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"The railroads don't care about farmers, small businesses, supply chains, or their own employees," a union president said. "Their sole focus is boosting their bottom line, even if it means jeopardizing the entire economy."
Both of Canada's major freight rail companies—key cogs in North America's supply chains—locked out workers and shut down operations on Thursday due to a labor dispute over worker hours and conditions, as a union leader said the companies were holding the Canadian economy "hostage."
The unprecedented stoppage comes with high stakes for the 9,300 affected engineers, conductors, and yard workers—and the country's export-driven economy. The two companies, Canadian National (CN) and Canadian Pacific Kansas City (CPKC), own almost all of the tracks and haul more than $700 million USD worth of goods per day.
The Teamsters Canada Rail Conference, which represents the affected workers across both companies, said the two corporations had refused many of its "good faith" offers.
"Neither CN nor CPKC has relented on their push to weaken protections around rest periods and scheduling, increasing the risk of fatigue-related safety issues," the union said in a statement.
Paul Boucher, the union's president, said that "CN and CPKC have shown themselves willing to compromise rail safety and tear families apart to earn an extra buck. The railroads don't care about farmers, small businesses, supply chains, or their own employees. Their sole focus is boosting their bottom line, even if it means jeopardizing the entire economy."
🚂 The men and women who keep our CN and CPKC trains running want decent working conditions that ensure safety for us all🚨. It’s time to give them our support.💪#Canlab pic.twitter.com/bGXQC1yuo1
— Teamsters Canada (@TeamstersCanada) August 21, 2024
Boucher said in a video statement on social media that the companies were holding Canada's economy "hostage" in an attempt to get the federal government, led by Liberal Prime Minister Justin Trudeau, to force a binding arbitration agreement on the workers, an idea that business groups such as the Canadian Chamber of Commerce support.
So far, Trudeau's government hasn't done so and has instead pressured the two sides to come to a deal.
"Millions of Canadians, of workers, of farmers, of businesses right across the country are counting on both sides to do the work and get to a resolution," Trudeau told reporters Wednesday.
The Liberals, a centrist party, rely on the votes of the smaller New Democratic Party in Parliament. NDP was founded in part by organized labor and has warned Trudeau not to force the rail employees back to work.
"For too long we have seen Liberals and Conservatives interfere in these types of labor disputes to the advantage of the employer, to the detriment of the worker," Jagmeet Singh, NDP's leader, told reporters on Monday. "That is wrong, and we will oppose that."
In 2022, the U.S. federal government did take such action in a railway labor dispute. The U.S. Congress and President Joe Biden forced railworkers into an agreement that four key unions didn't agree to—angering many working-class Americans and progressive advocates, who argued that the right to strike had been nullified by the government intervention.
Canada has previously seen such federal interventions—or the threat of them, which can force workers' hand in negotiations—but in the past, disputes have occurred with just one of the major rail companies or the other, with their contracts expiring in alternating years.
This time, the timing has allowed for an industry-wide dispute, and a larger transportation disruption, including not just freight rail but also some passenger rail services that operate on lines owned by the two companies. There are no traffic controllers on the CPKC tracks, so passenger rail can't operate, The Canadian Broadcasting Corporation reported.
The companies have used the disruption as part of the rationale for government action. CPKC openly called for binding arbitration on Thursday, saying in a statement that an agreement is "not within reach" and that the union "continues to make unrealistic demands that would fundamentally impair the railway's ability to serve our customers with a reliable and cost-competitive transportation service."
The union argues that CPKC wants to "gut the collective agreement of all safety-critical fatigue provisions" and CN is trying to extend work days in western provinces, raising what the union calls a "a fatigue-related safety risk," The Guardian reported.
CN's net income for 2023 was $4 billion USD, while CPKC's was $2.9 billion USD.
"We need full compensation for the families and workers affected by the East Palestine train derailment—not a $3.6 million raise for its CEO," wrote Sen. Ed Markey.
Norfolk Southern CEO Alan Shaw got a large raise last year after the train derailment in East Palestine, Ohio that devastated that community. Shaw's total compensation rose by 37% in 2023, which put it at over $13 million for the year.
The train derailment occurred in February of last year and exposed the community to toxic chemicals that caused a large fire. Though there were no human fatalities, the wreck sparked grave public health concerns and the company has faced major criticisms for what have been described as lax safety practices.
Jonathon Long, general chairman of the American Rail System Federation (ARSF) of the Brotherhood of Maintenance of Way Employees Division of the International Brotherhood of Teamsters (BMWED), wrote about the problems with the rail company in a letter last year.
"I am writing to share with you the level of disregard that Norfolk Southern has for the safety of the railroad's workers, its track structure, and East Palestine and other American communities where NS operates," he wrote. "They gamble with your money, and you hold all the risk if they lose by putting a toxic train in the ditch in your community."
Sen. Ed Markey (D-Mass.) criticized Shaw's compensation raise in a tweet on Monday.
A year later Norfolk Southern is still more focused on its bottom line than the safety of the communities it serves. We need full compensation for the families& workers affected by the East Palestine train derailment—not a $3.6 million raise for its CEO. https://t.co/1h74XgSvBh
— Ed Markey (@SenMarkey) February 27, 2024
Shaw's compensation increase last year came despite the fact the company's net income decreased by 44% in 2023. The company also increased its spending on lobbying by 30% last year. A group of shareholders from the firm Ancora Holdings is trying to replace Shaw and other members of the company's management with new leadership, because it doesn't feel Shaw is leading the company in the right direction.
"It's alarming that the board rewarded Mr. Shaw with a massive raise and total compensation of $13.4 million during the same year he presided over industry-worst operating results, sustained underperformance, and a tone-deaf response to the derailment in East Palestine," the group told CNN in a statement. "This failure of corporate governance … reinforces the need for sweeping changes to Norfolk Southern’s well-paid board."
The Department of Justice sued Norfolk Southern for violating the Clean Air Act last year, and the Supreme Court ruled in June of last year that a former Norfolk Southern employee who alleged he developed colon cancer after being exposed to hazardous chemicals could proceed with a lawsuit.
It remains to be seen how long Shaw will be in charge of Norfolk Southern, but the company has certainly had a tumultuous year since the disaster in East Palestine, and it doesn't seem he's yet paid a major price for what's happened under his leadership.
