue to develop, we may need to craft our state policy to ask hard questions and demand answers to what the CSX-Conrail proposal means to Maryland.

One thing is certain: We must insure that Maryland does not suffer any loss of jobs or economic-development opportunities from lost competition. In fact, we need a strategy that will turn these industry developments into a plus for our state.

Del. Casper R. Taylor Jr. is speaker of the Maryland House of Delegates.

Pub Date: 11/27/96

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