Striking Final Blow at Amtrak?
If a strike comes next week, the beleaguered rail service may not survive the shutdown.
Amtrak is still riding the rails - for now.Skip to next paragraph
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But a strike - originally scheduled for today - could shut down rail service as early as next week if the nation's long-distance passenger railroad can't reach a settlement with a key union.
Because this union maintains Amtrak tracks, bridges, and buildings, a strike could also halt the commuter lines that ride on Amtrak's rails - stranding as many as 600,000 daily riders, mostly in the Northeast.
But a strike could also deal a death blow to the concept of long-distance rail service. Amtrak critics, including prominent US lawmakers, say that the train service has not proved its worth in the marketplace - and that it could not have survived as long as it has without $19 billion in federal funds. They now demand substantial reforms in return for bailout funding.
Even so, the prospect of hundreds of thousands of commuters jamming the roads or buses already has local officials lining up alternative bus service and asking President Clinton to intervene. For the Northeast Corridor and other long-distance routes, however, there would be little relief.
"In the short term, we could see a lot of people cancel trips or overload the airlines," says Ross Capon of the National Association of Railroad Passengers in Washington.
The labor disruption comes at a critical time for the railroad. Just to meet its payroll, Amtrak is borrowing money from commercial banks. A strike, unless it is short, could force the railroad to close down permanently. "If it goes several days, we could face a liquidity crisis," says Amtrak spokesman Cliff Black.
Negotiations with the union have stretched for three years. Earlier this year, a Presidential Emergency Board recommended that Amtrak pay its unions 3.5 percent more per year, retroactive to 1995. The total wage package would cost $25 million in 1998. Next year, the railroad's other 11 craft unions will negotiate contracts. If they get the same package, Amtrak's expenses would rise by $136 million per year.
Even if it gets past the immediate problem, Amtrak faces serious funding problems. Its own financial plan estimates a $100 million loss for 1998. In February, Amtrak's management predicted the railroad would go into bankruptcy by mid-1998 if it did not get some financial relief from Congress.
But that financial relief is not close. Congress is giving Amtrak an operating subsidy of $202 million, about the same as last year. After shelling out $19 billion in subsidies for Amtrak over the past 25 years, Congress is in no mood to continue the largess.
In fact, the House this session used a carrot-and-stick approach with the railroad. The carrot: a $2.3 billion bill to provide Amtrak with funds for capital projects and debt reduction. The stick: Amtrak gets the money only if Congress passes a reform bill that cuts Amtrak free of many federal mandates.
For example, the bill would allow the railroad to renegotiate the unions' severance-pay package. Currently, if Amtrak shuts down a facility, it must pay the laid-off workers (or workers who would have to travel more than 30 miles to a new rail job) as much as six years' full wages and benefits.
The provision dates back to Amtrak's origins in 1970. "Unions felt Amtrak as set up by Congress was a prescription for failure," says Mr. Black. To convince skeptical unions to go along, Congress awarded them big severance packages.
But if Amtrak goes belly-up, those severance agreements may not be worth much. The US General Accounting Office sent a letter Monday to Rep. Bud Shuster (R) of Pennsylvania, chairman of the House Committee on Transportation and Infrastructure. It says the US "would not be liable" for the labor-protection obligations in the event passenger service is partially or completely discontinued.
It's hard to predict how the Brotherhood of Maintenance of Way Employees will react to the mounting pressure. In bargaining, union officials have been adamant in asking for raises. "We are still far apart on the issues," says Amtrak's Black. The union's bargaining agent did not return phone calls.
In the event of a rail strike or a shutdown, the airlines say they can almost double their capacity on shuttle flights. But Amtrak carries 35,000 passengers per day along the Northeast Corridor - far more people than shuttles can manage.
Local officials are trying to minimize the chaos. New Jersey Transit has lined up 400 extra buses to get commuters to a light-rail operation. The Long Island Railroad was working out an arrangement with the unions to continue using Amtrak rails. At press time, however, these arrangements were not firm.