"Mr. Shaw and his boardroom allies have no credible plan and no viable record to run on," the investors from Ancora told CNN.
In their respective campaign launches last fall, Dan Osborn and Zach Shrewsbury sounded themes once familiar to voters in their home states in the heyday of progressive populism, but not heard much lately.
The major parties on Capitol Hill like to boast about how much more “representative” their congressional delegations have become in recent years. But that’s only in the most-discussed categories of diversity—race, age, gender, ethnicity, and sexual orientation. Working-class Americans rarely end up in the halls of Congress. Fewer than 2% of Congress members had working-class jobs at the time they were elected.
Two working-class candidates hope to improve those numbers next year, by winning U.S. Senate seats in Nebraska and West Virginia, states currently represented by anti-labor politicians, but which were once bastions of a more populist, pro-worker politics.
In Nebraska, former Bakery Workers (BCTGM) leader Dan Osborn is challenging two-term Republican Deb Fischer, and he leads in a poll commissioned by Nebraska Railroaders for Public Safety. Osborn is a steamfitter from Omaha who helped lead a successful strike by 1,500 Kellogg’s workers. They shut down plants in four states for 11 weeks in 2021.
In West Virginia, Zach Shrewsbury is also running for U.S. Senate. He’s a military veteran (as is Osborn), a community organizer, and the grandson of a coal miner. Shrewsbury hopes to replace multi-millionaire Joe Manchin by preventing governor Jim Justice, a billionaire coal baron, from claiming the seat that the corporate Democrat is vacating.
In their respective campaign launches last fall, both candidates sounded themes once familiar to voters in their home states in the heyday of progressive populism, but not heard much lately.
At a campaign kickoff event in late September, Osborn denounced “the monopolistic corporations… that actually run this country” and pledged to “bring together workers, farmers, ranchers, and small business owners across Nebraska around bread-and-butter issues that appeal across party lines.”
While picketing with striking General Motors workers in Martinsburg in October, Shrewsbury explained that he’s “running to win and show that working class people can run for office, even high office. We can’t be ruled by the wealthy elite who don’t understand everyday American life.”
Shrewsbury isn’t afraid of being red-baited: “If caring about working-class people, caring about people having bodily autonomy, water rights, workers’ rights, makes you a socialist, then call me whatever you want. Doesn’t bother me,” he told The Guardian recently.
Shrewsbury plans to compete in next year’s Democratic primary, but Osborn is currently collecting the 4,000 signatures necessary to get on Nebraska’s November 2024 ballot as an independent. He hopes to avoid an unhelpful association with the national Democratic Party in a state which chose Donald Trump over Joe Biden by 19 points in 2020.
Osborn supporters in Nebraska unions, and even the state Democratic Party, believe his non-partisan stance may be helpful. According to Jeff Cooley, a railroad union official who leads the Midwest Nebraska Central Labor Council, Osborn’s focus on rail safety and the Protecting the Right to Organize (PRO) Act, paid leave time, minimum wage increases, and misclassification of workers as independent contractors “offers hope to all workers in Nebraska regardless of political party.”
Osborn’s platform also highlights the need to curb corporate misbehavior ranging from routine consumer rip-offs to Big Pharma price gouging and monopolistic practices in the meatpacking industry which favor big agriculture over small family farmers and ranchers.

Dan Osborn, a leader in the 2021 Kellogg’s strike, is running for U.S. Senate as an independent in Nebraska. A poll commissioned by a Nebraska Railroaders group found he was slightly ahead of the incumbent Republican.
(Photo: Osborn campaign)
Jane Kleeb, a past Bernie Sanders delegate who chairs the Nebraska Democratic Party and serves as an Our Revolution board member, told the local media “it would be very interesting for Democrats, Libertarians, and Independents to all come together with the one goal of breaking up the one-party rule at the top of the tickets in our state.”
Kleeb acknowledged to Labor Notes that, at the moment, “the brand of the Democrats is not the best when it comes to working class and communities of color voters.” Meanwhile, in rural communities like her own, “people think Democrats are wimpy, just want to tax us, and take away our guns.”
Neither Osborn nor Shrewsbury look or sound wimpy. Before going to work for Kellogg’s as an industrial mechanic and becoming president of BCTGM Local 50G, Osborn served in the Navy and two state national guard units. Shrewsbury was in the Marine Corps for five years. After his discharge, he joined Common Defense to rally fellow veterans against what that group calls “Trump’s corrupt agenda of hate” and “the entrenched power of greedy billionaires who have rigged our economy.”
Osborn believes that his Senate race could be “the most viable independent campaign in America” next year.
Shrewsbury has been an organizer for Citizen Action and the New Jobs Coalition, where he met retired AFL-CIO organizing director Stewart Acuff, now a resident of West Virginia. Acuff hopes to enlist national union backing for Shrewsbury’s campaign. The two of them bonded while canvassing to build grassroots support for federally funded green jobs, environmental clean-ups, and infrastructure projects employing union labor. Acuff believes that Shrewsbury is uniquely equipped to challenge the “corporate colonialism that is still robbing a people and their state of much-needed resources.”
Shrewsbury wants to use his campaign “to help revitalize labor here and everywhere, like Bernie did.” Like Sanders, who won West Virginia’s Democratic presidential primary in 2016, Shrewsbury isn’t afraid of being red-baited. “If caring about working-class people, caring about people having bodily autonomy, water rights, workers’ rights, makes you a socialist, then call me whatever you want. Doesn’t bother me,” he told The Guardian recently.
In addition to voting for a senator next November, Nebraska voters will consider a ballot measure backed by teachers in the Nebraska State Education Association. It would repeal a Republican-backed tax scheme that aids private schools instead of financing public education.
Osborn sides with the teachers, showing what Kleeb calls “a real contrast” between Osborn and Fischer, who has built a $2.7 million re-election campaign war-chest. Fischer’s top donors include construction bosses, defense contractors, her Senate Republican colleagues, and AIPAC (the American Israel Public Affairs Committee).
Osborn has raised more than $100,000 in small donations so far. He believes that his Senate race could be “the most viable independent campaign in America” next year, particularly if Nebraska’s Democratic primary produces no serious competition for Fischer’s seat. Meanwhile, he is spending 40 hours a week doing boiler maintenance and repair work at Boys Town in Omaha, as a member of Steamfitters and Plumbers Local 464.
