Tuesday, March 24, 2015

“UP, UP, where art thou?” asks Texas customer

Written by  Frank N. Wilner, Contributing Editor
“UP, UP, where art thou?” asks Texas customer
As all good Texas stories require, this one includes beer. While there is no pickup truck or trailer park involved, a railroad and organized labor are prominent. As often is the case, the railroad appears to wear the black hat; its customer the white. And, of course, there are lawyers, but like the poor and cockroaches among us, lawyers are a species with which we must live in perpetuity.

Our story takes place along the humid Texas Gulf Coast, at a town called Gregory, about 11 miles from the port of Corpus Christi, where Union Pacific (UP) alone serves the Sherwin Alumina Co. (Sherwin), which—no surprise—produces something called alumina, which is aluminum oxide extracted from bauxite ore. The aluminum oxide is distributed worldwide to manufacture some of life’s absolute essentials, such as beer cans, zippers, smart phones, and even toothpaste. Imagine a world short of those products. No, don’t, because the thought is just too depressing—except, maybe, for a shortage of zippers.

Since October, many of the 450 United Steel Workers (USW) members engaged in a work stoppage have picketed the Sherwin plant and slowed production, with UP train crews, since Nov. 6, refusing to deliver the typical weekly ration of about 20 railcars of lime (100 tons per car) required in the production process. Trucks are said to be doing a poor job of replacing rail delivery. Sherwin is a subsidiary of global natural resources giant Glencore, a company based in Switzerland.

Sherwin’s attorneys have asked the Surface Transportation Board to order UP to fulfill its statutory common carrier obligation and provide the service, using qualified management employees or even qualified non-union train crews that could be leased from short line railroads or hired from a pool of retirees.

Sherwin contends its picketing workers have not threatened train crews and are not a danger to them, but crew members represented by the Brotherhood of Locomotive Engineers and Trainmen and the Transportation Division of the International Association of Sheet Metal, Air, Rail and Transportation (SMART) Workers typically are not forced by railroads to cross picket lines if they assert a fear of violence if they do.

A railroad source, asking not to be identified, suggested that as engineers and conductors are required to hold federal certification, there may not be a sufficient number of qualified management employees to operate the trains in place of the union-represented crews, and UP may not wish to risk upsetting labor unions while negotiations for new wage and benefits contracts are under way. Moreover, train crew qualification requires training in physical characteristics of the route—no matter how short—and that may not be feasible given the work stoppage at the plant and the fact that the UP owned line to the plant extends onto Sherwin property.

Sherwin said in its complaint to the STB that during the initial weeks of the work stoppage, prior to Nov. 6, UP management employees made periodic deliveries of lime to the plant, and then stopped. Sherwin also said it offered UP financial support to hire substitute crews, provide non-UP locomotives for the task, and would even pay to relocate to Gregory qualified UP management employees to resume operating the trains.

Sherwin also said it had hired a private security firm and had assistance from San Patricio County sheriff’s deputies to ensure no violence or other actions take place that could impede railcar deliveries to the plant. Sherwin said other contractors and suppliers, such as truckers, have been serving the plant and crossing picket lines with no reported incidents.

Production at the plant has continued, with Sherwin substituting truck deliveries for rail, but says the costs are excessive, the truck service “is often unreliable” as a dedicated fleet of trucks is not available, and the plant is not configured to permit efficient truck delivery of lime.

Citing regulatory precedent, Sherwin contends that the STB’s predecessor, the Interstate Commerce Commission, concluded that management action limiting service in the event of a customer work stoppage was “unjust and unreasonable” owing to the common carrier responsibility, and “the mere existence of a strike or picketing does not necessarily prevent the performance of pickup or delivery service.”

UP, meanwhile, has asked the STB to extend the deadline from March 30 to May 5 for its reply to the Sherwin complaint, saying the alleged urgency to decide this case may not exist because Sherwin waited four months after UP ceased serving the plant to file its complaint, and that “alleged concerns about harm to its [Sherwin] operations are speculative and involve circumstances that may (or may not) exist several months in the future.”

UP further said it requires more time to read and digest the 89-page, double-spaced Sherwin complaint and conduct an investigation of its own. Sherwin says UP has been investigating this issue since the summer of 2014 when Sherwin first advised UP of a possible work stoppage.

Over the past week, lawyers for both sides have complained to the STB about the other side, as lawyers typically do. As of March 23, the STB has yet to rule on UP’s request for an extension beyond March 30 to file a reply to the Sherwin complaint. The work stoppage at Sherwin Alumina is now approaching six months.

To be seen is whether the STB, under pressure by Congress to be more responsive to shipper service concerns, and to speed its decision-making process, is tolerant of UP’s request for more than a month’s delay beyond a 20-day period to reply to an 89-page, double-spaced complaint over an issue UP and Sherwin have been discussing for at least eight months.

One can always substitute Scotch for the beer if, in the meantime, the beer can supply runs out. But a shortage of zippers, smartphones, and toothpaste? Hmmm. . . .

As for Gregory, population under 3,000, Sissy Spacek starred in a 1981 movie, “Raggedy Man,” set in Gregory, but filmed in Lockhart, Tex., 155 miles to the north. Perhaps Hollywood took the advice Mel Brooks gave regarding Fort Sill, Okla.: “If you have an opportunity to go there, don’t.”

The case is Sherwin Alumina Company v. Union Pacific Railroad Company, Docket No. 42143, filed March 10, 2015.

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