(The following article by Peter Passi was posted on the Duluth News Tribune website on November 6.)
DULUTH, Minn. — Railroad workers learned Wednesday that CN intends to make some deep cuts after acquiring the Duluth Missabe & Iron Range Railway Co. next year.
An operating plan CN submitted to the National Surface Transportation Board on Wednesday outlined its plans to close DM&IR’s car and locomotive repair shops in Proctor, lay off 76 people and transfer another 18 workers to facilities in Homewood, Ill., and Stevens Point, Wis. The net effect would be the loss of 94 jobs in Proctor and Duluth by mid-2004, when Montreal-based CN, known formerly as Canadian National Railway Co., expects to complete its purchase of the DM&IR. Systemwide, the Duluth-based railroad company now employs about 500 people.
“It’s going to be a blow not just for Proctor but for the entire area,” Proctor Mayor Dick Kieren said Wednesday.
Proctor City Administrator John Foschi said the DM&IR is his city’s largest employer, and laid-off workers will be hard-pressed to find comparable jobs in the community.
“There’s really no new development on the horizon that could replace that number of quality jobs,” he said.
Keith Stauber, a DM&IR employee and representative of the Brotherhood of Locomotive Engineers Local 163, described a decidedly somber mood at an employee meeting with CN staff Wednesday.
“There wasn’t a whole lot of talking,” he said.
“We will try to take as many steps as possible to mitigate the job loss,” said Mark Hallman, a CN spokesman, during a phone interview Wednesday afternoon.
He explained that workers who lose employment at DM&IR could be eligible to fill CN posts elsewhere that open up during the coming year. Hallman said the railroad company annually loses about 300 to 400 people to attrition.
Hallman said the anticipated job cuts are based on DM&IR’s current operation levels. If efforts to resume taconite pellet production at EVTAC Mining Co. are successful, Hallman said it’s possible additional jobs would be retained. EVTAC’s closure in May prompted the DM&IR to lay off 86 workers.
At present traffic levels, however, CN has determined it would be most efficient to consolidate major repair functions for the region at facilities near Homewood, Ill., and Centralia, Ill. Some workers from Proctor will be offered transfers to Homewood.
Lighter railroad repairs would continue to be tackled at DM&IR shops in Two Harbors and at the Keenan Yard in Iron.
Of all employee groups at the DM&IR, managers will sustain the greatest loss of jobs. CN plans to eliminate 27 managerial jobs and transfer four others to Homewood.
CN announced its plans in October to buy the DM&IR as part of a $380 million deal with Great Lakes Transportation LLC, based in Monroeville, Pa. The transaction also includes the USS Great Lakes Fleet Inc., the Bessemer and Lake Erie Railroad and the Pittsburgh & Conneaut Dock Co.
Hallman said CN plans to retain the services of Keystone Shipping Co., based in Bala Cynwyd, Pa., to manage and operate the USS Great Lakes Fleet. While CN does not anticipate reduced staffing levels aboard the eight vessels in the fleet, Hallman said detailed operational plans remain in development.
The Surface Transportation Board will need to approve CN’s operating plan for the railroad before the deal with Great Lakes Transportation can be completed.
Some workers are hoping the required approvals don’t come too quickly.
“A lot of people are glad the sale probably won’t occur until early summer because they’re only a few months away from pension plan cutoffs,” Stauber said. “But it’s practically inevitable that there will be some people who fall short of full eligibility when they lose employment.”
Unions will have an opportunity to raise concerns about CN’s operating plan by submitting written responses to the Surface Transportation Board, Stauber said.
Kieren said that if CN decides not to use repair facilities in Proctor, the city will explore other potential uses. The community has asked the state to designate its rail yards as a Job Opportunity Building Zone. If the request is granted, tax relief incentives offered there could be a useful tool for recruiting new business to the area.
“Maybe we can be creative,” Kieren said, suggesting that perhaps the rail yards could be used as a forest-products staging area.
Foschi considers the rail yards “the heart” of Proctor, and said it would be difficult to watch them go idle. He said the city’s identity has been entwined with the railroad for as long as anyone can remember.
“In 1892, the railroad decided this was a good spot for its yards, and the community grew up around it,” Foschi said. “The rail yards really gave birth to Proctor.”