An answer to economic propaganda of railroads

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'Stock Market Crash: Its Meaning for Working People' ($1.50) Order from Socialist Action, 3435 Army St., Rm. 308, San Francisco, CA 94110 PROFITS WAGES Lynn Henderson is a member of United Transportation Union Local 1000 and works on the Burlington Northern Railroad. In September 1987, he participated on a panel of speakers at the Upper Midwest Rail Solidarity Conference. We reprint major portions of his speech below.

The entire speech appeared in the June 1988 issue of Straight Track, a newspaper published by the Inter Craft Association of Minnesota (ICAM). To subscribe 10 the newspaper or for more information on ICAM, write Straight Track, 3948 Central Ave. N.E., Minneapolis, MN S5421.

The topic of this panel is "Answering the economic propaganda campaign of the railroads." We've been subjected to a very intense campaign on Burlington Northern (BN).

They paid thousands of BN union employees $100 to watch their economic propaganda video. A very slick, professionally produced film. The arguments laid out in that economic video, I'm sure, are the same that you're hearing-no matter what railroad you work for.

They tell us that the railroad industry in general and BN in particular are doing very badly, are in very bad economic shape. There are too many employees, their wages are excessive, worker productivity is unsatisfactory, featherbedding is rampant.

(They say that] profits are low and the rate of return to investors is inadequate to attract necessary capital.

These conditions, combined with deregulation-big bad deregulation which of course the railroads were the biggest proponents in pushing through-mean the railroads in general and BN in particular are being beaten to death by their competitors, especially the trucking industry, which is gobbling up traditional railroad business.

"Here come the truckbusters"

What are the real facts here? Not too long ago, Forbes magazine printed a very revealing article. The article was called, "Here Come the Truckbusters."

The major theme of this article maintains that the railroad industry 10 years ago stopped losing business to trucking firms and in the next 10 years is going to start beating the trucking firms to death in competition.

They also had some other interesting things to say. I'll just read a couple of the opening paragraphs from this Forbes article: "When World War II ended, 1.4 million people manned the U.S. railroads. This year, that same industry will carry 35 percent more tonnage than it did four decades ago, but with only 300,000 workers.

"One worker today does the work it took six to do. Because of this almost incredible explosion of productivity, the railroads (an industry that predates even the smokestack era) have not only survived but flourished."

Forbes continues: "Whereas the Dow Jones industrial average increased some 80 percent over the past decade, Standard and Poor's index of railroad stocks has increased some 200 percent. Instead of dying, the railroads have shown astounding vigor. Sheer productivity has made the difference."

Where did all the "featherbedding" go that BN and the other carriers are always crying about? You see that when the corporate owners are talking among themselves and 4 SOCIALIST ACTION AUGUST 1988 SOCIALIST ACTION AUGUST

PRODUCTIVITY

laying the real facts—you get quite a different What about "low profits?"

What about some of the other arguments that BN makes in its propaganda campaign? What about lOW profits?

Well, if you examine Fortune magazine-another business publication written for businessmen—you find that BN's profits are not low. They're high, and over the last decade they've gotten a lot higher.

According to Fortune magazine, BN's profits in 1978 were $113.5 million, and in 1985 they had increased to $551.3 million. A huge increase in profits.

Once a year, Fortune puts out a special issue in which they compare and rate the economic performance of the largest U.S. corporations. If you go through the figures presented in Fortune, you can show that every one of the claims that BN makes is a flat lie.

What about "low productivity?"

In that special issue, Fortune rated the top 800 corporations in terms of labor productivity. How much profit did each individual employee produce for the corporation and how did that compare with other major corporations!

In labor productivity, out of the 800 largest corporations BN came in 235th—near the top 25 percent.

For those of you who work on the Burlington Northern, you will be happy to know that you and every other employee on the BN-each and every one of you— produced an after-tax profit of more than $14,000 per employee.

In Straight Track, we then took that figure and compared it to the per-employee profit rate in the trucking industry. We did this because of [President of Burlington Northern] Gaskin's constant claim that in order to be competitive we have to reduce rail wages to truckers' wages, and engineers shouldn't be paid any more than a truck driver, etc.