Osborn hopes to take more time off from his day job soon to campaign around the state, with backers like Nebraska Railroaders for Public Safety. This advocacy group just conducted a favorable poll and then endorsed him.
Their survey of 1,048 likely voters revealed considerable discontent with Fischer, who promised to serve only two terms but is now seeking a third. Despite Osborn’s lack of name recognition, their poll showed he had a slight lead over Fischer, which grew larger when survey participants were informed about the biographies and positions of both candidates.
The Nebraska Railroaders are taking that as an encouraging sign that their state still has an independent streak that could help “elect a next-generation representative of the working class instead of continuing to send out-of-touch millionaires back to Washington to fail us.”
How Wall Street's drive to financialize every aspect of the economy has derailed trains, harmed health care, bottle-necked supply chains, and made it harder for the U.S. military to aid its allies.
By now everyone is familiar with the derailment of Norfolk Southern (NS) freight train 32N on February 3 in East Palestine, Ohio. After a nearly two-mile long train carrying toxic chemicals derailed, a controlled burn of the chemicals in several railcars resulted in the release of noxious gases into the air. These included phosgene, a substance used in gas warfare in World War I. After many days of contradictory explanations, foot-dragging, and buck-passing, the railroad and all levels of government finally conceded the seriousness of the incident.
What caused the derailment? Twenty miles from the accident site, a third-party security camera spotted fire underneath one of the NS railcars. This raises the question: Why didn't the railroad's own wayside hotbox detectors already see the problem and alert the crew? The train crew eventually did receive a warning and applied the brakes just before East Palestine–but it was too late. According to a railroad union spokesman, the braking action, combined with too many heavy cars at the back of a very long train, could have caused an accordion effect leading to a catastrophic derailment.
How could the crew not have received a timely warning? Might the train have been excessively long with the railcars incorrectly assembled? Was the crew adequately trained? Were there maintenance deficiencies that caused a wheel-bearing failure?
Welcome to precision scheduled railroading.
It was only a matter of time before Wall Street's practice of financializing every aspect of the U.S. economy as a means of draining the life out of them invaded the railroad business.
It was only a matter of time before Wall Street's practice of financializing every aspect of the U.S. economy as a means of draining the life out of them invaded the railroad business. The term concocted by the suits for this is "precision scheduled railroading," a euphemism for "shareholder value," itself a euphemism for employing any excuse to lavish stock options and bonuses on corporate management while hollowing out the physical and human capital of the company.
Precision scheduled railroading is responsible for trains so long (and excessive stress on the couplers) that grades and curves will tend to decouple the cars. These long trains mean fewer trains, leading to inflexibility and inconvenience for shippers. Management makes every effort to tear out what it regards as underused rights of way and sidings, leading to further service cuts for customers. After the recent merger of Kansas City Southern, there are just six Class I railroads nationwide, and a near-duopoly (NS and CSX) east of the Mississippi, so customers have little recourse. Maintenance and safety are neglected while employees are overworked and undertrained.
Have you noticed that freight trains no longer have cabooses at the end? Management certainly isn't going to haul a piece of rolling stock that doesn't produce revenue. As a result, there is no freight conductor or brakeman at the back of a train providing an extra pair of eyes that could detect problems at the rear of increasingly long trains. Could that pair of eyes have spotted the fire on NS 32N? We'll never know; railroad management foreclosed that possibility.
The pervasive greed of Gordon Gekko-style railroading and the recklessness it spawns aren't just responsible for safety issues. As the American economy began to rebound from the pandemic, the industry's penchant for mergers, capacity reduction, and inflexible scheduling with fewer trains contributed to the supply-chain bottlenecks that became a threat to economic recovery. And since the railroad rights of way are in the hands of freight railroad oligopolists with little regard for public interest, President Biden's ambitious rail infrastructure plans are in jeopardy–what good are high-speed passenger trains if the freight roads refuse to give them priority?
But a rickety and mismanaged rail system was not the only domestic infrastructure shortfall the pandemic revealed; the very medical sector that had to contain the spread of COVID prior to the development of mRNA vaccines was clearly inadequate. Health care, at 18.3% of GDP, is the largest single component of the U.S. economy–yet it was woefully short of basic personal protective equipment (PPE) at the onset of the pandemic.
When medical personnel are also considered potential excess inventory, a shortage of healthcare workers is entirely predictable.
Medical professionals have known for over a century that the most basic means of combating a viral pandemic is a simple paper mask. Even an N95 mask, which uses very fine, electrostatically charged fibers to more effectively trap viruses, is infinitely simpler than, say, an F-35 fighter, which contains 300,000 parts sourced from 1,700 suppliers. Yet there was such a mask shortage in the first year of the pandemic that some nurses reused the same mask for months. Why?
Aside from complacency at all levels during normal times, potential American manufacturers are reluctant to gear up without a guarantee of long-term quantity purchases. As a result, about 50% of mask production resides in China. It is natural that in a health emergency, other countries are going to want to reserve PPE to meet domestic needs first, quite apart from the fragility of a trans-Pacific supply chain amid a global pandemic.
The shortage of U.S. hospital beds was evident to every American during the COVID crisis. But this shortage long preceded COVID, and it continues to exist post-pandemic. It did not happen by accident; the market-driven "lean inventory" cult of the business school was responsible. When medical personnel are also considered potential excess inventory, a shortage of healthcare workers is entirely predictable.
It should be obvious that fields like health care are not amenable to free-market dogma. For starkly different reasons, neither is the military. Yet in recent decades, the ideological mania for consolidation, outsourcing, privatization of government functions, and the downgrading of basic, low-profit hardware and activities in favor of complex, high-profit wonder weapons that may or may not work appear to have made the U.S. military a lavishly funded behemoth with feet of clay.
Russia's invasion of Ukraine has showed that, despite a defense budget of over three-quarters of a trillion dollars, the U.S. didn't get a lot for the money. Russia has been firing on average over 20,000 rounds of artillery against Ukraine, which can respond with only about a third of that number. The quantity is effectively rationed by the inability of the U. S. and its allies to produce more shells.
Since the war began, the U.S. has transferred about 1.5 million 155mm artillery rounds to Ukraine. This is a very basic item–the 155mm shell in various forms has been around since World War I. Yet for months, the Army has been gravely concerned about depletion of the ammunition stockpile, and with good reason. Annual U.S. production of the 155mm round is less than a tenth of the amount it has sent to Ukraine. Even surge production would require five years to rebuild the inventory because of the lead time needed to set up new manufacturing capability in a country with a gutted industrial base (the shells are produced in a century-old factory).
