Via Progressive Railroading
Union Pacific Railroad reported second-quarter net income jumped 19 percent to nearly $1.2 billion, or a Q2 record of $1.45 per share, from $979 million, or $1.17 per share, in the same quarter last year.
Total operating revenue for the quarter climbed 10 percent to $5.25 billion from $4.77 billion, while freight revenue increased 11 percent to $4.9 billion from $4.4 billion a year ago, the Class I announced today in a press release.
Second-quarter operating income totaled $2 billion, a 21 percent increase over operating income in the same period a year ago.
"I am pleased with our results through the first six months, and look forward to continuing our momentum through the remainder of the year," said Chairman, President and Chief Executive Officer Lance Fritz. "Guided by our strategic value tracks, our entire team is focused on providing an excellent customer experience while safely and efficiently delivering on our innovative productivity initiatives."
Total revenue carloads climbed 5 percent in the second quarter compared to a year ago. Volume increases in coal, industrial products, agricultural products and intermodal more than offset declines in chemicals and automotive carloads.
The increase in freight revenue was driven by volume growth, increased fuel surcharge revenue, core pricing gains and a "positive" mix of traffic, UP officials said.
Specifically, revenue from intermodal rose 3 percent. From chemicals, revenue was up 4 percent; automotive, up 5 percent; agricultural products, up 7 percent; industrial products, up 24 percent; and coal, up 25 percent.
The Class I's operating ratio improved 3.4 points to 61.8 percent for the quarter compared to the operating ratio a year ago. Higher fuel prices positively affected the operating ratio by a half of a point.
Absolute business volumes should be stronger in 2017's second half than in the first half, although year-over-year comparisons will be more challenging, Fritz said.
"In this environment we will focus on our growth opportunities. In addition, we will continue to make progress on our G55 + 0 initiatives as we work to make Union Pacific a stronger, more efficient company," he said. "We are confident these efforts will generate top-line growth, margin improvement and greater returns for our shareholders."
Part Two Located Below
Jaisal Noor: We're here to commemorate the 140th Anniversary of the Great Railroad Strike of 1877, which not a lot of people know of today.
John Risch: True.
Jaisal Noor: But it was the first national strike. It involved at least 100,000 workers, almost half the army had to be called in to put it down.
John Risch: True.
Jaisal Noor: Across the country. More than 100 people were killed. Thousands were injured and the workers were fighting against an additional 10% pay cut.
John Risch: True.
Jaisal Noor: That the railroad owners were instituting on the workers even though they were getting some record profits. That happened 140 years ago. Fast forward to today, do workers in the railroads are they facing similar conditions? Do they have somewhere grievances to what existed almost a century and a half ago?
John Risch: Well, we've come a long way. The railroad industry as far as jobs, wages, job security, things of that nature, we've come a long way, but it's a constant struggle. We need internal vigilance to make sure we protect what it is we have. I work in the Washington DC office, and time and again something will come up to undermine the safety of rail workers or issues regarding funding for Amtrak and things of that nature so we keep working on that. We are in national negotiations and, of course, the railroads are demanding things to, changes in our working conditions of what not that would make our jobs less secure and make us pay far more for our health insurance and things of that nature, but that really pares in comparison to what happened in 1877. When there were actually implemented wage cuts without any negotiations 'cause the unions weren't able to negotiate it. It was against the law at the time to negotiate as a labor union, but we've come a long way. We're actually in position today where we're more protecting what we have and try and make some modest gains as we proceed forward, but not like what happened by our predecessors.
Jaisal Noor: One of the things that's sort of forgotten or written out of the history books today is the gains that were made for workers in America through strikes such as The 1877 Strike. Talk about how that benefited, how those struggles ended up creating gains for workers and the protections, like the 5-day work week, 40-hour work week.
John Risch: Sure.
Jaisal Noor: Vacations, weekends. Talk a little bit about what gains were implemented through struggle that are often forgotten about today.
