Brotherhood of Maintenance of Way Employes Division of the International Brotherhood of Teamsters

�EWS CLIPS

March 29, 2013

Randall Brassell, Director of Communications

Telephone: 615-521-4097 (Fax) 615-824-2164

Email: rbrassell1@aol.com

3/25/2013 12:00:00 PM

Capitol Corridor ridership, revenue fell in February

Capitol Corridor posted mixed performance results for February, with ridership and revenue down compared with February 2012, but on-time performance up to 97 percent, the best in the Amtrak system. Ridership dropped 8.2 percent while revenue declined 2.7 percent in February, Capitol Corridor Managing Director David Kutrosky said in a prepared statement. Half of the ridership loss was primarily due to February 2013 having one less day than February 2012, which occurred in a leap year. In addition, about 70 percent of the loss is attributed to performance at three stations: Sacramento, down 12 percent; Davis, down 11 percent; and Richmond, down 15 percent. Moreover, some midday trains are under performing compared with year-ago levels. Capitol Corridor officials are considering targeted marketing techniques to increase ridership on those trains, as well as working with Amtrak to reallocate poorer performing trains to more attractive ridership times to optimize revenue and reduce operating costs, Kutrosky said. Since early January, Capitol Corridor staff have been working with Amtrak and other agency officials to reduce delays from locomotives and bridge lifts at the Suisun-Martinez crossing over the Carquinez Strait. As a result, there were no train cancellations/annulments in February, Kutrosky said. Mechanical delay minutes dropped 67 percent in February compared with December 2012, when service disruptions were at a pinnacle, he said, adding that bridge delay minutes also dropped significantly. Furthermore, delays related to the host railroad, Union Pacific Railroad, continued to decline. UP delay minutes per 10,0000 train-miles were 460 in January, the latest month for which results are available, the third-lowest level since October 2009 when the Federal Railroad Administration required the delay reporting, said Kutrosky.

3/26/2013 10:30:00 AM

FRA amends track, passenger equipment safety standards

The Federal Railroad Administration (FRA) recently served notice that it's issuing a final rule to amend track and passenger equipment safety standards in order to promote the safe interaction of rail vehicles and track under a variety of conditions at speeds up to 220 mph. To take effect July 11, the final rule revises standards for track geometry and safety limits for a vehicle's response to track conditions, enhances vehicle/track qualification procedures and adds flexibility for permitting high cant deficiency train operations through curves at conventional speeds, FRA officials said in a notice published in the Federal Register.

In addition, the rule institutes more cost-effective equipment qualification and in-service monitoring requirements, and clarifies that individuals qualified to inspect track need only understand the portions of the regulation relevant to the inspections they conduct and the work they perform. "The rule accounts for a range of vehicle types that are currently in operation, as well as vehicle types that may likely be used in future high-speed or high cant deficiency rail operations, or both," FRA officials said. "The rule is based on the results of simulation studies designed to identify track geometry irregularities associated with unsafe wheel/rail forces and accelerations, thorough reviews of vehicle qualification and revenue service test data, and consideration of international practices." An FRA analysis of the rule's economic impacts found it wouldn't adversely impact an existing operation or induce any net costs. The anticipated benefits relate to equipment procurement for passenger trains at speeds exceeding 90 mph; operations at high cant deficiency for passenger trains at speeds up to 90 mph; and streamlined testing requirements. Petitions for reconsideration of the final rule must be received by the FRA on or before May 13. Comments in response to petitions for reconsideration must be received on or before June 26.

TEAMSTERS TAKE DEMANDS FOR U.S. WORKERS’ RIGHTS TO NATIONAL EXPRESS GROUP HEADQUARTERS

U.S. School Bus Workers Join UK Trade Unionists

(BIRMINGHAM, England) – Teamster school bus drivers who work at National Express Group PLC (NEX: LN) rallied with British members of Unite the Union outside the company’s headquarters today, demanding the multinational transport company honor the human rights of its North American workers.

The drivers expressed their concerns over what the union believes are National Express’s anti-worker, anti-union policies in its North American operations, which includes Durham School Services L.P. (“Durham”) in the U.S. and Stock Transportation in Canada.

