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Rail News Home Federal Legislation & Regulation

1/18/2016



Rail News: Federal Legislation & Regulation

FRA: rail mergers would impact safety; SMART TD opposed to CP takeover of NS


Federal Railroad Administrator Sarah Feinberg late last week told the Wall Street Journal that her agency has concerns that mergers of Class Is could undermine railroad safety.

Although the Federal Railroad Administration (FRA) has no regulatory authority to stop a merger, Feinberg said the FRA would expect to scrutinize the "significant safety hurdles" that would result from mergers between two major freight railroads, the newspaper reported.

"Combining large rail systems, rule books, workforces and safety cultures can lead to safety vulnerabilities and deficiencies," Feinberg said. "It's our job to insure that safety is not only not compromised in any potential merger, but prioritized."

Meanwhile, the president of the Transportation Division of the International Association of Sheet Metal, Air, Rail and Transportation Workers (SMART TD) is among the latest in a series of letter writers to voice objections to the Surface Transportation Board (STB) regarding Canadian Pacific's proposed takeover of Norfolk Southern Corp.

In his Jan. 14 letter to the board, John Previsich said the union is "strongly opposed" to the proposal, and its "real potential for a far-reaching, detrimental impact on America's rail network, including lost jobs and an equally negative impact on those who ship by rail."

He also opposes CP's plan to establish a voting trust to assume control in advance of STB approval of the merger. Such a move would violate existing statutes and regulations regarding "unlawful control," he wrote.

Additionally, Previsich expressed concern that the merger would result in cost-cutting measures that would enrich officers and stockholders at the expense of railroad workers, infrastructure maintenance and necessary capital projects.

"CP's relentless pursuit of short-term profit with little regard to the impact on the greater good — workers, communities and our nation's rail shippers is well known," Previsich wrote. "If approved, this merger would mean fewer railroads and less competition in the industry. The certain results will be fewer rail jobs, higher freight rates and diminished rail service."

SMART TD represents more than 125,000 active and retired railroad workers.



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