Nov 23, 2022
A new analysis shines fresh light on U.S. railroad giants' "greedy behavior"--from gorging on their own stock to ramping up fees to pad their bottom lines--as workers struggle for basic rights and benefits in ongoing contract negotiations that could result in the first national rail strike in decades.
Updated figures compiled by the watchdog group Accountable.US and released Tuesday show that BNSF, a subsidiary of billionaire Warren Buffett's Berkshire Hathaway that operates one of North America's largest railroad networks, saw its net income rise 4% to $4.4 billion during the first three quarters of 2022. Union Pacific, meanwhile, saw its profits jump 11% to $5.36 billion during that period.
"Big Rail has opted to impose record fees and shortchange their workers while continuing to enrich a small group of investors."
In those nine months, Union Pacific spent nearly $8 billion on stock buybacks and dividend payouts to shareholders, Accountable.US notes.
The rail transportation giant CSX reported a 37% surge in Fiscal Year 2021 net income, the watchdog added, and the company repurchased $3.7 billion worth of its own shares during the first three quarters of this year.
Rail workers haven't fared nearly as well as industry giants and their wealthy executives and shareholders. For the past three years, many rail employees have worked under increasingly grueling conditions without a raise as management continues to resist demands for changes to draconian attendance policies, better pay, and foundational quality-of-life benefits such as paid sick leave.
"The same wealthy rail industry executives that say they can't afford to pay their workers fair wages all had banner years in net revenue and shareholder giveaways," said Liz Zelnick, a spokesperson for Accountable.US. "The big rail industry's own earnings reports show they didn't need to cut corners on safety and gouge businesses with excessive fees that get passed onto consumers. It only adds up to one thing: greed."
"For years the industry gutted investments in maintenance and equipment, and when those decisions inevitably led to supply chain bottlenecks, the industry now refuses to take any responsibility," Zelnick added. "Instead, Big Rail has opted to impose record fees and shortchange their workers while continuing to enrich a small group of investors. If Congress has to intervene, it would make no sense to reinforce greedy industry behavior that would lead to a supply chain crisis right before the holiday season."
The new analysis was published a day after the largest railroad workers union in the U.S. announced that its members voted to reject a tentative five-year contract deal negotiated with the help of the White House. While President Joe Biden hailed the proposed agreement as a victory for both the rail industry and workers, many union members reacted with outrage to the specifics of the deal, which does not include a single day of paid sick leave.
"It is beyond belief that in the year 2022 rail workers in America have zero guaranteed paid sick days. Zero," Sen. Bernie Sanders (I-Vt.) tweeted Monday. "The rail industry, which made a record-breaking $20 billion in profits last year, must come to the table and negotiate a contract which treats their workers with respect."
Railroad Workers United (RWU), an inter-union alliance that supports public ownership of the U.S. rail system, noted in a statement Monday that "with votes now tabulated from every rail union, unions representing over half of rail labor have rejected their proposed contracts."
"Without a better contract for all railroad crafts, service will continue to suffer as rail carriers extract wealth and buy back their shares at the expense of the economy as a whole," RWU said. "Their systems, which were primarily built on public investment, no longer work for the benefit of the people. If rail carriers are fixated on paying out more for stock buybacks than they are for worker benefits, we will continue to see attrition as a once-stable career turns into a revolving-door job."
\u201cNEW: Railroad workers are telling Congress to stop doing the bidding of profitable & exploitative railroad companies.\n\n3 of the 5 largest rail unions rejected a tentative contract that gives workers 0 paid sick days.\n\nWorkers want Congress to improve the deal & save the industry.\u201d— More Perfect Union (@More Perfect Union) 1669065523
If rail unions and companies fail to reach a contract deal, a nationwide strike or lockout could begin as soon as December 9. The rail industry is urging Congress to intervene and force workers to accept a contract that they believe is woefully inadequate.
"Quality of life has suffered because of operating choices Class I railroads have made which embargo traffic, gouge customers, and cut the workforce," said Hugh Sawyer, RWU's treasurer. "This agreement does not address those underlying issues and, through yet-to-be-negotiated articles in the contract, it could exacerbate supply chain issues."
"Unless the labor issues are addressed," Sawyer added, "railroads will remain unable to move freight, and rail carriers will continue to profit at the expense of passengers, shippers, workers, and our national economy."
The fight over rail companies' punitive attendance policies and chronic mistreatment of employees is coming to a head after years of consolidation, sharp labor and equipment reductions, and other Wall Street-backed changes that have pushed workers to what they say is a breaking point.
As one BNSF rail worker toldVICE in September: "We do not have weekends. We do not have a routine or accurate schedule. Every day is the same for us. We never know when we will be going to sleep on any given day or night. Forty hours a week does not apply to us."
"That is why we are fighting back," the worker said. "That is why we want to strike. That is why we are asking Congress to NOT intervene in our legal process. This is why we need public support."
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