Replenishment time is much the same with many other munitions sent to Ukraine—the Javelin antitank missile: 5.5 to eight years; the HIMARS guided rocket: 2.5 to three years; the Stinger antiaircraft missile: 6.5 to an incredible 18 years. The verdict is damning: For all the money thrown at the Pentagon, the Department of Defense cannot supply weapons to a third party for a conventional land war of moderate size and intensity for much longer than a year without depleting its munitions stocks.
It is conventional wisdom in some quarters that Wall Street and the Pentagon are in a sort of symbiotic relationship–if not an active conspiracy–that benefits both. Yet by aping the fads of the biz schools–bare-bones inventory, just-in-time delivery, eradicating small producers to reduce alleged overcapacity, treating the workforce as a liability rather than an asset–the military bureaucracy has engaged in a kind of unilateral disarmament even as defense stocks have surged. By virtually every measure, numbers of major U.S. military hardware have steadily decreased: There are now fewer ships than before, and there will be fewer yet in the future. The same holds true for aircraft.
Mythology to the contrary, there is actually no freestanding or independent military-industrial complex anymore; it is a subset of the dominant national economic culture in the same way that the healthcare-industrial complex and the college educational-industrial complex are now mere components of that culture. It is a reductionist system that seeks to convert all work activity–even ones not adaptable to the supply/demand, profit/loss calculus of classical economics–into financialized investment vehicles.
And so it is with the economy as a whole. The pandemic, the resultant surge in consumer demand once the COVID restrictions were relaxed, plus the war in Ukraine, created the perfect storm of the supply chain crisis. It caused a global shortage of high-end logic chips used in automobiles, IT, and appliances that has still not abated, and transportation bottlenecks resulted in a scarcity of everything from infant formula, to sunflower oil, to clothing, to home and garden items.
These bottlenecks mean higher prices. As of March 2023, the average price of a new car in America was $45,818, according to J.D. Power. That's actually eased from $49,388 at the beginning of the year, but is still well more than half of the median household income in America.
There was probably no way to avoid some level of shortage given the worldwide scale of the COVID pandemic and the market disruption of the Ukraine war, but the supply chain breakdown was substantially worsened by the economic shibboleths that have been imposed on most of the global economy: just-in-time manufacturing and delivery, lean inventory, and inadequate transport capacity (such as with ships and trains).
Somehow, the ideology of capitalist realism, the unshakeable belief that there is absolutely no alternative to the business model of Jack Welch and his ilk, has battened itself onto forms of human activity as disparate as running a railroad, stocking cooking oil on the shelf at Safeway, supplying the Ukrainian front line, or saving lives in an emergency room.
The roots of this ongoing crisis of late capitalism go back more than half a century, and are found in the rise of transnational conglomerates, outsourcing, suppression of unions, and the favorable tax treatment of offshoring corporate operations. It is best summed up by the words of former GE CEO Jack Welch, once worshiped as the consummate business genius (and retrospectively deplored as the greatest single factor in wrecking one of America's foremost engineering firms): "Ideally, you'd have every plant you own on a barge," where it would be beyond any country's laws on safety, the environment, or fair pay.
It goes without saying that the prompt delivery of products to consumers, the production of artillery shells for war, and the manufacture of medical equipment to save lives are hardly comparable with one another, either in a crude functional sense or on a moral scale. But that is exactly the point.
Somehow, the ideology of capitalist realism, the unshakeable belief that there is absolutely no alternative to the business model of Jack Welch and his ilk, has battened itself onto forms of human activity as disparate as running a railroad, stocking cooking oil on the shelf at Safeway, supplying the Ukrainian front line, or saving lives in an emergency room. Is it any wonder that issues like climate change are so poorly addressed?
Despite all of the media attention on the horrible derailment in East Palestine, Ohio there has been little attention on the leaderless agency tasked with preventing such disasters.
More than halfway through President Biden’s term, there remain numerous critical appointed positions across the executive branch that remain empty. My colleagues have written extensively about the scope of this confirmation crisis. Some notable remaining vacancies include a seat on the Federal Communications Commission, around two dozen US Attorneys, and a seat on the National Transportation Safety Board. While much of this is due to obstruction by Senate Republicans, the importance of advancing good nominees remains. The fixes to the procedural delays are beyond Biden’s control (though not necessarily beyond Senate Majority Leader Chuck Schumer’s). But fighting to get the right people into positions of authority is still a top priority. As the mantra goes: personnel is policy.
But there is one critical, if low-profile, position that has not had a nominee at all: administrator of the Pipeline and Hazardous Materials Administration (PHMSA). Interestingly, despite all of the media attention on the horrible February derailment of a Norfolk Southern train in East Palestine, OH — including increased coverage of the response effort from the National Transportation Safety Board (NTSB), the Environmental Protection Agency (EPA), and the Department of Transportation (DOT) — there has been little attention on PHMSA itself.
PHMSA is an administration within DOT and is directly responsible for regulating dangerous trains. The weakened rule around high-hazard flammable trains is the work of Trump’s PHMSA. New rules addressing those shortcomings will also fall on its plate. And PHMSA’s authority extends well beyond just those rules, as it is responsible for regulating the safety (as its name implies) of pipelines and a litany of other transportation issues around moving dangerous materials. This includes flammable fuels like oil, natural gas, and coal, as well as radioactive substances and dangerous chemicals such as ammonium nitrate-based fertilizer. It’s a small and obscure agency, but undoubtedly a very important one.
The fact that such an important post as the PHMSA administrator has been purposefully left vacant is telling. It shows a lack of recognition around the post’s seriousness. And while the blame ultimately goes all the way to the White House, we would be remiss to absolve Secretary Pete Buttigieg. Presidents are famously busy and rely on input from their cabinet to determine what personnel decisions need to be prioritized. This is especially the case with technical offices, where the President depends on the subject matter expertise of their cabinet secretaries.
Additionally, President Biden, by not naming a nominee, has entrusted Buttigieg with deciding leadership at PHMSA. Unlike other administrations within DOT, the deputy administrator of PHMSA is appointed by the Secretary of Transportation without any need for presidential consultation or approval.