John Risch: Each and every gain that working Americans have made over the last century and a half was led by organized labor. There's the old saying, "Unions: The people that brought you the weekend," and organized labor through collective bargaining agreements, through pursuing changes in law both at state and federal level, are the ones that brought improvements and working conditions to America's workers. Whether it be the minimum wage, OSHA and Safety Regulations and railroad workers part. It's the Federal Railroad Administration Regulations. We work on those issues all the time to make the workplaces safer. Then through collective bargaining, we try--our attempts are to improve the wages and conditions of work, but beyond that, we fully support things like raising the minimum wage, living wages, things of that nature that are good for all Americans.
Jaisal Noor: Obviously, technology has advanced. Automation has increased dramatically over the last century.
John Risch: Oh, yeah.
Jaisal Noor: How has that impacted workers on the ... working the railroads today?
John Risch: It's had a tremendous impact. Back in 1920's, 15% of the American Workforce, more than two million Americans when we only had a far fewer people living in this country, worked in the railroad industry. Technology is changing dramatically. I hired out on a railroad in North Dakota and when I hired out, we had in 1978, we had five people on a train. We went 100 miles. When I went, left to go to DC in 2009, we had two people on a train and we went 200 miles and instead of getting our instructions on where to take sightings and what not with our trains by people along the right-a-way, it was all by signals and microwave messages to our locomotive cab. The industry has shrunk tremendously as far as employment goes, but at the same time, we're hauling more freight than we ever did. The good news is that on the freight side, America's freight railroads are the finest freight railroad system in the world. Our tracks and the conditions of the infrastructure is better shape than it's ever been in so that's good news. I'm pretty positive about the future for rail; more energy efficient, better for the environment, reduces highway congestion. We work on things in Washington DC and the various states to try and promote rail trip.
Jaisal Noor: National unions have been in decline for some time as far as membership goes.
John Risch: Yeah.
Jaisal Noor: And now we have an administration that is openly anti-union in Washington DC. If they had their way, there would be no more unions, if you want to be honest about it.
John Risch: Yeah.
Jaisal Noor: What are you seeing as far as legislation in DC right now that's affecting workers around the country?
John Risch: Well, already the Education and Workforce Committee in the House have passed a number of bills out of committee that would make it far more difficult for workers to organize. There's always the threat of National Right to Work. I'm not sure about President Trump himself being viciously anti-labor, but certainly he's appointed some people that would cause us a great deal of concern. National Right to Work is an issue that were concerned about because it's very goal is to undermine and weaken trade unions across America. It's the only reason for it. The only people that are supporting it are big corporate interests that want to destroy the labor movement, so there's been bills introduced in both the House and the Senate. Sean Spicer, the President's Press Secretary, at a press conference said that the president does support National Right to Work. We're concerned about it. We're working on it. We've done outreach to our membership. I continue to work with Congressmen on the Hill, especially pro-labor Republicans, and there's some, to make sure that doesn't take place.
Jaisal Noor: Finally, as we're commemorating the 140th Anniversary of The Strike of 1877, what do you think is the most important thing for people to remember today about past labor struggles like it?
John Risch: I think what we should remember is don't take what we have for granted. Oftentimes my own members think that well, you know the railroads would provide us with these wages and fringe benefits and working conditions without the union being there, and they're not really fully knowledgeable about what it took to get to where we are today, when you still need to make improvements. We have terrible problems with fatigue in the industry and we'll work on that, but we're where we're at today because there was a lot of struggles that happened between 1877 and 2017 and they'll be more in the future.
Railroad Workers' Struggles Continue 140 Years after their First National Strike (2/2)
Jaisal Noor: So we're here for this 140th anniversary of the Great Railroad Strike of 1877, which many people don't know about today, but it involved at least 100,000 workers. More than a 100 people were killed. Half the US Army had to come in to put it down, and so as Bill has written about in his book, we're here to talk about the unknown history from that period and also why it's relevant today. So talk about the struggles that the railroad unions are experiencing now in the context of this strike that happened 140 years ago. Are there any parallels to what's happening now to what happened in the past?
Michael Twombly: Well, there is because today there are great demands placed on locomotive engineers and conductors to work a lot of hours. Railroads are trying to get the most out of their manpower and they don't want them to have time off. And even though employees might work 60 hours in a week, if they took two days in a row off on a weekend, they would be gently advised that they're setting a pattern for absenteeism and that they hire full-time employees and even though you work 60 hours that week, if you refuse an assignment or you wanted a day off, you were no longer a full-time employee, and not the kind of person that they're interested in have work for them.
