Labor Unions Opposing CP-NS Merger

Railroad labor unions are lining up in opposition to a proposed takeover of Norfolk Southern by Canadian Pacific.

Among the unions sending letters of opposition to the U.S. Surface Transportation Board and other public offices are the Brotherhood of Locomotive Engineers and Trainmen, the Brotherhood of Maintenance of Way Employees, the Transportation Communications Union, the International Association of Machinists and Aerospace Workers; and the Sheet Metal, Air, Rail, and Transportation Workers union.

Also announcing its opposition later in the week was the Teamsters.

In general, the unions argue that the merger would not be in the best interests of their members, shippers or the public.

The NS board of directors has spurned offers from CP to acquire NS stock. A formal merger proposal has yet to be filed with the STB.

BLET President Dennis R. Pierce’s told the STB that there is no benefit to a CP-NS merger and that it could result in layoffs at both railroads.

“CP’s proposal . . . appears designed to simply loot NS assets to generate even more cash that can be sucked out of the railroad for the exclusive benefit of shareholders and investors, and to the detriment of everyone else,” Pierce wrote.

SMART President John Previsich made similar comments, and singled out CP head E. Hunter Harrison for criticism.

“His strategy is clear; use up the current railroad infrastructure and wear out the locomotives, leaving a railroad that will need dramatic investment once he leaves,” Previsich wrote. “The railroads’ officers, investment bankers, consultants and stockholders will walk away greatly enriched at the expense of the future health of our nation’s rail service.”

Union leaders also raised the specter of a CP-NS merger triggering another round of railroad mergers.

“If other railroads are forced to respond in kind, the rail freight industry nationally could find itself in the sort of death spiral – of job cuts and deferred plant and equipment maintenance leading to reduced services, leading to further job cuts and more deferred plant and equipment maintenance, and so on – that the Northeast and Midwest sectors saw between the late 1960s and late 1970s,” Pierce said.