Tristan Brown, PHMSA’s deputy administrator, was handpicked by Buttigieg. That means that even more than is the case with other DOT administrations, the successes and failures of PHMSA ultimately go back to Buttigieg. As an aside, entrusting the deputy administrator with the full workload of the administrator here is a departure from Secretary Buttigieg’s handling of a similar vacancy at the FAA, where the deputy was bypassed for acting administrator, despite federal statute stating he should have gotten the job. PHMSA has no such explicit statutory language for its deputy. Also unlike PHMSA, the Transportation Secretary does not appoint the deputy FAA administrator — the President does.
While there have been encouraging signs lately of Buttigieg leaning more into his role of a regulator, including blocking the proposed Spirit-JetBlue merger, he still has a lot of work to do. Seeing Buttigieg talk about the rail industry obfuscating regulation and publicly pressuring airlines to get rid of junk fees shows he can take on the corporations he oversees. But for two years now, he has spent much of his term as an administration spokesperson on TV while allowing critical DOT business, like banning those junk fees, recovering billions of dollars owed to consumers, and improving rail brake regulations, to slip through the cracks.
Buttigieg is good with the media, including Fox News, and that has value to the administration, but the technocratic processes he oversees cannot come at the expense of a good media hit. The post he signed up for is a notoriously low profile one, partly because of how down in the weeds it can get. It’s fine for Buttigieg to have a higher media presence, but he cannot choose cameras over his unique legal obligations to regulate avaricious transportation companies.
The only win if Canadian Pacific acquires Kansas City Southern is for freight rail's hedge fund investors, who are squeezing operating cash out of these railroads at the expense of workers, community safety, and the overall economy.
On March 15th, the Surface Transportation Board (STB)—the federal agency that regulates the U.S. freight rail industry—gave final approval to the acquisition of Kansas City Southern by Canadian Pacific. Approving this merger between America's sixth- and seventh-largest railroads was a dire mistake, which will have enormous economic and social costs that resound for decades.
In a nation committed to a competitive market, in a sector that's already as consolidated as American freight rail, it's important to evaluate mergers very carefully, because once big companies absorb smaller ones, it becomes impossible to pull them apart again. And as economics researcher Eric Peinert of the American Economic Liberties Project puts it, "Nothing in the history of rail consolidation suggests this particular merger is a good idea."
Allowing these two railroads to merge is likely to reduce competition in the industry, leading to higher shipping prices, reduced service, and job cuts. It will impair the ability of small businesses to operate. It will lead to increased safety risks and have environmental impacts on the communities where rail traffic will increase. And as cost-cutting pressure from railroads' predatory hedge fund investors continues to mount, it will likely contribute to even more aggressive cuts in service than we have seen over the past five years.
The STB knew all that. They got 2,000 public comments about the merger, from industry experts, researchers, lawmakers, and the general public—hundreds of them laying out reasons why it shouldn't get the green light. On behalf of people across America, U.S. Senators and Representatives weighed in with their concerns, which the STB ignored.
"Cost-cutting demanded by the industry's hedge-fund investors—while generating a cash windfall for them personally—has resulted in safety compromises that risk the lives of employees and the well-being of the densely settled communities freight railroads pass through..."
The most obvious risks are to the competitive marketplace, with both rail customers and rail workers paying the biggest price. Sen. Elizabeth Warren (D-Mass.) called for the merger application to be denied outright on antimonopoly grounds. As Rep. Katie Porter (D-Calif.) put it, as America's Class I freight railroads have dwindled from 33 to just seven, "lack of competition has allowed railroads to gut capacity, capture and extort businesses, fire thousands of workers, and threaten the integrity of America's freight transport network and supply chains – all while extracting monopoly profits."
For American businesses, precision scheduled railroading (PSR), the approach these giant railroads are taking to providing as little service as they can get away with and doing it as cheaply as possible, has meant less frequent, less reliable, and more expensive shipping options. And for the freight rail workforce, it's meant job cuts of 28% across the industry with onerous contract terms and more dangerous working conditions for those who remain.
In the wake of the hazardous Norfolk Southern derailment at East Palestine, Ohio and a string of other high-profile derailments earlier this year, industry-watchers of all stripes have noted that cost-cutting demanded by the industry's hedge-fund investors—while generating a cash windfall for them personally—has resulted in safety compromises that risk the lives of employees and the well-being of the densely settled communities freight railroads pass through, like the Chicago suburbs.
According to employees, extreme schedule pressures under PSR push workers to their physical limits, leaving them with as little as 60 seconds to conduct railcar safety inspections. And due to investor pressure to save money by running fewer, longer trains, it's more and more frequent to see trains as long (150 cars) as the one that derailed in Ohio. Sarah Feinberg, former head of the Federal Railroad Administration (FRA), says that even trains as short as 80 cars can pose size risks.
The American Economic Liberties Project describes the hyper-consolidated U.S. freight rail giants as operating under a "financially extractive business model," which makes but money for the railroads' hedge fund investors at great cost to the public welfare. And Peinert says yet another merger will make things even worse. "This deal sets the stage for future disasters like East Palestine, and will likely lead to even further railroad staffing cuts, even higher cargo loads, and other profit-driven safety shortcuts."
Despite the recent statement by STB chair Martin Oberman that this merger "will be an improvement for all citizens in terms of safety and the environment," their own environmental impact study found that the opposite would be the case in numerous communities along busy rail routes: the merger will increase hazardous cargo transportation along 141 of the 178 rail segments, totaling 5,800 miles of track in 16 states. And even basic public services like Metra passenger rail service—a critical economic engine for the 10-million-population three-state Chicago metro area, which operates on Canadian Pacific tracks, competing with freight services—are at risk. Along some of those track segments, freight traffic is projected to triple, with much of the new cargo slated to include hazardous materials.
In response to the market consolidation concerns raised by merger opponents, the STB has imposed some conditions. They will require that interchanges within other railroads be kept open, that a process be provided for challenging rate increases, and that the companies provide data so the STB can monitor compliance. But as Sen. Warren noted, these measures are insufficient. That's especially true given that there's already evidence that Canadian Pacific and Kansas City Southern may have been violating antitrust law against collusion, by sitting down together at a luxury hotel in Florida to plan the future of the company in early February, even before the merger was approved.