Jaisal Noor: So it sounds like mostly concerns about working conditions and hours, which were things that unions fought over a century ago and more.
Michael Twombly: Well, that's true, and the battles that were fought back in 1877 and continuing forward had a lot to do with how the labor laws in regards to railroads were formulated because after upheavals, they called it an upheaval-
Jaisal Noor: They called it a riot. They called it insurrection.
Michael Twombly: Insurrection, that's right. It was a strike. The effect that it had on the economy, legislatures got together to prevent this sort of interruption and so eventually crafted the Railway Labor Act so that it makes it extremely difficult for rail employees to go on strike. You can eventually get there but you have to resolve your issues through binding arbitration and you have to work your way through a very long process before you would ever be permitted to seek self-help, and when you get to that point, even now, if there's going to be any major interruption in the commerce, which there almost always is, they can put you back to work and they can assign your case to a Presidential Emergency Board, which they make recommendations. If you don't accept them, they send them to Congress and they vote them in and you get it anyways. So it's extremely difficult, if not impossible, for rail workers to go on strike unless a major dispute was to come confront the workers, and essentially the railroads would have to just flat out walk away or abrogate portions of the collective bargaining agreement to reach that status. And so if they went to court and asked for permission to go on strike, the judge would look at it and see whether or not it was a matter of interpretation, which would be considered a minor dispute. You'd have to resolve it through binding arbitration, or in fact if you did have a major dispute. There're very, very few cases ever are incidences ever reach the level of major dispute today. So most everything we do is handled under through the Railway Labor Act and it's stepped through the National Mediation Board to resolve through binding arbitration.
Jaisal Noor: And so talk about what's your experience in the railroad union in the larger context of unions in America today, cause we know that membership has been falling over the last several decades and now we have an administration that is openly anti-union. What impact has that had on your workers?
Michael Twombly: Well, at this point, the biggest attack against us that's looming on the horizon is Right To Work, National Right To Work legislation. At the moment, the way it's designed it may not apply to rail workers under the Railway Labor Act, but it wouldn't take much if they were able to get a majority in the Senate and the Congress to create Right To Work legislation that would change the Railway Labor Act as well. And basically we view that as an attack on labor because they know that it's not really about the unfairness of a person having to pay a fee or union dues to support their organization to speak on their behalf in collective bargaining. What they view it as is that if we can tell them that they don't have to pay, then people will stop paying dues if they don't have to, and they hope that enough people will drop out from paying dues that they'll no longer be able to function financially and that the unions will go away. So it's really an attack on trade unionism and it's really is not all about the poor guy has to pay dues. They know that what will happen and the end result will eliminate trade unionism, and once that's gone then they'll have their way with labor once again, long before the unions ever arrived.
Jaisal Noor: So today in history books and textbooks, the history of labor in this country, it's hard to find. There's hardly any mentions of it. Most people don't know about this strike: The Great Strike of 1877. What efforts has your union doing to educate its members about the history of the fights that have happened in the past and how that's effecting them today?
Michael Twombly: Well, through our trade journal, the Locomotive Engineer, the engineer's journal, the president and others do op-ed pieces in there and talk about the benefits of being in the union and what it means, and talks about at different times what's happened in the past and what people fought for to achieve the level of contracts and benefits that we have today, and try to educate the young men that are coming along now who really weren't engaged in those fights and don't realize that the difficulties that were involved in achieving the contracts that they have and not to take them for granted. And that takes some education, and our president, Dennis Pierce, is busy doing the best he can to do that.
Jaisal Noor: I guess one of the things that I've been learning about the Railroad Strike of 1877 is that there was an enormous amount of participation from the communities where the workers came from and other industries that operated in solidarity with the striking workers. Do you think that's still an important aspect of the movement today, that relationship between workers and the communities they come from at a time when, again, there isn't that much knowledge about labor and its importance in American history?
