THE CARRIERS’ “RAIL FACTS” ARE “ALTERNATIVE FACTS”
The recent political season saw many references to “fake news” and “alternative facts.” Whatever your political persuasion, the prime provider of “fake news” and “alternative facts” regarding this round of national bargaining is railroad management. Every so often, rail management puts out a statement on the employee web portal trying to explain how well paid you are and what nice guys railroad management really are. They pride themselves on the wage settlements from the last two rounds as “the right thing to do” as though Union solidarity had nothing to do with it. However, in this round, management says you “make too much” and you must tighten your belts so that CEO’s and stockholders can continue to rake in the record profits made by railroads over the past 10 years. Well, there’s a good place for rail management’s “fake news” – it’s called a trashcan.
Management’s Fake News: the last two contracts increased wages 42% but we can’t afford that this time and anyway, you still make good wages.
The Union’s Real News:
The 2007 National Agreement increased wages on average 1.2% per year above inflation; the 2012 National Agreement increased wages on average 1.6% per year above inflation. Those real wage gains simply made up for the lost wages under PEB 211 and PEB 219 over 20 years ago. The truth is that rail workers today are stuck at the same standard-of-living as their brothers enjoyed 40 years ago!
Our current proposal has a net annual wage increase of 3.2%. The annual inflation rate is trending at around 2.5%. The Union’s wage increase is reasonable, promotes real wage gain and is in line with rail management’s ability to pay. Rail management’s wage proposal provides no back pay and a net annual wage increase of 1.5%. Under that proposal, rail workers would be worse off at the end of the contract than they were 40 years ago in real wage terms.
Railroad management states that wages in the railroad industry are higher than average. Of course they are; and this has been the case forever. Rail workers make more than other workers in retail and many other industries which have a higher percentage of unskilled workers. The level of pay in our industry is purely a function of the mix of the high level skills it takes to run a railroad.
According to management, the minute we get our heads above water, we should be pushed down again. Won’t happen this time.
THE FINANCIAL HEALTH OF THE RAIL INDUSTRY
Management’s Fake News: we are in a “prolonged” industrial recession and car loadings in 2016 dropped from 2015. We’re poor and hungry, please donate some of your wages to help us out.
The Union’s Real News:
Total car loadings for the “Big 4” (UP, BNSF, CSX & NS) are up 5% comparing February 2016 to February 2017. Coal is up 20% in that period.
The composite operating ratio for the Big 4 was 66.1 in the 2016; in 2014, it was 67.7, a drop of 1.6%. That drop was worth $1.1 billion per year to the railroads. In 2005, the composite ratio was 80.9 and in 2010 it was 71.8. The financial position of the railroads is much stronger now than in the years preceding the last two rounds of bargaining.
Railroad profits in 2005 were $4.9 billion; in 2015 it was $14.5 billion - the best year in the history of the railroads Labor expense as a percentage of total freight revenue fell from 29.5% in 2005 to 24.2% in 2015 with a similar sized workforce. By any reasonable measure, the railroads are doing well and the last two agreements did nothing to impede their improving financial performance.
In 2005, the average dividend per share of CSX, UP and NS stock was 22 cents. (BNSF is part of Berkshire Hathaway and not reported separately – however if Warren Buffet owns you, that means you are valuable as well.) In 2016 it was $1.57. Railroads have been buying back shares from shareholders as well. These 3 railroads alone have spent over $30 billion in stock repurchase programs over the past 10 years. The total return to shareholders from 2004 to 2015 increased 271.5%, far outpacing the performance of the S&P 500.
Management’s Fake News: Your benefits are much better than the average workers, including Walmart workers. You should pay more for your healthcare and have some “skin” in the game. Oh, and it was the Affordable Care Act’s (ACA) fault.
The Union’s Real News:
The ACA increased costs a total of $438.1 million from 2011 to 2016. 79% of that amount went towards the coverage of your kids until age 26 and expansions of preventive care outside of cost-sharing. We think providing good insurance for rail worker’s kids is important, but apparently management doesn’t. Despite these costs, railroad workers’ health plan costs have increased less than the average worker’s. In fact, the railroads’ health care costs have risen 55.5% over the past 16 years, while other employers’ generally absorbed an increase of 81.8%. Compared to others industries, railroads’ healthcare cost have risen modestly.