Cutting routes, service, and workers may be good for profits, but it's bad for American competitiveness, for workers, for industry, and for public safety and quality of life. The only win here is for freight rail's hedge fund investors, who are squeezing operating cash out of these railroads—cash they used to use to pay employees, fund service, and finance safety improvements—and taking it to the bank.
"These companies siphon billions into share buybacks, dividends, and bonuses rather than into the vital maintenance and infrastructure growth we need to build a safe, modern, and thriving rail industry," said one worker.
After at least six major freight train derailments occurred across the United States over the past week, the need for stronger rail safety rules couldn't be clearer, an interunion alliance of rail workers said Monday.
"The recent uptick in derailments across the U.S. highlights the dire need for stricter regulations on the length and weight of trains, as well as a focus on preventing unsafe operational practices such as precision scheduled railroading (PSR) which prioritizes short-term financial gains for Wall Street over the safety of communities and railroad workers," Jason Doering, a locomotive engineer and general secretary of Railroad Workers United (RWU), said in a statement.
The past week "was not a good one" for the nation's Class 1 rail carriers, RWU observed.
On Sunday, March 26, a Canadian Pacific train carrying hazardous materials careened off the tracks outside Wyndmere, North Dakota, spilling liquid asphalt and ethylene glycol and releasing propylene vapor.
Last Monday, a Union Pacific iron ore train reached 118 miles per hour as it ran away down Cima Hill in the Mojave Desert before wrecking on a curve, destroying two locomotives and 55 cars in San Bernardino County, California.
On Wednesday, a Canadian National iron ore train derailed in Butler County, Pennsylvania.
On Thursday, a BNSF train carrying ethanol and corn syrup crashed near Raymond, Minnesota, causing a fire that forced local residents to flee.
On Friday, a Norfolk Southern train went off the tracks in Irondale, Alabama.
One day ago, a train operated by the Class 2 regional Montana Rail Link—soon to be owned by BNSF—derailed on the banks of the Clark Fork River in Paradise, Montana.
"The recent uptick in derailments across the U.S. highlights the dire need for stricter regulations on the length and weight of trains, as well as a focus on preventing unsafe operational practices such as precision scheduled railroading."
"Rail workers are not surprised to see the dramatic increase in rail incidents following the widespread cuts to the industry," said locomotive engineer and RWU steering committee member Paul Lindsey.
"Each year these companies siphon billions into share buybacks, dividends, and bonuses rather than into the vital maintenance and infrastructure growth we need to grow a safe, modern, and thriving rail industry," Lindsey added.
Norfolk Southern has become the poster child for freight industry greed as the toxic aftermath of February's fiery train derailment and ensuing chemical spill and burnoff continues to unfold in East Palestine, Ohio.
Questioned last month at a U.S. Senate hearing about the ongoing public health and environmental disaster, Norfolk Southern president and CEO Alan Shaw refused to commit to giving workers seven days of paid sick leave or halting stock buybacks.
More Perfect Union has calculated that payouts to Norfolk Southern's shareholders soared by more than 4,500% over the past 20 years, from $101 million in stock repurchases and dividend bumps in 2002 to $4.7 billion in 2022.
Shaw also refused to commit to ending PSR, the profit-maximizing scheduling system that forces fewer workers to manage longer trains in less time, even though unions and progressive lawmakers argue the Wall street-endorsed model makes the U.S. rail system more dangerous and contributes to the 1,500-plus derailments seen nationwide each year.
Although Norfolk Southern epitomizes how railroad executives prioritize profits above all else, the corporation is far from alone in pushing for deregulation and implementing anti-worker, pro-investor policies.
An OpenSecrets analysis published last month found that the rail industry spent more than $713 million lobbying against enhanced rail safety rules at the federal and state levels between 2002 and 2022. Top spenders include the Association of American Railroads trade group, CSX, Union Pacific, Norfolk Southern, and BNSF's parent company Berkshire Hathaway, which is owned by billionaire Warren Buffett.
While RWU has made the case for nationalizing the railroads, it has also outlined a plan for reforms that can be quickly implemented in the absence of such a sweeping transformation. Specific provisions the alliance has called for include sufficient staffing; limits on train length and weight; adequate maintenance and inspections; and better training and employee benefits.
Last week, Sens. John Fetterman (D-Pa.), Bob Casey (D-Pa.), and Sherrod Brown (D-Ohio) introduced the Railway Accountability Act, which includes some of the measures sought by RWU and is supported by unions including the Transport Workers of America (TWU), the National Conference of Firemen & Oilers (NCFO), and the International Association of Sheet Metal, Air, Rail, and Transportation Workers-Mechanical Division (SMART-MD).
Questioned at a Senate hearing on the East Palestine disaster, Alan Shaw also wouldn't agree to end "precision-scheduled railroading," a Wall Street-led profit-maximizing approach that critics say endangers communities nationwide.
Thursday's U.S. Senate hearing about the ongoing environmental and public health disaster in East Palestine, Ohio "did not go well" for Norfolk Southern president and CEO Alan Shaw, the progressive media outlet More Perfect Union declared.
Shaw refused to commit to providing workers with seven days of paid sick leave, ceasing stock buybacks, and abandoning Wall Street-endorsed policies that critics say contribute to the 1,500-plus derailments seen each year in the U.S., including Norfolk Southern's toxic crash near the Ohio-Pennsylvania border last month as well as a derailment that happened in Alabama just before the multimillionaire executive testified.
In remarks prepared for the Senate Committee on Environment and Public Works, Shaw wrote, "I am deeply sorry for the impact this derailment has had on the people of East Palestine and surrounding communities, and I am determined to make it right."
But during the committee's hearing, Shaw refused to use the multiple opportunities he was given to publicly commit to enacting meaningful changes.
Noting that Norfolk Southern has recently rewarded wealthy investors with $10 billion in stock buybacks, Independent Sen. Bernie Sanders of Vermont asked Shaw if he could "tell the American people and your employees right now that... you will guarantee at least seven paid sick days to the 15,000 workers you employ."
Sanders acknowledged that Norfolk Southern recently agreed to provide up to a week of paid sick leave per year to roughly 3,000 track maintenance workers. However, he asked Shaw, "Will you make that commitment right now to your entire workforce?"
"I will commit to continuing to discuss with them important quality-of-life issues," Shaw responded.
Sanders told Shaw he sounds "like a politician" and reiterated his question, but the executive repeated his dodge.
