BY BILL ARTH
NEW YORK - Over the last decade, a series of mergers has reduced the number of major railroads in the United States from around 40 to just 4. Meanwhile, the number of rail workers has dropped 59 percent since 1980.

The latest step in this process was the decision of CSX and Norfolk Southern (NS) to split Conrail between them, after a seven-month battle over who would acquire the carrier. On April 8, CSX and NS revealed the initial details of their plan to split Conrail. CSX will pay $4.3 billion for 42 percent of Conrail's assets, and NS will pay $5.9 billion for the remainder. They will divide up most Conrail lines, and jointly operate a shortline "feeder" railroad in New Jersey, probably to be called Conrail. They are expected to file the terms of the agreement in June with the Surface Transportation Board (STB), the governmental body that must approve railroad mergers. A ruling on the proposal could take up to a year.

The expense of the acquisition has led credit agency Standard and Poor's to place all three companies on "CreditWatch with negative implications," while it carries out an analysis to "compare operating benefits expected to accrue to each company with the need to service approximately $2 billion of Conrail debt, in addition to each company's acquisition-related debt."

Some analysts predict that there will now be mergers that will reduce the industry to two transcontinental railroads, with moves by Burlington Northern Santa Fe and Union Pacific in the western United States to acquire NS and CSX.

Conrail was the product of a government takeover of six bankrupt northeast railroads in 1973. Some $7 billion dollars in government subsidies were poured into Conrail to rebuild its infrastructure, which had been allowed to deteriorate by its former owners while they invested their capital in real estate and other speculative ventures. In 1981, Conrail lost over $1.5 billion. By 1984, it turned a profit. In 1987, the 85 percent government stake in Conrail was sold for $1.6 billion, and it became a private corporation.

Along the way, Conrail reduced its workforce from 96,000 in 1976 to 23,500 today. They forced deep concessions in union contracts, and abandoned thousands of miles of track, leaving many former customers without service. In the fourth quarter of 1996, Conrail reported profits of $147 million on revenues of $943 million. Over the course of the bidding war between NS and CSX, Conrail management campaigned to win Conrail workers to support a merger with CSX. Conrail chairman David LeVan sent a letter to Conrail employees last December stating, "We have structured this transaction to ensure that the new company will be our new company - one in which we have a strong and equal voice." The bosses ran newspaper ads, sent letters to employees, and organized a "demonstration" in support of CSX at a special shareholders meeting on January 18.

Layoffs projected
With the latest turn of events, many Conrail management jobs will be eliminated. The 2,926 non-union employees will divide up $1.15 billion in severance pay. LeVan has negotiated a $22 million "golden parachute" for himself. The 79 senior managers will get about $1.5 million each; 1,187 midlevel managers, secretaries and nonunion engineers will get an average of $420,000; and the 1,659 nonunion employees expected to remain with the new railroad will get bonuses averaging $300,000.

Meanwhile, Conrail's union workers are left wondering if they will have a job, and if they do, for whom and under what working conditions. In recent weeks, Conrail has gone on the offensive against workers in Northern New Jersey with the elimination of brakeman positions on most of the jobs that still had one, the cancellation of on-the-job training for new engineers, a push to speed up work, and layoffs of many recently hired workers.

Similar concerns are being raised by NS and CSX workers. CSX management recently explained that it was demoting two new engineers in Miami because the Florida Business Unit was spending too much and had to save money for the merger. CSX wanted them to move to West Virginia to keep working as engineers.

George Queen, who had to move from the Midwest to Florida to get a job with CSX, said, "Well if they can do this to me, they can do it to Conrail workers too."

In one of its many "cost-cutting" measures, NS has ended the practice of stocking engines with "crew packets" containing paper towels, toilet paper and trash bags. Now, crew members must go to a mechanical supervisor to check them out. "Sure, they've got billions of dollars for Conrail, but not enough to give us adequate paper towels for the trips," a conductor in Salisbury, North Carolina, declared.

The loss of union jobs due to rail mergers is covered by federal regulations codified in the New York Docks Agreement. Under these regulations, laid off workers who meet stringent criteria may be eligible for pay and benefits for up to six years if they lose their jobs. A statement by the New York AFL-CIO pointed out that it is "extremely difficult for employees to obtain such benefits if the carrier contests their eligibility."

A recent notice to the members of UTU Local 1445 in New Jersey explained, "Under the provisions of the New York Dock Agreement, any guarantee that you may be entitled to will be determined by your earning performance of the twelve months immediately preceding the official turnover of our employer Conrail to the CSX. The purpose of this notice is only to make you aware that your protections will be determined by how much you work, in other words, `make hay while the sun shines.' "

Bill Arth is a member of UTU Local 1447 at Conrail in New Jersey. Also contributing to this article are: Kay Sedam, member of UTU Local 113 and engineer for CSX in Miami; Ruth Nebbia and Lee Oleson, recently laid off by Conrail in New Jersey; and Jane Roland, member of UTU Local 783 and engineer for NS in Salisbury.  
 
 
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