Removing Surface Transportation Board (STB) Chair Martin J. Oberman or failing to reappoint him “would undermine the significant progress the Board has made during his tenure,” Transportation Trades Department (TTD), AFL-CIO President Greg Regan wrote in a June 13 letter to President Joe Biden, which followed a May 17 request that Biden revoke Oberman’s chairmanship and elevate Robert Primus to the position by RootsAction, The Freedom BLOC and the Revolving Door Project (RDP), which describes itself as an organization that “scrutinizes executive branch appointees to ensure they use their office to serve the broad public interest, rather than to entrench corporate power or seek personal advancement.”
“We view Chairman Oberman’s vote to approve the merger between Canadian Pacific Railway and Kansas City Southern Railway as fundamentally anathema to the Administration’s revival of antitrust enforcement,” RDP reported May 17, when it published the letter to President Biden. “Pro-competition measures have been the backbone of Biden-era economic policy, with revitalized enforcement from the Consumer Financial Protection Bureau, Federal Trade Commission, Department of Justice, National Labor Relations Board, and more. Allowing greater consolidation in the rail industry, which was already highly noncompetitive with only seven significant companies, is a severe blow to the government-wide effort to unrig markets ushered in by President Biden’s Executive order on Competition.
“Indeed, Oberman and the STB approved the merger over objections from the Department of Justice Antitrust Division and a majority of the Federal Maritime Commission (and all but one of the other Class I railways). A whole-of-government economic agenda requires leadership devoted to rebuilding an economy that works in the public interest. As we explain in the letter, we believe Chairman Oberman has eschewed this responsibility and should no longer be trusted to lead vital oversight of the American rail industry.” (Editor’s Note: The Department of Justice’s Antitrust Division did not oppose the merger; it observed that the STB should “carefully consider the competition impacts of further consolidation” in the rail industry and “thoroughly examine the competition concerns raised by commentators.”)
In response, Greg Regan told President Biden that the 37-union-affiliate TTD, AFL-CIO “vehemently object[s] to the sentiments expressed by Freedom Bloc, Revolving Door Project and RootsAction,” and that Chair Oberman’s vote in favor of the Canadian Pacific-Kansas City Southern merger “is no reason to remove him from his position or to not re-nominate him.”
Oberman’s first term as STB Chair expires Dec. 31, 2023; he took on the role Jan. 21, 2021, following designation by President Biden, and has served as a Board Member since 2019. STB members are limited to two five-year terms by statute.
Regan wrote in TTD’s June 13 letter (download below) that compared with BNSF, CSX, Norfolk Southern and Union Pacific, “the four railroads that dominate the U.S. freight rail network, CP and KCS are comparatively minor players. It must be recognized that the merger was literally ‘end-to-end’; CP and KCS had one point of connection and they did not compete head-to-head for business. There was no compelling evidence of a real decrease in competition. Further, rejection of the transaction would not have enhanced competition or decreased concentration in the industry in any significant way.”
According to Regan, the implementation of Precision Scheduled Railroading (PSR)—not “corporate concentration”—is the “primary issue plaguing the freight rail industry.” PSR, he wrote, “prioritizes profits above all other goals, including rail safety, reliable freight rail service, and workplace dignity. Recent high-profile derailments like the one in East Palestine, Ohio are a direct consequence of rail operations under the PSR model.”
“Chair Oberman recognizes the scope of these problems and champions real solutions to them,” Regan wrote. He added that the union’s objection to replacing Chairman Oberman “in no way diminishes our support for Board Member Primus. Mr. Primus has been an aggressive critic of the industry’s practices and we fully support his continued service on the Board as well. The actions and approach of the current Board are a refreshing change from its predecessors, and Chair Oberman is due much credit for that change. We look forward to the Board’s continued attention to freight rail service issues exacerbated by the scourge of PSR.”
In related developments, Regan last July sent a letter to the STB asking the agency to further increase the already stepped-up Class I railroad reporting requirements to include employment data. Also in July 2022, he urged a bipartisan group of lawmakers to support legislation reauthorizing the STB, as he sought to clarify the railroads’ common carrier obligation and “more effective mechanisms” for the STB to enforce it.