WASHINGTON, D.C. — A wire service reports that the Dakota, Minnesota & Eastern Railroad Corporation’s proposed purchase of I&M Rail Link should undergo a longer federal review because the combined company might be financially weak, six unions said.
The unions asked the Surface Transportation Board to stay a request by Dakota, a four-state railroad, for approval to buy I&M Rail, an adjacent Midwest carrier, as early as June 28. The board needs more time to review financial, employee, customer and environmental impacts, the unions said in a filing with the board.
As many as 500 engineers, clerks and other workers might lose their jobs because “the proposed purchase by a short-line railroad with marginal operating profits of a larger regional carrier with similar marginal operating profits” probably isn’t “a financially healthy and viable combination,” the filing said.
The closely held railroads had sales of $180 million last year and were profitable, Dakota President Kevin Schieffer has said. I&M, based in Davenport, Iowa, has about 1,400 miles of track in Iowa, Minnesota, Missouri and Illinois, and would give Dakota, based in Brookings, S.D., access to Eastern rail lines and power plants. Dakota has 1,100 miles of track in Iowa, Minnesota, South Dakota and Wyoming and plans to build 260 more miles to Wyoming coal fields.
Under the board’s rules, the agency has until June 28 to rule on the deal. If the board approves the purchase, Dakota must seek permission to run both railroads. The companies haven’t disclosed terms.
The Brotherhood of Locomotive Engineers, International Association of Machinists, Brotherhood of Maintenance of Way Employees, Transportation Communications International Union, International Brotherhood of Electrical Workers and Brotherhood of Railroad Signalmen filed for the stay.