A proposed merger between two of the largest rail carriers in the country is sparking concern among rail workers and anti-monopoly activists.
Union Pacific Railroad, the largest railroad in the United States, announced in July a $85 billion plan to acquire Norfolk Southern, the second largest railroad in the Eastern United States. More than a dozen unions represent workers at one or both of the railroads.
The Sheet Metal, Air, Rail and Transportation Workers-Transportation Division (SMART-TD) initially said it would oppose the merger when it comes before the Surface Transportation Board for approval, but later reversed course. SMART-TD, which is the nation’s largest railroad union, said it was concerned the merger would harm labor relations, service quality, and worker safety.
Norfolk Southern has made improvements in labor relations, prioritizing transparency and workforce retention, SMART-TD said. “Folding it into a UP-led structure raises the risk of reversing these advances,” the union said.
But on Sept. 22, SMART-TD announced it supported the merger thanks to a job protection agreement reached with Union Pacific. The agreement guarantees that SMART-TD members in train and yardmaster service will have job protection for the duration of their careers and will not face involuntary furloughs because of the merger. The agreement also includes preferential hiring for affected terminal employees. SMART-TD spokesperson Dan Banks said the agreement protects members at both Union Pacific and Norfolk Southern, where SMART-TD represents a combined 15,000 workers.
International Association of Machinists (IAM) District 19, International Brotherhood of Electrical Workers, Brotherhood of Railway Carmen, International Brotherhood of Boilermakers, and SMART-Mechanical Division wrote in a Oct. 1 letter to Union Pacific that they were jointly coordinating a response to the merger.
“Union Pacific has asked for labor’s endorsement of this proposed merger. Before we can consider such a request, we must ensure that the interests of our members are fully protected. Our priority is securing ironclad job protections and safeguards for the men and women we represent,” the union leaders wrote. A meeting between the unions and Union Pacific was scheduled for Nov. 18, IAM District 19 President Reece Murtagh said.
The Transport Workers Union (TWU), which represents Norfolk Southern workers but not Union Pacific Workers, publicly opposed the merger as soon as it was announced, citing Union Pacific’s “shameful” safety record.
“There is no world where Union Pacific should be controlling a coast-to-coast rail network,” TWU International President John Samuelsen said in a press release. “A supersized Union Pacific would be catastrophic for TWU rail workers, shippers, and the safety of millions of Americans who live and work near freight rail lines.”
Union Pacific has nearly 33,000 employees and runs nearly 33,000 miles of railroad across 23 states in the Western United States. Norfolk Southern has 20,000 employees across 22 states in the Eastern United States. The merger would create the first transcontinental railroad network in the country.
Railroad Workers United, a solidarity caucus of rank-and-file rail workers, issued a resolution opposing the merger in August, citing negative impacts of past mergers of Class I rail carriers. Class I is the largest of three classes of railroads, with annual revenue of more than $1 billion. The U.S. rail industry has been consolidating for decades: There were more than 30 Class I freight rail carriers in 1980; today there are six.
Alex Nantell, a signal maintenance worker for Union Pacific in Portland and member of Railroad Workers United, said the merger would only benefit shareholders.
“It will not in any way help mitigate safety concerns,” Nantell said. “It will not in any way help out with workforce retention, or having ‘good American jobs.’ And it’ll give the railroads, which already have an inordinate amount of power, significantly more power.”
Union Pacific and Norfolk Southern said the merger would “unlock approximately $2.75 billion in annualized synergies” between increased revenue and cost savings.
“How many livelihoods or families does that ruin because that means they’re not paying someone a wage to work?” Nantell asked.
Competitor railroads Canadian National, Canadian Pacific Kansas City, and BNSF Railway have launched campaigns against the merger. Railroad Workers United and other critics have said the merger would likely spur BNSF and CSX to merge, resulting in just four rail corporations controlling “not just the industry, but the infrastructure as well.”
The Surface Transportation Board, a five-seat board appointed by the president, will review the merger proposal. The board currently has three members, with one position vacated in August when Trump fired Robert Primus. Primus filed a lawsuit challenging his firing in October.
The railroads haven’t submitted the full application yet, but are expected to do so before the end of the year. After that, it will be a year before the board issues a final decision.