They delivered a letter from Teamsters General President Jim Hoffa to National Express Group Chief Executive Dean Finch, calling on National Express to better respect the rights of its workers. Read the letter at www.teamster.org/hoffanexletter.

“It is deeply concerning when a United Kingdom-based public limited company engages in conduct that violates U.S. workers’ rights and deprives them of decent working conditions and respect. National Express’s subsidiaries should be operating in the pursuit of the highest standards, not failing to uphold the human rights that should be afforded to all its workers throughout the world,” Hoffa said.

Sebrina Isom, a former Durham driver and member of Teamsters Local 509 in West Columbia, South Carolina, USA, came to England for the second year in a row. The 25-year school bus driver traveled there to speak up for U.S. school bus workers.

“We are here to hold this company accountable. In my view, their anti-worker behavior has to stop,” Isom said. “We transport children, we work hard and it’s not too much to ask that National Express take more responsibility and treat us with fairness and respect.”

“I believe National Express has earned the reputation in all its operations as being the most hostile of the big British employers toward its employees,” said Tom Cashman, a National Express driver and shop steward from the South East coach station.

The delegation of Teamster school bus workers is meeting this week with major National Express stakeholders—union leaders, investors and political leaders—about the company’s negative human rights and labor relations record in North America.

The National Labor Relations Board (NLRB), which oversees U.S. labor law, issued 57 informal complaints since 2001 against Durham. These complaints resulted in settlements.

The complaints came as a result of charges by Durham workers, including disparate treatment, discipline and discharge of employees engaged in union organizing; surveilling workers engaged in union activity; and threating workers with reduction in benefits, working conditions and the loss of employment for supporting unionization.

Durham recently filed objections with the NLRB to the union election in Santa Rosa County, Florida, USA, despite a strong vote in favor of unionization by the workers. The company claimed that the NLRB held no authority to investigate or hold a hearing, relying on a recent court decision—a theory that the Teamsters believe would disenfranchise the workers. The NLRB’s decision is pending.

“We voted overwhelmingly to have our union, but the company is not respecting our decision,” said Diane Bence, a Durham driver from Santa Rosa County who traveled to Birmingham, U.K. “Durham told us they would respect our vote, but that was before we voted. After the vote, the company didn’t respect what the majority of us wanted.”

National Express is the second-largest operator of school bus services in North America. The Teamsters represent 4,700 National Express workers. The company reports that 94 percent of the U.K. work force is covered by a collective bargaining agreement, as compared to only 32 percent of its North American work force.

Drive Up Standards is a global campaign to improve safety, service and work standards in the private school bus and transit industry. For information on the Teamsters Drive Up Standards campaign, go to http://www.driveupstandards.org.

Founded in 1903, the Teamsters Union represents 1.4 million hardworking men and women throughout the United States, Canada and Puerto Rico. Visit www.teamster.org for more information. Follow us on Twitter @Teamsters and “like” us on Facebook at www.facebook.com/teamsters.

3/27/2013 10:30:00 AM

U.S. Class I workforce grew incrementally in February

Employment levels at the U.S. Class Is increased a skosh last month. As of mid-February, the large roads employed 162,228 people, up 0.1 percent from January's level and 0.9 percent from February 2012's mark, according to Surface Transportation Board data. Only two employment categories registered month-over-month declines: maintenance of equipment and stores, down 0.4 percent to 30,046, and executives, officials sand staff assistants, down 0.1 percent to 9,838. The size of U.S. Class Is' professional and administrative staff was relatively flat at 14,143, while their maintenance of way and structures force rose 0.6 percent to 36,268, transportation (train and engine) ranks inched up 0.1 percent to 65,135 and transportation (other than train and engine) workforce ratcheted up 0.1 percent to 6,798. On a year-over-year basis, only the transportation (T&E) sector shrunk, decreasing 0.4 percent. The other categories posted the following gains: executives, officials and staff assistants, 3.5 percent; professional and administrative staff, 2.4 percent; maintenance of way and structures, 1.5 percent; maintenance of equipment and stores, 1.5 percent; and transportation (other than T&E), 1.3 percent.