Michael Twombly: Well, it really doesn't exist like it did in 1877. Railroads were much more labor intensive in those days, many more people to operate the railroad. Today through advances in all kinds of technology, the workforce has been dramatically reduced, and so in those days, a large portion of any given town where the railroad ran were employed by railroads, and every family had railroad workers in it. So if something happened to their family member, it happened to them, and so an injustice to them was an injustice to the family, and they stood up to protect them and that's what happened in those days. A lot of those folks that were called in to try to enforce or break the strike in those days had family members that worked on the railroad, and they couldn't bring themselves to stand up against their relatives and their families and so forth, but today there's so few rail workers in comparison that that moral majority for railroad workers doesn't exist today.
Jaisal Noor: And I guess the Railroad Strike of 1877 was one of the first times when people were directly confronting corporate power and corporate greed and arguing that your profits are not worth more than my livelihood and the livelihood of my community. I think in the last few years that has resurfaced in American culture with the Occupy movement and other recent labor struggles. Do you think that's true, that again people are realizing this central conflict between corporate power and human, like actually workers, and how that is a fundamental struggle in American society today?
Michael Twombly: Well, the extreme right wing doesn't like trade unionism because when you go to work they want to be able to do with you as they will. So they try to convince people that union is bad for them, and they try to convince people that this highly paid union worker or a higher paid union worker with benefits, you don't have that and that's wrong, and they shouldn't have all that. That's wrong to have that, and so instead of wanting to rise to the level of the trade unionists and get a better job, a higher paying job, by belonging to a trade union, they try to convince them that the thing to do is to become anti-union and take the union down so that he'll make less or get paid on the level that the lower paid workers are.
And a lot of them ... Favoritism is one of the biggest problems in companies. So a young man comes in and he can work harder, faster, and he thinks he should have the job of the older worker because he's a better guy and he's very willing to push the older worker aside. This is unfortunately the mentality that we face in a lot today, and that's why a lot of young folks think that trade unionism is bad because if you go on a seniority roster you have to wait your turn to work your way up through the seniority list to get the better jobs. They want the better jobs now, and so there's a lot of looking at themselves only in that thinking, and that's part of the problem and so it is difficult. One of the biggest problems that we face though is that when the big corporations that were unionized in the Northeast especially, the woolen mills and all of the shoe shops and all those companies in the Northeast, New England, they moved those companies to the South to get away from the trade unions. They left all that millions of dollars of infrastructure behind, right, so that they could get cheap labor. And then when the union trade movement caught up with them, they moved them offshore and so all the big businesses left and all the good union jobs have gone with them. And it's unfortunate but they've been able to outsource, and they've been outsourcing since the '40s and '50s and taking all the good jobs from the United States so that they can make more money. And even today around the world, they've moved their businesses to China and other places where wages are catching up, and now they're moving to even poorer countries in Africa and other places to do the same thing. And so eventually it'll stop, but probably long after we're all gone.
On June 17, 2017, the AFL-CIO issued a legislative alert to U.S. Senators regarding Trump’s nomination of Marvin Kaplan and William Emanuel to fill the vacant seats on the National Labor Relations Board (NLRB).
In the alert, Emanuel is noted for representing the “…notorious union-busting law firm Littler Mendelson,” and Kaplan’s, “…sole experience with labor law is on a policy level, drafting legislation to weaken worker protections…”
Read the entire letter from the AFL-CIO
Download PDF of letter HERE
A Senate committee may vote on these nominations as early as tomorrow, July 19, 2017 –
so contact your Senator today:
Visit the SMART TD Legislative Action Center (LAC) to call your Senator and voice your opposition to these nominations.
On Tuesday, July 18, the Chicago Tribune outlined how Trump seeks to dismantle unions in America.
From overtime rules to worker protections, 5 ways Trump is shifting labor policy
By Alexia Elejalde-RuizContact Reporter
Whether you call it a weakening of worker protections or an easing of over-regulation, labor policy is in the midst of a shift under President Donald Trump's administration.
A Senate committee is set to vote Wednesday on nominees to the National Labor Relations Board who would give the agency a Republican majority expected to reverse major pro-labor decisions issued during the presidency of Barack Obama.