In 1984, healthcare cost the railroads $.0014 per ton mile. In 2015, that figure was $.00156 per ton mile. Healthcare costs per ton-mile have been stable for over 30 years. There is no looming crisis.
The 2012 National Agreement provided the railroads $90 million in annual healthcare savings. The Union’s proposal this time, which includes putting the networks out to competitive bid for the first time in 20 years, provides over $130 million in annual savings, most of which comes from the medical vendors not the railroad workers’ pockets. Ours is a “mainstream” proposal that will reduce costs without creating financial hardship to rail workers.
THE BOTTOM LINE – YOUR UNION FIGHTS FOR GOOD HEALTHCARE AND REAL WAGE GAINS – IT’S WHAT WE DO AND WHAT YOU DESERVE
National Bargaining for the round beginning November 2014
As you may know, another round of National Bargaining has resumed and will proceed through the coming weeks, months, and probably years that lie ahead. The BMWED and the National Carriers' Conference Committee have each presented their Section 6 notices as prescribed under the Railway Labor Act, effectively commencing this next round of bargaining. Meetings between union and carrier officials are being arranged in earnest.
This upcoming round will not be without its fair share of challenges, especially in the realm of health insurance, but your BMWED officers are prepped and prepared for the negotiation. National bargaining is among the most important duties of this union, and your elected BMWED officers stand ready for the negotiations. The Pennsylvania Federation will do our best to post in real time information relevant to this process.
We encourage you to visit and familiarize yourself with the issues.
April 7, 2017
The latest Town Hall featuring Front Line Communicators Anthony Crockett, Randy Brassell, Unified System Division Vice Chairman Rene Perez, BMWED President Freddie Simpson, Vice President David Joynt and Assistant to the President Peter Kennedy.
We received hundreds of questions from membership after the latest National Bargaining town hall meeting. In an effort to keep this video reasonable in length, we were not able to address every question. However, we plan to have more Town Halls in the near future and intend to answer all questions as they come in.
March 23, 2017 -Coalition flyer - Norfolk Southern's James Squires. Profitable and Rich.
March 1, 2017
March 1, 2017 - National Negotiations Update:
The BMWED-SMART/Mechanical Bargaining Coalition again met with the National Carriers’ Conference Committee (NCCC) and the assigned federal mediator on Tuesday, February 28, 2017. At that meeting the railroads provided an unacceptable and regressive “response” to the Coalition’s proposal made on February 7th. The carriers’ “response” can be found here.
The NCCC’s proposal is identical to their September 14, 2016 proposal, except for a worse wage package. The NCCC now proposes that all wage increases will be prospective, beginning with the first one occurring the date a contract is signed. In other words, the NCCC proposal contains no back pay and delays any wage increases until the agreement is signed. The percentage wage increases under that offer remain at 2%. The NCCC proposal simply repeated their September proposal that would subject a family to up to $5000 in annual out-of-pocket expenses, plus other deductibles and doctor and prescription co-pays.
The carriers continue to justify their recent proposal on the basis of their time-worn, “railroaders earn too much and they have too good of benefits” and “railroads are struggling financially.” When asked about the NCCC’s February 28th proposal, President Simpson pointed out, “BMWED members and other railroaders are not over-paid and they deserve the benefits that they have. Our coalition (and the TCU coalition) made the decision to provide a bargaining proposal that would result in a respectable amount of real wage increases, improved paid time off, away from home expenses, job security and affordable health care benefits. Our proposal should serve as a basis for a voluntary agreement. But it is clear that the railroads intend to take more from railroaders by making them pay more for their healthcare. We are going to meet again for mediation in a few weeks, and I would hope that the railroads reconsider our February 28th proposal.”
Mediation is scheduled to resume March 14th and 15th. Further information about bargaining will be forthcoming as it develops.
March 1, 2017 - The Carrier's response to our February 28, 2017 mediated bargaining session.