NLRB sees strong uptick in social media cases

By Carlyn Kolker

NEW YORK (Reuters) - The National Labor Relations Board has seen a strong uptick in the number of cases involving social media after a pivotal complaint was filed in 2010, acting general counsel Lafe Solomon said Tuesday at a panel at Fordham Law School.

In 2010, the NLRB issued a complaint against American Medical Response of Connecticut, an ambulance service, over its firing of an employee for complaints she made on her Facebook page about company management.

The case settled in 2011 after the company agreed not to discipline workers for discussing their working conditions.

"The case went viral," Solomon said, speaking at a conference entitled "Privacy & Employment in the Digital Society."

"Because of the exposure of that case, we've had over 100 charges filed with us," Solomon said.

Broadly speaking, he said, the charges tended to fall into two categories: ones challenging the discharge of an employee and ones disputing a company's social media policy.

After the American Medical Response case was filed, Solomon began reviewing corporate social media policies that the NLRB challenged and determined that many companies had overly broad policies.

"I talked to a lot of groups and HR groups, and most companies would admit that at least two years ago their policies were written without consideration of workers' rights. They were written very, very over broadly," said Solomon.

For example, he said, some companies unlawfully prohibited workers from discussing confidential company information on social media. Some confidential information can be discussed, such as wage information, because under federal laws workers are permitted to discuss their conditions of employment and act with other employees to improve their wages or work conditions.

After the American Medical case was initiated, Solomon issued three reports on social media cases and policies in an effort to provide guidance on topics such as confidentiality, privacy, protection of proprietary information and contact with the media. The last report was issued in May 2012.

Solomon also made reference to a recent ruling challenging the legitimacy of the NLRB's actions. In January the District of Columbia Circuit Court of Appeals said that three so-called recess appointments President Barack Obama made to the board were invalid. The ruling cast doubt on the board's rulings since the appointments were made in January 2012.

"It doesn't affect my rulings," Solomon said of the dispute, noting that he was not appointed through a recess appointment.

"The government, including myself, strongly believes the D.C. Circuit opinion is based on the wrong analysis," Solomon said.

The NLRB said last week it would seek Supreme Court review of the appeals court's ruling.

VW says U.S. workers to decide if they wish to unionize 8:11pm EDT By Ben Klayman

(Reuters) - Workers at Volkswagen AG's (VOWG_p.DE: Quote, Profile, Research, Stock Buzz) plant in Chattanooga, Tennessee, will decide whether they want union representation, and the United Auto Workers is just one option for them, VW's top executive in North America said on Wednesday.

Jonathan Browning, head of Volkswagen of America, said in an interview at the New York auto show that the company expects Chattanooga plant workers to have a strong voice in its operations.

"We certainly are interested in hearing from the employees as to whether they believe formal representation is something that they desire," he told Reuters.

"If employees vote in favor of formal representation, then it's important to understand that there are a number of alternatives that may or may not include the UAW."

Browning said no such vote has been scheduled and the issue is in the very early stages of discussions. He added that as far as he knew VW's supervisory board also had not discussed the issue officially.

Historically, auto plants in the American South have been hostile to unions. In March 2012 the UAW tried to get signatures of support from workers at the VW Chattanooga plant. The efforts never gained traction.

Earlier this month, a letter from a top official at IG Metall, the union that represents VW workers in Germany, to Chattanooga plant workers urged them to join the UAW.

Also this month, Horst Neumann, VW's board member in charge of human resources, said the company was in exploratory talks with the UAW about setting up a German-style labor board at the Tennessee factory. Browning said the IG Metall letter and Horst's comments "moved the discussion along further."

If the plant's workers decided to join the UAW, they would be the first workforce of a foreign-owned major auto assembly plant to do so in recent years.

Expanding his union's membership by organizing an assembly plant of a foreign automaker has been a goal by UAW President Bob King since his tenure began in mid-2010. The UAW is hoping that the endorsement of the influential German union IG Metall will boost its efforts to organize workers in Chattanooga.

VW's U.S. officials have long held the view that its workers in Tennessee will decide whether to accept the UAW as their voice in negotiations. Browning on Wednesday said the alternatives could include other unions or the hourly workers at the Chattanooga plant possibly forming their own union. He called the creation of a new union a "remote possibility."

