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EASTERN RAILROAD NEWS
Last Updated 3/11/98 20:06 PM


March 5, 1998 Correction: The project at CP-Tulp was actually the relocation of the single main track in conjunction with the Pennsylvania Dept. of Transportation US Rt. 222 relocation project. A second main track has NOT been installed at this time. The second track has been planned for some time, but is not currently installed. - Andy Kirk


Level 2 went into effect at 12:30, Elkhart and west, on the 9th at 12:30 p.m. CST and Level 3 took effect at 2 p.m. The Indiana Toll road and many of the highways between Chicago and South Bend closed. Power outages occurred on the Chicago Line at CP 482, CP487, CP491, CP505, CP506 and CP507 and numerous wires were down, disabling radio bases and defect detectors. On the Porter Branch, telephone poles and wires were down at MP 251 and a tree across the tracks at MP 244 and there was a broken crossing gate at MP 248.28. By 8 p.m. on the 10th, most of the CP's and communications had been restored.

On the 10th, the Kankakee Local crew taxied over to Hennepin to get power and plow the Streator Secondary eastward to Streator. The WDKA5 crew from Kankakee taxied over to Gibson to grab power from ML441X to plow from Gibson to Streator.

As if the snow, which extended from Ligonier, IN (CP 395) westward and accompanying high winds and icing (caused when the previous rain had changed to sleet and then snow) hadn't caused enough problems on the Dearborn Div., there were reports of high water at Miller Road (Livernois Yard, Detroit) and at McCrackin Road, near CP-White on the Cleveland Line. Also, some of the runthrough trains for the UP at St. Elmo were either held or rerouted via St. Louis due to congestion problems at UP's yard in Salem, IL (I do not know if this had been caused by weather).-Report by Andy Kirk, CRTS E-mail Update


LAKE BUENA VISTA, Fla, March 10 The proposed acquisition of Conrail by a pair of major U.S. railroads will not trigger the logjams and service disruption that occurred after Union Pacific's 1996 merger with Southern Pacific, officials with the two railroads said Tuesday.

The planned merger to split Conrail assets between CSX Corp and Norfolk Southern Corp is scheduled for a hearing by the U.S. Surface Transportation Board on June 4, with final approval expected by the board in late July or early August.

Executives with CSX and Norfolk Southern tried to reassure grain shippers at the National Grain and Feed Association convention that their railroads had learned important lessons from Union Pacific's bumpy 1996 merger with Southern Pacific.

"We have really learned a lot of things that they would have done differently a second time," John Anderson, executive vice president with CSX, said in a speech.

"I know there have been terrible problems out there. But I believe that's an implementation problem and not an indicator of economic inefficiency," he said.

CSX plans to "overhire" for the transition in ownership, and assign extra employees to deal with customer complaints rather than cutting the workforce quickly to cut costs, he said. The Jacksonville-based railroad also plans to keep many Conrail employees on the payroll and to allow plenty of time for training them, he said.

CSX plans to acquire about 42 percent of Conrail's assets in the southeastern United States while Norfolk Southern is buying the remaining assets in the northeast and mid-west.

"We're going to invest about $500 million in the infrastructure of Conrail," Anderson said, referring to CSX's planned upgrades. The figure includes $153 million for refurbishing Conrail yards and terminals.

Norfolk Southern, which is buying about 7,000 miles of the Conrail system, said there would be fewer problems than in the Union Pacific merger because the deal is smaller.

"Conrail is also in much better physical condition and it has been well- managed," said Donald Seale, vice president of marketing for Norfolk Southern.

"We feel we're doing the right things to make the merger happen in the right way."

Federal regulators recently extended an emergency service order against Union Pacific until August 2, allowing Burlington Northern Santa Fe and Texas Mexican Railroad to provide service to Union Pacific customers.

A huge backlog of grain, coal and other goods developed last year on the 36,000-mile system, which Union Pacific blamed on problems in digesting its acquisition.

Angry complaints from shippers throughout the mid-west and west prompted federal regulators to set an April 2 hearing to review competition in the U.S. rail industry.

An executive with Canadian National Railway also spoke at the meeting and defended his company's proposed merger with Illinois Central Corp.