Meanwhile, the Department of Labor is expected to scale back Obama-era plans to extend overtime eligibility to millions more workers. Several pro-worker regulations have been scrapped or delayed. And, in a sharp reversal from the prior administration, the government is backing the employer's position in a Supreme Court case on mandatory arbitration agreements that prohibit workers from filing class-action lawsuits.
To Peter Steinmeyer, an attorney in the Chicago office of Epstein Becker Green who represents management in employment cases, the developments reflect a predictable swing of the pendulum back to the pro-business right that occurs when Republicans take the White House from Democrats.
"The Trump administration isn't going to do anything out of line from what we have seen in prior Republican administrations," he said. One exception, he said, may be that Trump is at odds with many business leaders in his quest to reduce immigration.
But Celine McNicholas, labor counsel at the left-leaning Economic Policy Institute, said the changes, plus proposed deep cuts to the Labor Department's budget, are alarming. While budget tightening and pro-business policies are to be expected with a Republican White House, the size and targets of the cuts and the number of rules being rolled back are "not business as usual," she said.
"If you consider all that, I would argue that the first six months of the Trump administration have been devastating for workers in this country — unprecedented even," said McNicholas, who served as special counsel at the NLRB during the Obama administration.
Here are five labor policy developments that have taken place in recent months:
Overtime threshold redo
Trump's Labor Department filed a brief in federal appellate court late last month indicating it will not advocate for the overtime changes set by the Obama administration.
Those changes would have required nearly everyone paid less than $47,476 a year to be eligible for time-and-a-half pay when they worked more than 40 hours a week, a big jump from the $23,660 threshold in place since 2004 and a cornerstone of the Obama administration's efforts to lift wages.
A federal judge in Texas blocked the rule a week before it was scheduled to take effect Dec. 1, and Obama's Labor Department appealed.
The brief filed by the Trump Labor Department on June 30 states that the agency will seek public comment on a new salary threshold. That means a more modest increase could be in store.
"The betting is that it will go from $46,000 to somewhere in the mid-30s," said Brian Bulger, an attorney in the Chicago office of Cozen O'Connor who represents employers. "$33,000 is the big over-under."
National Labor Relations Board appointments
Trump's nominees to fill two vacancies on the five-member NLRB would give the agency its first Republican majority since President George W. Bush was in office, potentially tilting the board toward more employer-friendly stances.
The NLRB, an independent agency tasked with enforcing federal labor law related to collective bargaining and unfair labor practices, came under fire during the Obama years by Republicans who thought the board's Democratic majority was pushing a pro-union agenda, and those critics have been eager to undo some of its major decisions.
Those decisions include allowing employees to form "micro unions" with smaller bargaining units, and finding that graduate students working as teaching assistants at private universities are eligible to unionize. In perhaps its most controversial move, the board expanded the circumstances under which a company can be held liable for labor conditions under one of its subcontractors or franchisees, a decision with big implications for employers like McDonald's.
"A lot of these decisions are going to be reversed and it's probably just going to be a matter of time," Steinmeyer said, though it could take a while for relevant cases to come before the board.
Trump's nominees to the NLRB, Marvin Kaplan and William Emanuel, faced concerns from Senate Democrats at a hearing last week that they will be biased in favor of employers. Emanuel is a longtime labor lawyer representing management at Littler Mendelson, one of the nation's largest employment law firms. Kaplan recently worked as counsel for a House committee that proposed legislation to make it harder for workers to unionize.
The Republican-controlled Senate Committee on Health, Education, Labor and Pensions is scheduled to vote on the nominees Wednesday.
Labor Department budget cuts
Trump's proposed budget includes a 20 percent cut to Labor Department funding, from $12.1 billion to $9.7 billion. Most would come out of workforce training programs that the White House said should be funded more by states, localities and employers.
Some parts of the agency would get a funding bump, notably a 22 percent increase for the Office of Labor-Management Standards, which investigates misconduct in private-sector unions.
Although Trump's budget proposal does not increase funding for apprenticeships, he signed an executive order that calls for more than doubling the amount of federal grant money available to such programs, while cutting the government's role in monitoring them.
