Class Is cite workforce, production cutbacks during 4Q conferences
Senior executives at the six largest Class Is broached the subject during their fourth-quarter earnings conferences held the past week. Union Pacific Railroad EVP and COO Dennis Duffy said the Class I furloughed 3,150 workers — mostly train and engine-service crew members — and placed 48,000 cars in storage by 2008’s end. In addition, UP placed 1,200 locomotives in storage.
BNSF Railway Co. CEO Matt Rose said the railroad laid off about 2,000 workers by late 2008 and expects to furlough a total of 2,500 employees in first-quarter 2009, and Canadian Pacific CEO Fred Green said his road’s temporary furloughs peaked at 1,450 in late 2008 and currently number about 1,000.
But no senior exec went into as great a detail about workforce and production cutbacks as Norfolk Southern Corp. Vice Chairman and COO Stephen Tobias. During a Jan. 28 earnings conference, he said NS’ T&E forces had declined from 12,380 in April 2008 to 11,622 in mid-January 2009, mostly through furloughs and curtailed hiring.
“We began furloughing in October and anticipate furloughing an additional 100 T&E employees in the next 30 days, bringing the total to over 500,” said Tobias “Generally, as reductions in train operations are made, they are followed by reductions in other departments, such as mechanical.”
NS also stored about 20,000 cars — including coal, intermodal and multi-level equipment — by year’s end.
“Our timely car storage focus enables us to right-size our car types to customer requirements and minimize our costs,” said Tobias.
As transportation planners made significant reductions to NS’ operating plan in November and December, they adjusted the locomotives fleet’s size, as well. During the two-month period, the railroad reduced in-service locomotives by 127 units, including 79 through short-term lease turn-backs and 48 placed in storage, said Tobias.
Other “right-sizing” measures include train and terminal plan reductions. Beginning in mid-October and accelerating in mid-November, NS removed train starts from the operating plan.
“Over Thanksgiving, we curtailed operations for the first time in over a decade,” said Tobias.
By 2008’s end, the railroad cut more than 60 network trains from the operating plan, plus local and yard jobs totaling 43,800 train starts.
In terms of terminal plans, the Class I reduced operations at facilities in Columbus, Ohio, Sheffield, Ala., and Reading, Pa.
“We continue to analyze all of our yards and are making adjustments as appropriate,” said Tobias.
All Class Is likely will continue to adjust their workforces, especially if the recession persists. Layoffs have reached the point that 12 percent of United Transportation Union (UTU)-represented workers have been furloughed, said UTU National Legislative Director James Stem Jr. Jan. 28 at a hearing conducted by the House Transportation and Infrastructure Committee’s Subcommittee on Railroads, Pipelines and Hazardous Materials.
Unfortunately for the nation’s unemployment level — which continues to rise and soon will factor in tens of thousands of layoffs just announced by several major U.S. companies, such as Boeing, IBM and Starbucks — Stem expects that percentage to go up.
Posted by: 
Jeff Stagl | Date posted: 1/29/2009
Comments
Posted by csxengineer on 2/3/2009 9:43:59 AM
i knew the economy was bad this kinda puts it into simple terms. csx,ns,bnsf & up have said they have 128,000 cars in storage, comapared to 4 years ago when they had none in storage. those 128,000 cars would make a train 1,455 miles long. and with the utu saying 12% of it members are furloughed. myself, i think when the economy does turn it's not really going to rise back to what it was but go sideways. people will become like our grandparents and only charge when you have a major reason too, which won't increase demand for the rr's i hope i'm wrong.