February 7, 2017, the BMWED-SMART/Mechanical Bargaining Coalition presented a new bargaining proposal to the railroads in an effort to reach a voluntary agreement. The essence of our February 7, 2017 proposal is:
1) General wage increases of a net annual increase of 3.3% per year over the term of the contract;
2) No change to the employee monthly cost-sharing on healthcare ($228.89);
3) Improved dental and vision benefits; increased amounts of active life insurance coverage as well as increased amounts of accidental death and dismemberment coverage and off-track vehicle coverage;
4) Improved away from home expenses (meals, lodging, headquarter and travel allowances); increased paid time off (vacation and personal days as well as lowered eligibility requirements for qualifying for vacation);
5) Lowered service requirements for February 7, 1965 Employee Protections (5 years of service instead of 10);
6) Health and welfare plan design changes involving increased physician and prescription drug co-pays, increased deductibles, coinsurance and out-of-pocket maximums and a re-bid of the network providers for the entire Plan.
The total net yield of our proposal is $32,986 when applied to the weighted average BMWED hourly rate of pay. The actual yield will be more or less based upon your rate of pay and the amount of overtime worked. The details of the February 7, 2017 bargaining proposal can be found here.
To avoid radical plan design changes proposed by the Carriers during this round of negotiations, the BMWED adopted a different strategy to healthcare bargaining focusing on more efficient and cost-effective administration of services. We found over $100,000,000 in annual savings to the National Plan through that exercise. We made our initial proposal in March of 2016, noting that it neither cost a single railroad employee or the railroads one cent more to maintain current level of health benefits. Although the Carriers’ healthcare expert confirmed our findings, the Carriers said that any voluntary agreement must include health and welfare benefit plan design changes. Their position in this regard was enhanced by the November 2016 election results.
After the election, the railroads terminated negotiation conferences with the Coordinated Bargaining Group and the BMWED-SMART Mechanical Bargaining Coalition and requested mediation. This moved us closer to presenting our case to a Presidential Emergency Board (PEB). A PEB is appointed by the President and consists of three or more individuals who investigate the report and offer recommendations for its settlement. History has shown that if the bargainers reject that recommendation and strike, its terms will be imposed by an Act of Congress. In other words, once the dispute goes before a PEB, the parties lose effective control of how their bargain will be structured. Accordingly, reaching a voluntary agreement is rail labor’s best possibility to securing a respectable contract during this round of national negotiations.
To this end, on February 1, 2017, BMWED National Division Officers and the various participating System Division and Federation General Chairpersons gathered to discuss our next steps in bargaining. They made the decision to present the February 7, 2017 bargaining proposal, as yet another attempt to reach a voluntary agreement that would result in a respectable amount of real wage increases in the pockets of membership, while avoiding a likely disastrous PEB. Your National Division Officers and General Chairpersons are not alone in this decision. Indeed, another rail bargaining coalition has reached the same assessment and is slated to present a similar wage raise and health and welfare benefit proposal that mirrors the BMWED-SMART Mechanical Coalition’s. Once this is presented, over 40 percent of rail labor will be standing together at the bargaining table with regards to healthcare and wages. This sends a clear and powerful message to the railroads that rail labor is serious about bargaining to reach a voluntary agreement, and that we are standing together.
To date, the Carriers have not responded to our February 7, 2017 proposal. We are scheduled to meet with the Carriers and the mediator on February 28th and March 1st. We anticipate the railroads will respond to our proposal at that time. We will continue to try to reach a voluntary agreement that provides good wage increases, improved paid time off, improved away from home expenses, improved job security and affordable health care benefits.
I ask that each of you continue to urge your fellow union brothers and sisters to stay engaged with their union, and stay informed about bargaining. I also ask you to encourage your fellow union brothers and sisters of different rail unions to stand with us on our bargaining proposal.
National Carrier's Conference Committee's Section 6 notice and introductory letter, which includes the following passage. "Anachronistic work rules and practices that hinder our ability to give customers high quality, cost-effective service, or which add unnecessary costs, must be reformed." This should give some indication as to the direction this group of railroad bosses and their lawyers intend to pursue.