"This merger is being proposed for all the right reasons," Gerald Davies, executive vice president of marketing for CN, told the grain shippers meeting.

"We have two strong railroads with no overlap in the systems, and no complex union negotiations."

If the CN acquisition of Illinois Central is approved by U.S. regulators, it will have connections with more than 50 short-line railroads, he said.

The merger would also give Canadian wheat shipments a competitive boost, Davies said. The wheat board recently shipped 175 railcars of grain through the mid-west and into the Port of New Orleans in a nearby sale, he said.

"I'm hoping we can move the Canadian Wheat Board away from a regulated system and much more to a market system," he said, referring to the Canadian government's planned 1999 review of the board's structure.

"We don't expect the (Canadian Wheat) board to change by itself," Davies said. "It's going to take pressure from farmers and pressure from the government to make it happen." - by Julie Vorman; - Stan Feldmand, CRTS E-mail Update


CSX Corp. and Norfolk Southern Corp. are rolling ahead toward their planned Sept. 1 division of Conrail Inc., but their blueprint for completing the break-up includes elements that may be beyond their control -- new labor agreements with union workers.

NS and CSX announced their commitment to reach contract revisions, technically known as implementing agreements, before the Conrail breakup in a partial settlement of sale-related issues with the National Industrial Transportation League.

The buyers expressed a willingness to reach those agreements in advance as a way of assuring smooth operations and avoiding the post-merger service woes experienced by Union Pacific Railroad since last summer.

However, no agreements have been signed with three key unions -- the Brotherhood of Locomotive Engineers, the United Transportation Union and the Transportation Communications International Union.

Officials from both carriers said agreements with those unions, as well as dispatchers that are affiliated with BLE, are needed before the integration can proceed.

The unions representing train crews -- BLE and UTU -- have dropped their opposition to the $10.2 billion Conrail break-up. The TCU, which represents clerks, remains opposed to the purchase plan now being reviewed by the Surface Transportation Board.

Typically, the implementing agreements, which are meant to reconcile differences between contracts on merging railroads, are done after the transactions are completed. For example, implementing agreements involving Union Pacific Railroad and BLE still have not been reached at several locations more than 18 months after the UP merger with Southern Pacific Rail Corp., according to BLE officials.

When UTU and BLE endorsed the CSX-NS plan, the unions committed to use their best efforts to reach those implementing agreements before the break-up was approved, although there were no guarantees made by the unions.

In exchange for dropping their opposition, both unions received some guarantees about post-merger working conditions and severance issues for their members that would have been subject to negotiation in talks with other carriers.

Clarence Monin, president of BLE, said his union would begin talks with Conrail's buyers on March 23 in Cleveland.

He said a major issue of discussion would be rearrangement of seniority for workers affected by the sale. He also said negotiators would be discussing grievance procedures to ensure that the wording of complaint handling is consistent with the practical application of those rules.

"We have to work through those issues so the members are familiar with what to expect," he said.

A spokesman for TCU said the union has not had any negotiations or contact with CSX and NS, and that despite its opposition to the acquisition, it is willing to discuss implementing agreements.

TCU members handle tasks such as issuing waybills that authorize train movements and handling other shipment and financial documents. In past mergers, difficulties with information processing have irked carriers and shippers alike.

A CSX spokesman said the company was willing to meet with TCU.

UTU has begun negotiations with Conrail's buyers that were characterized by a spokesman as "positive." -by RIP WATSON, JOURNAL OF COMMERCE STAFF


Kansas City Southern is leasing 30 Canadian National GP40-2LW's and in turn sending them to the BNSF to repay horsepower hours owed. The CN units are being sent to Galesburg, IL then being dispersed to various points on the systme. Many have been "assigned" to the Twin Cities, and are in various services on the BNSF. The following is a listing of the units to be going to the KCS/BNSF:

9407, 9443, 9448, 9479, 9514, 9519, 9574, 9595, 9615, 9628, 9633, 9635, 9637, 9637, 9638, 9639, 9641, 9642, 9643, 9644, 9645, 9651, 9652, 9653, 9655, 9657, 9658, 9660, 9661, 9664, 9665, 9666, 9667, 9668, 9669, 9670, 9673, 9674, 9675, 9676, 9677
- Bill Miller



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