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.
As for the work rules, great increases in productivity realized by the rail industry in the last decade make revising them unnecessary, the unions say. Citing the President's Council of Economic Advisers, the union fact sheet said that without any changes in the rules, railroad productivity would continue to increase three times faster than the average for all other industries.
Neither side expects its opponents to be converted by these tw mutually exclusive views of reality. It is Congress that the two sides hope to convert, since that's where the issues will likely be resolved if a strike occurs.
Under the Railway Labor Act, Congress has the power to force the unions back to work and to impose the terms of a settlement. It's a power the members of Congress say they'd prefer not to exercise.
And Congress can, if it wishes, avoid the role of Solomon. It does not have to devise its own solutions to the myriad thorny issues that the railroads and the unions have been unable to resolve in three years of talks. The framework of a resolution already exists in the recommendations of a Presidential Emergency Board report issued Jan. 15 after 10 months of study.
The PEB is part of the apparatus of government mediation and intervention set up under the Railway Labor Act. When Congress has intervened in the past, it has closely followed PEB recommendations. That leaves the railroads and the unions facing the midnight Tuesday deadline for agreement or leaving it to a Congress guided by the PEB report. That prospect is much more troubling for the unions than for the railroads.
While the railroads say the wage package recommended by the PEB is too expensive, the PEB proposals would give them some relief on work rules. For example, under current rules a train crew receives extra pay if it travels more than 108 miles in a day. The PEB suggested extending that to 130 miles by 1995.
In addition, railroads would get greater flexibility in dropping off and picking up cars along the main route of a train. Under the current rules, uncoupling and coupling is done in yards by separate yard crews, a practice the railroad says greatly restricts its ability to provide fast service that is competitive with trucks.
Mr. Mahoney, the union lawyer, said the PEB report clearly favors the railroads. "They love it," he said.
Issues and recommendations
This is a list of the principal issues involved in the talkbetween the major railroads and the unions, plus the recommendations issued Jan. 15 by the Presidential Emergency Board. Those recommendations would likely form the basis of
any settlement imposed by Congress.
* Wages:
The unions seek a 5 percent pay increase per year, plus cost-of-living adjustments, retroactive to 1988, the year of their last wage increase.
PEB proposes a $2,000 lump-sum payment upon signing of the contract, plus base wage increases of 3 percent in both 1991 and 1993 and a 4 percent increase in 1994. Workers also would receive four lump-sum cost-of-living payments between this summer and the beginning of 1995.
* Work rules:
Train crews currently receive bonus pay if they travel more than 108 miles in a day. The railroads want the figure raised to 160 miles.
PEB proposes step increases to bring the basis to 130 miles by 1995.
Railroads want more liberalized rules allowing the crews that take trains along the main routes to do some of the work now restricted to yard crews.
PEB proposes permitting road crews to make three additional moves, such as picking up or dropping off cars along the route.
*Medical benefits:
Railroads want the unions to share some of the costs of health insurance. Unions have accepted the idea in principle.
PEB suggests the unions' share of costs be paid out of lump-sum and cost-of-living payments. PEB also suggests that railroads should draw down a $300 million reserve fund to help pay for higher health insurance costs.
The nation's railroads
The following list of the nation's railroads includes the name of the companies, where they are based, how many miles of track they control, the geographical areas in which they operate, and the number of employees (total/union).
* Atchison, Topeka and Santa Fe Railway Co.; Schaumburg, Ill.; 10,600 miles; Midwest, West, Southwest; 15,000/13,000 employees.
* Burlington Northern Railroad Co.; Fort Worth, Texas; 25,000 miles; West, Midwest, South; 33,000/29,000 employees.
* Chicago and North Western Transportation Co.; Chicago; 6,000 miles; Midwest and West; 7,300/6,600 employees.
* Consolidated Rail Corp. (Conrail); Philadelphia; 13,000 miles; Midwest and Northeast, including Maryland; 27,800/24,000 employees.
* CSX Transportation; Baltimore and Jacksonville, Fla.; 19,000 miles; South, Midwest, Mid-Atlantic, including Maryland; 37,500/32,000 employees.
* Illinois Central Railroad Co.; Chicago; 2,800 miles; South and Midwest; 3,600/3,200 employees.
* Kansas City Southern Railway Co.; Kansas City, Mo.; 1,600 miles; South and Midwest; 2,000 employees (union employment figures not available).
* Norfolk Southern Corp.; Norfolk, Va.; 14,800 miles; South, Midwest, Mid-Atlantic, including Maryland; 30,000/24,000 employees.
* Southern Pacific Lines; San Francisco; 15,500 miles; West, South, Southwest, Midwest; 22,700/20,500 employees.
* Union Pacific Railroad; Omaha, Neb.; 21,000 miles; West, Southwest Midwest, South; 29,000/26,000 employees.