Dennis R. Pierce, president of the Brotherhood of Locomotive Engineers and Trainmen, blasted the practice of PSR in a piece published in the organization’s newsletter.
PSR dates back to the 1980s and was preached by the late railroad boss E. Hunter Harrison, who implemented it at the Illinois Central, Canadian National, Canadian Pacific, and lastly, at CSX Transportation. In recent months, Norfolk Southern and Union Pacific have also implemented their own versions of PSR in an effort to better utilize assets and drive down their operating ratio.
Pierce likens the move to PSR to the creation of the PC and the effort to turn a profit by selling off assets.
“Penn Central’s shippers and workers were mere afterthoughts,” Pierce writes.
“PSR is nothing more than what has been called by many industry observers, and with good
reason, vulture capitalism,” Pierce writes. “Hedge fund investors swoop into a company and drive down operating costs in order to wring out every possible dime in profits, but don’t share those profits with the workers who created them.”
The union boss also raised concerns about the reliance on distributed power to help move longer trains over the road, a practice Pierce calls “dangerous.”
Pierce concluded by noting that BNSF Railway, the largest privately held Class I railroad, has not introduced PSR.
“Perhaps BNSF understands history, or maybe it knows that short-term gain for a few ultra-wealthy investors at the cost of long-term pain for everyone else is not a plan for long term success,” Pierce writes.
I seldom agree with unions, but I fully agree this time
PSR is nothing more than a catchphrase to infatuate stockholders. Most railroads ran scheduled freight trains in tight windows long before this charade showed up. If anybody thinks abandoning shippers and operating three-mile freight trains is a good business model, you’re sadly mistaken. A train crew’s salary is a minuscule fraction of the revenue generated by an average freight train. Operating ratios in themselves are not indicative of the financial health of a railroad. Just compare CSX and BNSF. The latter is superbly maintained, while CSX would rather spend less to make the stockholders happy. And, as President Pierce pointed out, BNSF does not subscribe to PSR, and their railroad has been the gold standard for many years.
Railroad men and women belong to unions because they are necessary. For those doubters, just remember railroad tycoon Cornelius Vanderbilt’s famous “Public be damned” tirade after being criticized in the press. If he thought of them that way, just think of how he treated his employees. By the way, Vanderbilt’s waterfront Newport, RI summer mansion will be open for viewing soon. Make sure you wipe your feet before you enter.
Mr. McFarlane I love your theory. That would be hilarious!
One of the labor issues was management telling labor that the railroad had no money for pay raises and then telling wall street we make lots and lots of money. Now which management story is labor going to believe?
Well, it seems labor blaming management for Penn Central’s problems is surely the pot calling the kettle black.
Labor and Management have been battling each other to the bottom for over a century in their efforts to extract more loot for themselves, at the expense of everything else.
Disclaimer: Looting is all there is, or ever was.
How many railroads are gone because of union instragence?
A railroad, like any other corporation does NOT exist for the benefit of the workers and forking over tax money to bloated badly run governments.
Maybe another name for PSR is COMMON SENSE RAILROADING .
Or maybe, just maybe, BNSF has been running scheduled trains for ever and just never officially called it anything…so there’s no need for them to implement anything.