News / Unions demand transparency in UP takeover of NS, despite no job loss pledge

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Unions want “complete transparency” from the US Surface Transportation Board (STB) in its review of Union Pacific’s (UP) proposed acquisition of Norfolk Southern (NS).

Responding to news of the looming $85bn tie-up, the IAM Union rail division warned that the deal, while promising to “reshape the freight rail landscape”, raised “serious concerns about community safety, job security/workers’ rights, competition, and long-term industry stability”.

It added: “History shows that less competition is not generally in the interest of workers or customers.

“Mergers are lengthy processes, which should face serious scrutiny concerning overall impact to the entire industry, its customers and public communities where railroads operate. We’ll use every resource to ensure members’ livelihoods remain the focus of any approved merger.”

The union’s comments follow indications from both railroads involved and regulators that efforts to relax safety regulations may be the order of the day.

STB chief Patrick Fuchs appeared to upend more than two decades of precedent this year when he described the working interpretation of STB rules as “restrictive”, pushing for “a more pragmatic” approach towards rebuilding US infrastructure, and UP’s EVP of operations, Eric Gehringer, told investors the “lower regulatory backdrop” was leading to “definite momentum”.

During an investors call last week, he said: “The engagements we have had with the FRA [Federal Railroad Administration] have been effective and prompt, and what we’re trying to do now is to move as fast as possible, both as an industry and as regulators.”

He added that regulatory hurdles surrounding the implementation of new technologies were impeding improved rail safety “on not only our railroad, but all railroads”.

And during yesterday’s joint investor call with NS that announced the deal, UP CFO Jennifer Hamann stressed that “the deployment of state-of-the-art technology from both rails will create a safer, more efficient overall network”.

US railroads have also pushed to use one-person train crews, despite objections from unions over safety fears and job losses.

UP CEO Jim Vena did not touch on safety yesterda, but said: “All our union employees who have a job today will have jobs tomorrow in our merged company, and a company that is growing its business and spurring economic development creates even more jobs.”

Independent safety experts have stressed the need for a minimum crew size of two, and the Biden administration appeared equally on board with that assessment. The then transport secretary, Pete Buttigieg, riled rail operators by demanding passage of a sweeping heightening of rail regulations in the wake of the East Palestine derailment.

However, the Trump administration appears to have a different approach, supported by Association of American Railroads which told a federal hearing in 2022 there was “no evidence that two-person crews are safer than one-person crews”.