Sanders, chair of the Senate Health, Education, Labor, and Pensions Committee, then told Shaw that he looks forward to discussing the matter further, hinting at a potential request to testify before the panel he leads.
Later during the hearing, Democratic Sen. Jeff Merkley of Oregon asked Shaw, "Will you pledge today that you will do no more stock buybacks until a raft of safety measures have been completed to reduce the risk of derailments and crashes in the future?"
Once again, Shaw refused to give a straight answer, saying that he will commit to "continuing to invest in safety." Merkley repeated his question, to no avail.
More Perfect Union has calculated that payouts to Norfolk Southern's shareholders surged by more than 4,500% over the past 20 years, from $101 million in stock repurchases and dividend bumps in 2002 to $4.7 billion in 2022.
In response to Merkely's inquiry, Shaw claimed that thanks to his company's safety investments, "the number of derailments, hazardous material releases, and personal injuries has declined" over time.
Not helping Shaw's case, a Norfolk Southern train careened off the tracks in Calhoun County, Alabama around 6:45 am ET on Thursday, about three hours before the hearing began. The rail giant was also responsible for other derailments last month in addition to the highly visible one in East Palestine. Moreover, a Norfolk Southern conductor was killed in a collision in Ohio early Tuesday.
More Perfect Union shared data showing that Norfolk Southern's accident rate grew faster than the industry average over the past decade and accused the CEO of lying about his company's safety record.
According to Railroad Workers United and others, industry-led deregulation and Wall Street-backed policies such as "precision-scheduled railroading" (PSR) have made the U.S. rail system more dangerous.
During Thursday's hearing, Sanders brought up PSR, which forces fewer workers to manage longer trains in less time.
The profit-maximizing practice championed by Wall Street has enabled Norfolk Southern to rake in billions of dollars while reducing the size of its workforce by nearly 40% over a recent six-year period, said Sanders, but that has come at the expense of safety.
"Will you make a commitment right now to the American people that you will lead the industry in ending this disastrous precision-scheduled railroading?"
Despite Sanders' request for a "yes or no" answer, Shaw danced around the question, saying that he has increased hiring since becoming CEO last May.
Sanders characterized the recent uptick in hiring as an attempt to recover from a preceding round of mass layoffs and asked once again if Shaw "will lead the industry in doing away with" the PSR model that was "imposed" by profit-hungry Wall Street actors.
Shaw, however, refused to commit to such a change.
Thursday's hearing comes two days after the National Transportation Safety Board—which is already probing the causes of the East Palestine disaster—announced a "special investigation" into Norfolk Southern's "organization and safety culture."
It also comes less than a month after Shaw angered East Palestine residents by skipping a town hall where people expressed their concerns over the long-term consequences of air pollution and groundwater contamination stemming from the release and burnoff of carcinogenic chemicals, a move that was made to avoid a catastrophic explosion.
Following the hearing on Capitol Hill, Food & Water Watch executive director Wenonah Hauter said in a statement that "Shaw's apology today rings hollow," coming as it did "after years spent pushing to roll back the very sorts of safety regulations that would have prevented an accident like this."
"If Norfolk Southern had real concern for the safety of the countless communities like East Palestine through which their trains run, they would be calling for more safety measures for the industry," said Hauter. "Instead they offer voluntary steps that can easily be undone, prioritizing profit margins over people."
Much of the transportation infrastructure in the United States, including the interstate highway system, is publicly owned. Union members think safer railways can only be achieved by public ownership.
If the derailment of a Norfolk Southern train carrying hazardous materials in East Palestine, Ohio, tells us anything, it is that the corporate CEOs, billionaire speculators and profit-hungry investors who control America's transportation systems are not up to the job of running railroads.
As Ohio Sen. Sherrod Brown told CNN, "There's no question (that the railroad company) caused it with this derailment because they underinvested in their employees."
Brown's angry with the railroad corporations. "They never look out for their workers. They never look out for their communities. They look out for stock buybacks and dividends," he says. "Something's wrong with corporate America, and something's wrong with Congress and administrations listening too much to corporate lobbyists. That's got to change."
But what should the change be? Railroad Workers United, an inter-union solidarity caucus of rank-and-file railroad workers that has championed worker and community safety, is making the case that "since the North American private rail industry has shown itself incapable of doing the job, it is time for this invaluable transportation infrastructure—like the other transport modes—to be brought under public ownership."
"Railroads are systematically destroying the freight rail system," explained Ross Grooters, a locomotive engineer who co-chairs RWU. "We need public ownership of this critical infrastructure to correct freight railroad problems—just like all other U.S. transportation infrastructure and other rail systems around the world."
RWU's argument for public ownership explains that corporate speculators have, in their pursuit of profits, put the industry on "an irresponsible trajectory to the detriment of shippers, passengers, commuters, trackside communities, and workers."
The group detailed a litany of issues:
"On-time performance is in the toilet, shipper complaints are at all-time highs. Passenger trains are chronically late, commuter services are threatened, and the rail industry is hostile to practically any passenger train expansion. The workforce has been decimated, as jobs have been eliminated, consolidated, and contracted out, ushering in a new previously unheard-of era where workers can neither be recruited nor retained. Locomotive, rail car, and infrastructure maintenance has been cut back. Health and safety has been put at risk. Morale is at an all-time low. The ongoing debacle in national contract bargaining sees the carriers—after decades of record profits and record low operating ratios—refusing to make even the slightest concessions to the workers who ... have made them their riches."
RWU members say that, under public ownership, many if not all of those issues would be better addressed.
That's not a particularly radical notion. Much of the transportation infrastructure in the United States, including the interstate highway system, is publicly owned. And the railroads were themselves under federal government control during World War I. When the war ended, rail workers and their unions pushed to keep the industry publicly owned. Eugene Victor Debs, a veteran railroad union leader, campaigned on the issue in his 1920 Socialist Party presidential bid. Many progressives, especially in farm country, agreed. But the government handed the railroads back to their wealthy owners and the issue died down—until the Great Depression devastated rural America.
In 1933, Joseph Bartlett Eastman, a member of the Interstate Commerce Commission, was nominated by President Franklin Roosevelt to serve as Federal Coordinator of Transportation. The following year, Eastman wrote: "Theoretically and logically public ownership and operation meets the known ills of the present situation better than any other remedy. Public regulation of a privately owned and operated industry, reaching deeply into such matters as rates, service, capitalization, accounting, extensions and abandonments, mergers and consolidations, is a hybrid arrangement. When an industry becomes so public in character that such intimate regulation of its affairs becomes necessary, in strict logic it would seem that it should cease to masquerade as a private industry and the government should assume complete responsibility, financial and otherwise."