With the aid of Republican lawmakers, Trump has rolled back several rules and executive orders that Obama issued to protect workers.
Among them were the Fair Pay and Safe Workplaces rule, which barred companies from receiving federal contracts if they had a history of violating wage, labor or workplace safety laws. Another rescinded rule established parameters for when states can drug-test applicants for unemployment insurance benefits.
The Labor Department is in the process of rescinding the "persuader rule," which would have required law firms to publicly disclose any work they do for employers surrounding union organization efforts.
Meantime, the Occupational Safety and Health Administration has delayed three workplace safety rules issued during the last year of Obama's presidency, raising questions about whether they will be weakened or rescinded.
The rules would require certain employers to submit injury and illness data electronically to OSHA for publication on the agency's website; tighten exposure standards for silica, which is often breathed in by certain construction workers and linked to lung disease; and lower workplace exposure limits for beryllium, an industrial mineral linked to lung cancer.
About-face on mandatory arbitration
A significant workplace issue before the Supreme Court is whether employers may require workers to sign arbitration agreements that waive their rights to file class or collective actions should a dispute arise, an increasingly common practice. The NLRB has held that the agreements violate workers' rights, and Obama's solicitor general in November filed a petition supporting the NLRB in a case involving Murphy Oil, one of three cases the Supreme Court is reviewing on the issue.
In June Trump's acting solicitor general filed a brief with the court that took the opposite stance, asserting that mandatory arbitration agreements don't violate the National Labor Relations Act and are enforceable under the Federal Arbitration Act.
Such an about-face is unusual, legal experts say, though how much it influences the court's analysis remains to be seen.
"While the government's opinion is normally very important, I'm sure the judges will be taking a look at the fact that this only changed because there was a change in administrations," Bulger said.
COORDINATED BARGAINING GROUP UNIONS SAY CONTRACT NEGOTIATIONS TAKE A “STEP BACKWARDS”
July 7, 2017
As part of our ongoing effort to conclude national contract negotiations, the Coordinated Bargaining Group (CBG) met with the nation’s freight rail Carriers (NCCC) for three days during the week of June 26th. These efforts were part of our ongoing mediation process, mandated by the Railway Labor Act when the parties have been unable to reach a voluntary agreement, and managed by the National Mediation Board.
Despite the CBG’s best efforts to reach a fair agreement with the NCCC, the mediation process took a step backwards on Thursday, June 29th, when the Carriers presented new, onerous bargaining positions. Their new contract demands would have the employees not only paying more per month towards their monthly insurance premiums, but would also make drastic changes in the amount the average employee pays when medical services are needed. Combined with the Carriers’ outlandish demands for this dramatic cost-shifting, they suggested we agree to below-standard General Wage Increases with no retroactivity, and, for certain crafts, harmful work rules changes that would have employees doing more work for less pay in many circumstances.
It is clear from the Carrier’s latest contract demands that they are emboldened by the potential of management-friendly recommendations that could come from a Presidential Emergency Board appointed by President Trump, and ultimately be imposed on the employees by a Congress that already has enacted or is pushing for changes in longstanding labor laws that protect employee rights.
We of course are frustrated by the Carriers’ hard-line attitude. But we will not let this stand in our way. In spite of this latest turn of events, the CBG will not give up its efforts to achieve a voluntary settlement that is fair and protects our members’ best interests. We therefore requested and have been granted additional mediation sessions later this month. This is not by any means the end of the road. The Railway Labor Act makes it the duty of both labor and management “to exert every reasonable effort to make agreements.” We take that obligation seriously. Be assured that we have been working very hard on your behalf and we will continue to pursue every available avenue to achieve a fair contract settlement worthy of your consideration.
The Carrier’s latest offer is neither a fair settlement, nor a settlement that we expect our members would ratify. So that you all are fully aware of what has been proposed, and in an effort to bring all affected members up to speed, the Carrier’s latest proposal, with a brief synopsis, can be found in the PDF below.
More information will be forthcoming after the mediation sessions scheduled later this month. We appreciate your continuing support.
United Transportation Union - SMART
Kansas Legislative Director
523 SW VanBuren Suite 100
Topeka, Kansas 66603
The News that's relevant to you.