RACELAND, Ky. — CSX Transportation will furlough 193 of the 291 workers at the Raceland, Ky., car shops at the end of this week, the Huntington (W.Va.) Herald-Dispatch reported.
It’s the first time since signing an agreement seven years ago guaranteeing work in exchange for safety, productivity and attendance goals that Raceland workers will not have their 200 guaranteed work days.
The company notified the workers they will be furloughed through the end of this year and possibly until early March. Because of the short work year, the workers will receive their 60 percent pay until the 200-day period expires.
“We’ve lived up to our part of the bargain. Now it’s their time to, and they’re going to,” said Woody Lane, district chairman of the Brotherhood of Railway Carmen District 6344, after learning of the job cuts.
The company announced it was furloughing the workers because of an unanticipated decline in coal loading and unexpected weakness in the overall economy.
Raceland is the largest car repair facility operated by CSX. Employees there build and repair different types of cars, including coal hoppers, gondolas and coil steel cars.
“Coal loadings are far lower than expected and, in fact, trail last year’s numbers. And overall economic demand is running below our expectations,” Bill James, Raceland plant manager, said in a prepared statement.
“Reducing a work force that consistently performs at high levels in safety, quality and productivity has been an extremely difficult decision. There just isn’t enough work available to keep us running at full strength.”
On Sept. 4, CSX warned that weak coal demand from utility customers would adversely affect earnings for the third quarter of its fiscal year. The quarter ended Sept. 27, and the company will release its third-quarter earnings report Oct. 24.
CSX said coal carloads in the third quarter were expected to be down 5 percent from a year ago and revenues would be down by $35 million. Coal stockpiles at electric utility customers were dropping at a much slower rate than anticipated in the quarter, but shipments should pick up before the end of the year, CSX CEO John Snow said in the Sept. 4 statement.
CSX spokesman David Hall the agreement between the railroad and the union requires the workers to have 200 days of work guaranteed in exchange for meeting certain goals. Because the shops had another furlough earlier this year, the 200-day guarantee will not be met, he said.
That means the workers will receive 60 percent of their normal pay through Dec. 13, when the 200-day guarantee would have been met this year, he said. They can apply for unemployment benefits after Dec. 13, he said.
The company hopes to have the shops running again by March 3, Hall said.
“Whether we bring them back sooner depends on success in capturing outside business as well as any internal changes,” Hall said.
Lane said he knew the coal business on CSX was down, but he was still shocked to learn about the furloughs.
“I knew they were in pretty bad shape. I knew they had furloughs at other CSX locations. In the past, they had kept us working,” he said.
Adding to the surprise was the fact that last year the shops had worked injury-free for the first time since they opened in 1928, Lane said.