Eastman's ideas appealed to organized labor. Rail union heads called in 1935 for "the immediate taking over of the railways of the United States by the federal government and the creation of agencies within the federal government to manage and operate the railways."
William Green, who was then the American Federation of Labor president, told his group's convention: "It seems to me that the railroads are headed for government ownership. I do not see where we can find any other remedy. The only way the railroads can be saved, the interest of the workers maintained, and service be kept up for the good of the country is through government ownership."
In Congress, Montana Sen. Burton K. Wheeler, a progressive who had been the vice presidential nominee on Wisconsin Sen. Robert M. La Follette's anti-monopoly ticket in 1924, was a steady advocate for public ownership of railways "as a matter of expediency."
Today, agitation for nationalization—which the great New York Times labor reporter A.H. Raskin once referred to as "the dirty word on U.S. railroads"—has been renewed. The Railroad Workers United effort has gained thoughtful attention in left media and support from the United Electrical, Radio and Machine Workers of America, whose members build locomotives in Erie, Pennsylvania.
"Our nation can no longer afford private ownership of the railroads; the general welfare demands that they be brought under public ownership," UE argued in a January statement. "Railroads are, like utilities, 'natural monopolies.' The consolidation of the Class 1 railroads in the U.S. into five massive companies over the past several decades has made it clear that there is no 'free market' in rail transportation. With most customers having no other choice, and no central authority mandating long-term planning, each individual railroad company has little incentive to make investments in infrastructure and every temptation to take as much of their income as possible as profits."
"You can't just replace the manpower with a machine when it's not always as effective," said one railroad worker.
With railroad operator Norfolk Southern involved in numerous significant train derailments and other accidents in recent weeks, the company on Monday unveiled a "six-point safety plan" that officials claimed would "immediately enhance the safety of its operations."
But critics including rail workers were quick to point out that one aspect of the plan could worsen the growing problem of reduced railroad crews, which they say has contributed to dangerous conditions on railroads.
The plan calls for a number of improvements to Norfolk Southern's systems to detect overheated wheel bearings, which the National Transportation Safety Board said in a preliminary report appeared to be the cause of the train derailment in East Palestine, Ohio on February 3.
In addition, Norfolk Southern said it aims to accelerate its "digital train inspection program" by partnering with Georgia Tech Research Institute to develop new safety inspection technology the company claims could "identify defects and needed repairs much more effectively than traditional human inspection."
The technology would use "machine vision and algorithms powered by artificial intelligence," the plan reads—offering what journalist Sam Sacks said is likely a thinly veiled proposal for "further reductions" in the company's workforce.
As Common Dreams reported last month, the national inter-union organization Railroad Workers United (RWU) has called for comprehensive legislation and robust action from regulators to keep rail workers and communities safe, warning that rail companies including Norfolk Southern have been lobbying for years for federal approval to reduce train crews and loosen safety protocols.
Rather than rail companies developing safety plans themselves, federal action is needed to guarantee "proper and adequate maintenance and inspection of rail cars and locomotives, track, signals, and other infrastructure, RWU co-chair Gabe Christenson said in a statement Monday.
Rail workers have "predicted stuff like" an increased reliance on automation, railroad worker and RWU steering committee member Matt Weaver told Common Dreams on Tuesday, as "the Precision Scheduled Railroading [PSR] business model" used by rail companies "calls for doing more with less."
Under PSR, rail companies attempt to maximize profits by running trains on strict schedules and cutting back on equipment and staff. Railroad unions have said the system and the resulting lax safety protocols are an underlying cause of recent train accidents including the East Palestine derailment, another derailment that took place in Michigan less than two weeks later, and a collision between a Norfolk Southern train and a dump truck on Tuesday in Ohio, in which conductor Louis Shuster was killed.
Weaver noted that RWU and his own union, the Brotherhood of Maintenance of Way Employes Division (BMWED), aren't opposed to the use of automation in inspections entirely.
"We used to have 12-man gangs that put all the ties in by hand and everything, and now we have lots of machines which do help us live longer and not have our backs or our hips, knees, shoulders [get injured]," he told Common Dreams. "But you can't just replace the manpower with a machine when it's not always as effective. Eyes on the rails and the tracks can catch some things the machines do not."
"We've accepted those as additional help," he added. "Not as a replacement."
Last year, as railroad companies including Norfolk Southern demanded that the Federal Railroad Administration (FRA) allow them to continue pilot programs testing automated safety inspections, BMWED noted that according to FRA data, the causes of 48 train accidents that took place between 2016 and 2021 could only be detected through visual inspections while just 14 could be detected through "enhanced track geometry inspection" done by machines.
"Over 50% of the accidents that happened from 2016 to 2021 do not even have the ability to be found by the technology that they're looking to use," Roy Morrison, director of safety for the union, told Freight Waves last May.
In recent days rail unions have denounced an attempt by Norfolk Southern to use workers' demands for paid sick leave against them—offering BMWED members four days of sick leave in exchange for the union's support for its automated inspection program.
"Norfolk Southern's proposal was ultimately for the union to be complicit in Norfolk Southern's effort to reduce legally required minimum track safety standards through supporting their experimental track inspection program without a sensible fail-safe or safety precautions to help ensure trains would not derail," wrote Jonathon Long, general chairman of the American Rail System Federation of the BMWED, in a letter to Ohio Gov. Mike DeWine. "In other words, Norfolk Southern's proposal was to use your community's safety as their bargaining chip to further pursue their record profits under their cost-cutting business model."
Weaver argued that strong comprehensive railroad safety legislation is needed to compel railroad companies to keep workers and communities safe. RWU has expressed support for some aspects of the bipartisan Railway Safety Act of 2023, introduced last week, but warned that loopholes will allow companies to "avoid the scope of the law without violating the law" and ultimately use the legislation to reduce staff.
"That's kind of their ultimate goal," Weaver told Common Dreams. "And you can't trust a capitalist industry, a for-profit industry to self-regulate. We have to have government intervention. So it's time for the regulators to regulate and the public servants to serve the public."