A Post-Holiday Amtrak Strike Looms

Unions say they’ve had enough, but Congress isn’t likely to let a strike go on for long.

By Martha Lynn Craver, Associate Editor, The Kiplinger Letter

November 27, 2007

Amtrak employees may strike as early as Feb. 1 over pay issues. Amtrak is offering signing bonuses of $4,500 per employee and a total pay raise of 24% between now and 2010. The unions, which have only received cost-of-living raises since their contract expired, want pay hikes to be retroactive to 2000, but Amtrak says no way. A spokesman for Amtrak says that would cost $215 million.

Negotiations have been going on for almost eight years without success between the national rail passenger service and nine of its 14 unions. A National Mediation Board recommended settlement which was rejected by both sides, leading to a 30-day cooling-off period. That will be followed, under the Railway Labor Act, by the appointment of a Presidential emergency board. That panel will have 30 days to offer a recommendation. If the two sides reject it, the unions can launch what would be the first strike in Amtrak history.

The disruptions in service would affect some commuter rail and freight lines, as well as Amtrak’s passengers -- about 25 million a year. Many commuter rail lines use Amtrak-owned track between Washington, D.C. and Boston, and many use Amtrak employees to operate trains. Chicago’s busy Union Station, for example, would be shut down by a strike because it depends on Amtrak workers. Some freight that travels on Amtrak-owned track on the East Coast would also be stopped if Amtrak employees go on strike.

But any strike would be short-lived, probably lasting less than a week. Congress will be quick to step in and impose a settlement. That won't be good news for the unions -- Congress would most likely favor Amtrak because lawmakers would be reluctant to saddle the cash-strapped carrier with a costly contract.

In a separate legislation, Congress is poised to give Amtrak more money for fiscal year 2008. When the dust settles, the Transportation, Housing and Urban Development's spending bill will include $1.45 billion for Amtrak, up from $1.3 billion in fiscal 2007. The legislation includes $75 million for a new grant program that matches state contributions for intercity passenger rail operations.

Long term prospects are even better for the rail carrier. With oil prices at record high and congestion worsening on highways and airports, lawmakers are looking at passenger rail as an important part of the nation’s infrastructure worthy of federal support. That sentiment bodes well for legislation to beef up Amtrak in other ways. The Senate already has approved a bill that authorizes $1.9 billion a year for six years and another $1.3 billion in bond authority. The House is expected to pass a nearly identical bill early next year.

The Senate bill also replaces an earlier requirement that Amtrak work toward financial self-sufficiency -- a goal supported by those criticizing Amtrak and its reliance on federal money -- with a commitment to improve service. The new legislation includes a new financial accounting system to provide better cost control and new quality standards for service.

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