Posted by tahoevalleylines on 2/4/2009 6:38:00 PM
Railways used the depressed 1930''s to bring forward some of America''s most important contributions to railway motive power, putting technicolor to steam (and squeezing 100mph out of some designs) and making diesels the new wave, led by the GM Train of Tommorrow FT tour. Will it take another automaker, cognizant of the need for railways in the economy to sell cars, to come forward this time around? It is different this time, if Boone Pickens and R. James Woolsey and theoildrumdotcom are correct on their transport fuel supply position: near impossibility of achieving the oil production levels of the 2007-''08 period. These authorities (Rail Execs talk to Matt Simmons (713-236-9999) suggest shelving of new oil extraction and production projects due to investor pullout will make it difficult to achieve previous levels of volume. Compounding this is the IEA Nov. ''08 report which includes a much larger than anticipated oilfield depletion rate. In other words, depletion rate of old fields is near growth rate of new production coming on line. International Energy Agency is a reputable source; rail execs are encouraged to make independent assessment of the references noted. What this means is, the railways, moreso than anytime since the Second World War, will be called upon to pick up the slack from long haul trucking problems, and to a larger amount year by year going forward. This is going to be a very serious national vulnerability. It will call for maximum utilization of every available unit of rolling stock and motive power. The capacity limits once reached will most likely show need for all due haste increase of fleet, and support facility expansions. Additionally, rail and track hardware demand will precipitate hold on some level of steel scrap exports, to gurantee supply for domestic railways. It is also suggested as this becomes an undeniable turn of events regarding need to expand, rehab and rebuild railways, the US State National Guard Units re-commission the ir respective Railroad Operating and Maintenance Batallions. This will assure flow of rail savvy personnel for the private sectos, beyond the Guards'' logistics and disaster recovery role of pre-Vietnam Era. Last reference: see James A Van Fleet''s "Rail Transport and The Winning Of Wars", from AAR (202-639-2100). Interesting comments on dangerous dependence on oil imports from the General...
Posted by michael willis on 2/6/2009 7:52:02 PM
ALSTOM President Americas Pierre Gauthier was interviewed by "Street Signs" CNBC TV host Erin Burnett at 2:15 Friday 6th of February 2009. go to www.cnbc.com then to video "Impact of Stimulus on Jobs". Stimulous or not Mr. Gauthier of ALSTOM has visionary infrastructure expansion plans for the USA. Erin Burnett asked Mr, Gauthier- "You are opening a plant in Chatanooga? "Mr. Gauthier-"That''s correct,it''s in the building mode now and it should create 350+ American jobs building steam and gas turbines for the American market and other markets around the world"." We are in an infrastructure industry which works long term and therefore these investments were planned and we are continuing them". During the CNBC TV interview the test run of the TGV ''Tre Grand Vitesse''-''Very Great Speed'', the worlds fastest train was features on a split screen. A French Air Force jet with a mounted camera was required in order to keep up from above with the 475kph supertrain! A stimulus would be a tremendous boost and speed things up for railway infrastructure investment in the USA. After more than 50 years of being vanquished, America is ready to welcome back passenger railroads and make them an integral and visible part of our daily lives and cities again. By the way, a family member of mine works for ALSTOM, and many thousands more American skilled workers, engineers, transport management, IT professionals and train passengers can look forward to an efficient and prosperous future with TRAINSPORTATION INFRASTRUCTURE. TRANSPORTATION POLICY=ENERGY POLICY
Posted by MICHAEL WILLIS on 2/9/2009 8:15:52 PM
"THE POOR WORM" I will describe a cartoon by -"ROSE of THE BOSTON HERALD-1940". A 2-6-4 steam locomotive puffing along a track with an anxious expression on its facade, its boiler slightly crumpled is being followed from above by 5 enormous black vultures. The (subsidized) birds of prey were in this order: AIRLINE COMPETITION-BUS COMPETITION-TRUCK COMPETITION-PIPE LINE COMPETITION & INLAND WATERWAY COMPETITION. Taken from PAGE 84 of "MODERN AMERICA" "The causes of the railway smash are very complicated and and can receive only summary treatment here. Rail transportation absorbs about ten cents of the consumer''s dollar. In good times railroads employ more than a million men to whom they pay two billion dollars a year in wages. They are alrge consumers of steel and other HEAVY GOODS; and the income from their stocks and bonds held by banks, insurance companies, and private investors greatly affects spending and saving in the nation. The railroad problem is important because our economic order order could not work an adequate transportation system, THE BACKBONE OF WHICH IS THE RAILROADS. -by Maurice B. Rovner of McKinley Vocational High School, Buffalo, New York revised edition-1942. COLLEGE ENTRANCE BOOK COMPANY NEW YORK. There is a rumor out there that the dysfunctional and grossly inefficient US transportation system is being ruled by subsidized OPEC powered vultures?
