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Lower volumes prompt furloughs at Union Pacific

Amid a drop in rail traffic, Union Pacific has furloughed at least 94 employees, including 43 machinists in 11 locations, according to an official with the International Association of Machinists and Aerospace Workers (IAM).

Josh Hartford, special assistant to the international president of IAM, said employees were told that the furloughs were happening because of plans to store 200 locomotives now and potentially an additional 100 within the next few weeks or months.

UP confirmed that furloughs were occurring in response to lower volumes overall, but did not confirm the storing of locomotives nor the number of workers furloughed.

IAM members are affected by the storing of locomotives because that translates into fewer locomotives for mechanics to maintain.

Members were notified of the furloughs around Aug. 23, according to Hartford, with many of the furloughs occurring at outlier points with smaller repair shops than the bigger shops in Kansas City, Missouri, or North Platte, Nebraska.

“It’s always concerning when they [furlough], but especially at this time of year, there should be an increase in demand. Grain season, harvest season coming on, the holidays coming up — they should be seeing increased traffic. To be parking locomotives now is really concerning,” Hartford said. 

“There’s no indication that this is a short-term furlough,” he added.

Other unions whose members could be affected by furloughs include the International Brotherhood of Electrical Workers (IBEW), the National Conference of Firemen and Oilers (NCFO) and the International Association of Sheet Metal, Air, Rail and Transportation Workers – Mechanical Division (SMART-MD), according to Hartford.

An unconfirmed number of furloughs occurred among SMART-MD members, according to SMART spokesman Ben Nagy. IBEW and NCFO didn’t return requests for comment.

The railroad said it has reached out to individuals affected by the furloughs.

“As a routine part of business, we constantly examine our resources against volume needs,” UP told FreightWaves. “While some targeted furloughs are occurring in a handful of mechanical shops and an intermodal terminal, we are also hiring train crew professionals in several locations impacted by attrition and tight labor markets. Our Recruiting team has connected with every individual impacted by furloughs to consider pursuing other openings. The furloughs represent about 0.3% of all craft employees and 2% of mechanical craft employees.”

Carloads in 2023 have been trending lower than in 2021 and 2022 since May of this year. (FreightWaves SONAR) To learn more about FreightWaves SONAR, click here.

A comparison between grain carloads of the Class I railroads overall and Union Pacific’s grain volumes. (FreightWaves SONAR)

Amid the furloughs, Hartford urged lawmakers to pass the Railroad Employee Equity and Fairness (REEF) Act, which he said has bipartisan support in the House and Senate. The bill also has stakeholder support from the unions as well as from the Association of American Railroads (AAR) and the American Short Line and Regional Railroad Association.

The bill would remove the sequestration constraints on the unemployment insurance program for railroad employees, according to an April release. AAR defines the bill as permanently removing railroad unemployment insurance and sickness insurance benefits from the impacts of budget sequestration, “the only unemployment program to have these impacts.”

A temporary version of the REEF Act was included in the December 2020 COVID-19 relief bill, but those provisions expired on May 10 of this year.

“We need this passed now, because now we have furloughed members using the unemployment benefit at a reduced rate,” Hartford said.

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Click here for more FreightWaves articles by Joanna Marsh.

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