(Reuters circulated the following article by Nick Carey on May 28. Kevin Peek is the Local Chairman and Secretary-Treasurer of BLET Division 456 in Norfolk, Va.)
NORFOLK, Virginia — Like other experienced U.S. railroad engineers, Norfolk Southern Corp.’s
“I feel it through my butt,” the burly 51-year-old said as he relaxed in a short-sleeved shirt and baseball cap in the cabin of his two-story-high locomotive.
After 31 years on the line, he interprets the vibrations coming up through his seat and understands intuitively what’s going on behind him, he said.
U.S. railroads are relying on thousands of veteran employees like Peek to handle a boom in business, but over the next decade, most of these experienced hands will reach retirement.
Executives say this will leave railroads scrambling not just to replace the retirees, but also to add more workers to handle a resurgence in business that no one expected when Peek was hired three decades ago.
“Over the next 10 years I am going to have a huge pool of knowledge walk out the door,” Norfolk Southern Chief Executive Wick Moorman said in an interview at his company’s headquarters.
Much of that pool consists of people like Peek, who literally feel the rails in their bones. He has been operating locomotives around Virginia for so long that from his seat he can feel the train behind him stretching out as he accelerates or bunching up against his back as he brakes.
He can sense this over the humming of the three 4,000 diesel horsepower locomotives that pull the train.
“Sometimes I leave the window open to hear what’s going on, but I can feel everything right here even with it closed,” Peek said, slapping the back of his plush new cabin chair.
ARDUOUS TALENT SEARCH
Finding the next generation of diesel engineers is difficult because life on the rails is lonely and hard. Traditionally dominated by white men, railroads are reaching out to women, minorities and veterans of the armed forces.
“People used to come to us, said Matthew Rose, CEO of railroad Burlington Northern Santa Fe Corp.
In previous decades, solid blue-collar pay and benefits made this a sought-after career for American men, even as job openings became scarce.
The railroads were in poor shape in the 1970s and slid even further after deregulation in 1980. The industry consolidated, leaving a just a few major operators, some regional lines and around 500 short lines.
The surviving railroads shrank their networks and work forces to maximize productivity.
“It used to be we’d go out on the rails and have to ask, ‘How many jobs do we have to lose today? How many can we keep?'” said Jim Young, CEO of Union Pacific Corp.
But in recent years, this 19th-century industry has experienced a remarkable turnaround, for several reasons.
Imports have surged because of outsourcing of U.S. manufacturing to developing nations such as China. U.S. utilities have been switching from expensive natural gas to cheaper coal. And a driver shortage in the trucking industry has prompted shippers to turn to trains.
As a result, freight revenue for the major railroads rose to $44.5 billion last year from $39.1 billion in 2004. The companies have also reported record profits.
But all these favorable trends have forced the railroads to deal with their own work force problems. Engineers, conductors and other rail workers with 30 years experience can retire at 60 with a full pension. Many workers are nearing this point, and few are likely to stick around once they do.
“Around 99 percent of our rail workers who meet those criteria retire,” said Bob Haulter, senior vice president for human resources at CSX Corp.
Since 2004, the major railroads have been in intensive hiring mode, recruiting the equivalent of 10 percent of their work force annually.
“Eighty-five percent of that is just to cover attrition,” Union Pacific’s Young said. “The rest is to meet the growth in freight we expect.”
Union Pacific has some 50,000 employees and plans to hire 5,500 in 2006.
Railroad officials say unionized rail workers are in the top 3 percent for U.S. blue-collar pay and have good benefits, but the night and weekend hours, as well as requirements to be on call, makes it hard to recruit.
“We are upfront about that because if we don’t make it clear from the start that this is hard work, we waste time and money on people who quit,” CSX’s Haulter said.
The search for workers has been complicated by an aging population in the United States, forcing the railroads to branch out and recruit women and minorities.
“As our work force becomes more diverse, it should become easier to hire from these groups,” said Kathryn McQuade, chief information officer at Norfolk Southern.
The urgent need to hire thousands of workers to meet rising demand should also boost the rail unions, analysts said.
“With railroads reporting record profits, the unions may use that as a bargaining tool in contract negotiations,” said Fitch Ratings analyst Stephen Brown.
Another factor expected to play to the unions’ advantage in years to come is the lengthy training necessary to get new workers ready to handle trains that weigh 20,000 tons.
As it takes up to 18 months to train engineers and conductors, many 2006 hires won’t hit the rails until 2008.
“(Operating a train is) as much an art as it is a craft,” said Rodney Kreunen, Wisconsin’s state railroad commissioner. “You can’t learn it overnight.”