KANSAS CITY (B)--The United Transportation Union, the largest on behalf of rail workers on this continent, is fighting the proposed combination of Canada's Canadian National with the U.S.' Burlington Northern Santa Fe to form the largest rail company in North America, The Journal of Commerce newspaper reports.
The newspaper's online edition said UTU President Charles Little told an annual meeting of his union's international officers that the UTU would continue to fight the merger. This is the first major union to publicly oppose the CN-BNSF combination, the JOC story added.
And it quoted Little saying there was "a world of opposition in Washington against this merger," and there had never been this much opposition to a rail merger this early in the process.
Separately, JOC reported that the newspaper ad signed by chief executives of 4 other top rail companies, in which they urged rail customers to fight the merger, was part an effort by rail rivals to delay the merger rather than kill it.
That ad ran Jan. 11 in various newspapers, including JOC, on behalf of the heads of Union Pacific, Canadian Pacific, Norfolk Southern and CSX. The smallest of this top tier of rail companies, Kansas City Southern, was not included, and the JOC story quoted the KSC chief as saying he was not asked about the ad.
The story cites unidentified executives saying that if the CN-BNSF regulatory approval process is stretched out that would give time for NS and CSX to recover from the congestion after their carve-up last summer of the Conrail network in the U.S. Northeast and Midwest, and for UP to finish smoothing out its earlier merger of Southern Pacific across the western U.S.
The UP-SP merger led to a massive rail service failure in 1997 and 1998. US regulators approved the UP-SP deal in seven months, while the Conrail joint acquisition and split-up by NS and CSX took 13 months. But regulators may take up to 31 months to issue a final decision.
BNSF and CN Jan. 10 issued a press release in response to the newspaper ad, emphasizing that their combination would bring benefits to rail freight shippers and would not bring some of the risks of other recent mergers.
"Our combination is both different from other recent railroad consolidations and is low risk," BNSF Chief Executive Officer Robert Krebs pointedly noted. "it is essentially a no-overlap, end-to-end joining of two companies sharing a common technology platform." He added that "this is not a situation where a parallel competitor is eliminated, as existing railroad is divided or key personnel are eliminated."
The UP-SP merger erased a parallel competitor and cut many SP workers, but UP later had to boost hiring when it bogged down. In both the division of Conrail and the SP acquisition, some of the problems stemmed from trying to merge rail operations that used differing technologies.