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October 2006

Rail News: Rail Industry Trends

A Two-Man Attempt at Negotiating


That U.S. railroads and rail labor unions have struggled (to put it mildly) during the past couple of years to come to terms on a labor contract is well known. One key sticking point: Thirty-two U.S. railroads — by way of their national bargaining agent, the National Carriers' Conference Committee (NCCC) — have notified the United Transportation Union (UTU) that they wish to negotiate a crew reduction to one man in the locomotive. In February, UTU obtained a court order in a U.S. District Court in Illinois declaring UTU had no obligation to bargain the issue. In September, NCCC took the issue off the table — for this round, anyway

Can a settlement be negotiated? As friends who have spent our long railroad careers representing opposing sides of management-union issues, we thought it would be a challenge. And it was!

Leverage for labor
We both agree that there's plenty of technology now available to engineers that can improve train operation, and do so safely. That technology includes speed "cruise" control, constant radio contact with dispatchers, automatic brake application for slowing or stopping trains if a locomotive passes a yellow or red signal, "dead man control," computer-assisted track profile and a range of Global Positioning System applications.

We also agree that the one-man-crew issue affords rail unions with the best leverage they've had in years to negotiate a range of "quality-of-life" issues, including work schedule unpredictability.

Moreover, we agree that railroads have an opportunity to substantially reduce costs while also making railroading a more attractive career — a crucial point here.

Railroads will have to replace more than 40 percent of their operating workforce during the next 10 years because of attrition. It's getting harder and harder to hire quality employees who are willing to work under current conditions. Employees regularly work 12-hour shifts; after eight hours' rest, they're often called to work another 12 hours. The pay is good, but employees often work days and nights, spend many hours away from home and do not have consistent or predictable rest.

Unpredictable schedules tend to degrade one's quality of life, particularly if would-be railroaders compare rail posts with other job opportunities.

What's more, erratic sleep patterns clearly have been factors in safety violations and derailments. The U.S. Department of Transportation (DOT) recently reduced truck drivers' on-duty time to 11 hours, after which they must rest 10 hours, to improve highway safety. DOT mandates a maximum of 12 hours on duty for railroad workers.

With these issues and points of agreement serving as a backdrop, we set out to negotiate an agreement of our own. How? By exchanging numerous emails over several months, we came to terms on a five-year agreement.

The Amtrak model
Because Holtz had served in management positions for both short-line and Class I railroads before retiring, he represented rail management.

Kaminen, a retired railroad engineer who had served as a UTU general chairman and a Brotherhood of Locomotive Engineers local chairman, represented rail labor.

"Since most agreements are satisfied by enhancing working conditions and pay issues, I will use the Amtrak agreement as a model," Kaminen wrote in his first email, noting that one-man crews are currently working a basic six-hour day at the national passenger railroad.

Holtz asked that the negotiations cover a five-year period — so as not to become mired down in local exceptions, local conflicts and local differences. And Kaminen concurred.

The five-year factor
Why the five-year period? It would assure labor peace on the issue, give time for the emotional responses to cool, and for the quality-of-life issues to be addressed and implemented. It would also provide carriers with the assurance they will not have to renegotiate all of this piecemeal or annually. Management must be assured labor issues and costs are stable before expanding capacity. Carriers must know that workers will be available to staff the increased capacity as well as the costs of hiring and training these additional employees.

By the same token, employees need to know that they will not become unemployed during the length of the contract.

And five years of steady wage increases — enough to at least cover inflation — would help on the quality-of-life front.

We also figured five years would be enough time for emotion to be "wrung ou" of the one-man crew issue.

Kaminen consented to Holtz's requests, provided that railroads would share a portion of the savings with labor; wages would be increased annually over the contract's term; no employee would lose his or her job; and carriers would retrain existing employees to become engineers.

Note: We were unable to determine the savings by carrier or nationally, as there are many additional savings that should accrue — taxes, overtime vs. additional employees, reduced away from home costs, etc. Ultimately, carriers would be better able to manage their business in crew availability and crew costs, we concluded.

Coming to terms
But here's what we were able to come to terms with:

  • A reduction in the length of the basic work day. Engineers' work day would be reduced from 12 hours to 11 hours after Year One and 10 hours after Year Two. Conductor training for engineers normally requires about six months, which would provide a smooth transition and a highly qualified source of engineers familiar with railroad rules, operations and lifestyle.
  • A plan to reduce fatigue. Engineers would be paid hourly for an eight-hour day, with time-and-one-half for overtime. When possible, crews would be exchanged with a meeting train in order to return engineers to their home terminal. The aim: reduce fatigue and railroad expenses for hotels, meals and taxi fares.
  • A detention payment plan designed to reduce expenses and engineers' time away from home. To encourage improved crew planning, detention time would start at full pay for a period of eight hours, after a layover of 16 hours away from home terminals. The 16-hour figure was negotiated to maintain engineers' "biological time clocks" by providing start times consistent with the previous day's start time. To give management ample planning time, the detention payments would become effective in Year Four. Railroads would then have 24 hours from crew start time to plan a return before incurring penalties.
  • A "time-off" policy. In Year One, engineers would have one day off during a seven-day period. In Year Two, engineers would have two days off during a seven-day period. In carrier emergencies, an engineer would be able to work (at his option) for time and one-half on the sixth day.
  • A wage increase. Engineers working under the one-man crew pact would see their hourly wage increase 4 percent in each year of the agreement, culminating in a 22 percent increase over five years.
"Yes, I agree," Kaminen wrote in his final email to Holtz. "It looks like we have an agreement for the one-man crews to present to the membership for a vote to become effective Jan. 1, 2007."

This hypothetical negotiation does not take into consideration the differences between the UTU and Brotherhood of Locomotive Engineers and Trainmen, or other issues involved in union-railroad negotiations. And it's sure to elicit an "easier said than done" response or two.

But given the problems and opportunities facing this industry, it's crucial that leaders from both sides of the "one-man" debate find a way to begin a constructive dialogue. An inability and/or unwillingness to come to terms could hurt the future of an industry we strongly believe in.

Brian Holtz founded consulting firm Creative Railroading after retiring from transportation management. He has worked for Kansas City Southern, Southern Pacific Railroad and Arkansas Midland Railroad, as well as several large railroad customers.

Ron Kaminen is a retired railroad engineer who served as a United Transportation Union general chairman and a Brotherhood of Locomotive Engineers local chairman. His rail resumé includes stints with Amtrak; Canadian Pacific Railway; Duluth, South Shore and Atlantic Railway; the Soo Line; and Chicago and North Western.


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