Tuesday, September 20, 2022

Profits not Workers

 They have fought to deny sick days and other vital benefits to workers in the rail freight industry and the safety of workers and communities, meanwhile, has been put in jeopardy by executives who have fired workers and increased hours, train operator executives have been rewarding shareholders with billions of dollars in stock buybacks and dividend bumps.

According to Railroad Operators: Bad for Workers, Good for Investors, a collection of data compiled by the Groundwork Collaborative, a handful of major rail companies reported more than $10 billion in buybacks and dividends over the first six months of 2022.

"Our research shows just how far railroad executives will go to funnel record profits to their shareholders—even if that means stagnant wages, inhumane attendance policies, and throwing our supply chain into further turmoil," Mike Mitchell, director of policy and research at Groundwork Collaborative, explained.

Groundwork found that Union Pacific is leading the pack in 2022. Rather than using billions of dollars in revenue to improve pay and job conditions, Union Pacific gave $5 billion to shareholders through buybacks and dividends in the first six months of this year alone. CSX, for instance, funneled nearly $3 billion in buybacks and dividends to investors from January through June, while Canadian National Railway reported $2.3 billion in stock buybacks during the same time period.

Norfolk Southern's chief financial officer Mark George said on a July call that "shareholder distributions are up and you'll observe here the 19% higher dividend payments through six months on top of continued strong share repurchase activity."

Railroads have been enjoying record profits after decades of deregulation, consolidation, and "just-in-time" practices known as "precision railroad scheduling" transformed the industry into what Sarah Miller, executive director of the American Economic Liberties Project, describes as "another monopolized cash cow for Wall Street."

Union Pacific chief executive officer Lance Fritz told investors on a July call that the company had cut staff by a third since 2018 and said, "We've got to do some other unique and creative things with our labor unions in order to make our crews more available and more productive."

 He also said that Union Pacific is prepared to make further staffing cuts during an economic downturn, asserting that conductor-less trains would be "better for the conductors' quality of life."

While Fighting Workers, Railroads Made Over $10 Billion in Stock Buybacks (commondreams.org)

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