In the trucking industry the top four trucking firms produced profits of only from $3700 to $2682 per employee.

BN's most strident and persistent theme in their Peru rate of return on investment is insufficient to attract necessary capital for the railroad.

Again, the facts tell a different story. In comparing the rate of return on investment for all major U.S. corporations Fortune rated Burlington Northern in the top 20 percent. And over the last 10 years, BN averaged a rate of return on investment of 27.57 percent.

This rate of return was the sixth highest of all 50 major transportation companies, which includes trucking firms, barge lines, pipelines, and airlines.

Are workers and bosses "partners?"

But in thinking about it, is that really the principal direction we should go in answering these economic arguments? I don't think so.

These companies, BN and the other railroads, come to us and say, "Look, our profits are down this year. You're going to have to take a wage cut, you're going to have to give some concessions."

Our attitude should be: "We're not even interested in looking at your balance sheet. What's that have to do with us? We're not owners of this railroad. We don't care whether your profits are up or down. You're going to pay us a living wage."

You see, this is part of a philosophy that the companies have been working very hard to indoctrinate us in, especially in the last 20 years. And even some of the unions have bought it.

It's a philosophy that says: "We're partners together in business. Me the owner and you the worker. If the business does well, you'll do well. And if the business does badly, you're going to have to make sacrifices."

Historically, the wages of workers have very little to do with how individual businesses are doing financially. Sometimes businesses make high profits, and the workers in that particular industry get very low wages. Sometimes businesses make very low profits for a period of time, and the workers are still very well paid.

The day that corporations willingly share with their employees' big profits when they make them, I've got to see that. It's never happened, it never will. That's the bald truth of the matter.

What historically determines the wages workers get paid is not how well the balance sheet of a particular corporation is doing. It's how strong the union is in that plant, in that industry. That's what determines your wages.

Are railroads "overbuilt?"

The fact of the matter is that the railroad industry and the railroads are going to have to continue to function in this country and be manned by railroad workers.

You could make an argument maybe 20 years ago that the railroads were overbuilt, that there were too many railroads. That's certainly not true today. On the contrary, what's clear (and all the independent studies show it) is that there's an inadequate rail system in this country.

Even other corporations that are dependent on a decent railroad system in order to make their own profits, are screaming about it. There's going to be no further reduction of railroad mileage and number of trains run in this country-that's not going to happen.

And our position should be we don't care what the profits of individual companies are. Workers who work on those railroads are going to be unionized, and they're going to be paid a decent wage. Their wage is not going to be tied to the competence of particular managements or the skill of their business decisions or the economic manipulations of individual boards of directors of individual companies.

That's got to be our position. That's why I disagree when somebody said yesterday that maybe we should negotiate railroad to railroad.

One of our strengths, one of the results of that long strike period where we won a whole series of victories and the railroads had to make concessions, one of the concessions they had to make, was a national contract. That was a huge gain for us.

And frankly, if they can't run this railroad industry themselves effectively—the takeover artists and whatnot—then we shouldn't hesitate to call for it to be nationalized and turned into a public utility.

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THE FARM GAME 4E RETURN $1.75 a bushel. Now it's going for $4 a bushel. If he'd held out just a while longer, he would've made an extra $2.25 a bushel, but it's awfully hard to play the market this time of year.

S.A.: Why aren't you irrigating your crops?

Oeltjen: It's too expensive to invest in an irrigation system, especially if this is the only year we'll have a drought of this magnitude. It would be a waste of money to have equipment that expensive just sitting idle in the shed.

Hell, if I had enough money to sink into an irrigation system, I'd just get out of farming all together. It's a lot of work you know, but I wouldn't trade it for life in the city. I like having my own place.

S.A.: Dean, what do you think about the possibility that this drought could be man-made?

Oeltjen: Yes, I think the "greenhouse effect" could be the cause of these problems we're having now. But what are we going to do about it? We all have bad habits; we rely on machinery and the factories that produce them. All this contributes to pollution.

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