Browning said he had no idea what the time table for the issue might be, but said it was "complex" and would take time to work out. "There are a lot of people engaged and participating in the discussion so I wouldn't expect a quick resolution."

The union is also active in talking about organizing with workers at two Nissan Motor Co (7201.T: Quote, Profile, Research, Stock Buzz) plants, which are in small cities near Jackson, Mississippi, and Nashville, Tennessee.

Nissan Chief Executive Carlos Ghosn said at the auto show on Wednesday that it wasn't the first nor would it be the last time the UAW tries to organize his company's U.S. plants. He said the workers at those plants would decide that issue, but added the company prefers direct communication with its employees.

Ghosn more directly opposed the UAW in 2001. As a union vote was drawing near at the company's plant in Smyrna, Tennessee, Ghosn made a big-screen video pitch to workers at the plant. "Bringing a union into Smyrna could result in making Smyrna not competitive," he said.

Smyrna workers turned back the UAW, 3,103 to 1,486.

Also at the auto show on Wednesday, Hyundai Motor (005380.KS: Quote, Profile, Research, Stock Buzz) America head John Krafcik declined to comment on the UAW's desire to organize the company's U.S. plants. A spokeswoman for Daimler AG's Mercedes (DAIGn.DE: Quote, Profile, Research, Stock Buzz) said the German automaker was neutral on the subject and union representation at the company's Alabama plant was up to the workers.

Browning also said on Wednesday that VW is studying building a mid-sized SUV based on a concept vehicle shown at the Detroit auto show in January and officials have said a decision is expected some time this year. He said such a vehicle would be built in North America, but that would be decided as part of the process.

(Reporting by Bernie Woodall and Ben Klayman; Editing by Gerald E. McCormick, Andrew Hay and Lisa Shumaker)

3/28/2013 9:30:00 AM

Key sectors other than coal will outpace slow economic growth, CSX's Ward says

CSX Corp. last year "successfully withstood" a significant drop in coal business by making quick operational adjustments and focusing on safety, service and productivity, said Chairman, President and Chief Executive Officer Michael Ward in the Class I's recently released 2012 Annual Report. "Experience has shown that when CSX does those things well, we can turn good conditions into great results, or bad conditions into better results," Ward said, noting that last year, employees led the major U.S. freight railroads in safety, and the Class I drove customer satisfaction levels to all-time highs and delivered productivity savings of about $200 million. Looking ahead, key business sectors other than coal will outpace the slow, steady growth that is expected in the economy this year, Ward said. "Our customers across many industries believe that America is primed for real recovery, and so do we," he said. Ward explained that CSX's confidence in the long-term rail industry outlook is based on: the

inevitable movement of more freight as populations and consumption rise; the pressing need to deliver freight efficiently between ports as global trade continues to build; the increasing congestion on the nation's highways, which is driving freight to rails; the re-industrialization of America; the challenges associated with trucking companies' labor, fuel and other costs; and the nation's need for more environmentally friendly transportation options.

TEAMSTERS STRIKE AT REPUBLIC SERVICES/ALLIED WASTE IN

YOUNGSTOWN, OHIO Sanitation Workers Go On Unfair Labor Practice Strike; Co-Workers in Evansville, Ind. and

Urbana, Ill. Refuse To Work In Show of Support

(Youngstown, Ohio) – Sanitation workers employed by Republic Services/Allied Waste [NYSE: RSG] went on strike in Ohio last night to protest the company’s violations of federal labor law. Workers at Republic’s Carbon Limestone landfill outside of Youngstown put up a picket line instead of reporting to their shifts late yesterday.

The striking workers are members of Teamsters Local Union 377. They are exercising their rights under federal law to strike in protest of Republic illegally changing working conditions without bargaining and the company’s continued refusal to provide pertinent information related to bargaining.

Sanitation workers at other Republic locations have subsequently refused to work in a show of support of their striking colleagues. Sanitation drivers in Youngstown are honoring the picket lines of their striking co-workers at the landfill. In addition, workers at Republic/Allied Waste in Evansville, Ind. and Urbana, Ill. refused to work today in support of the striking employees at Republic’s landfill.

The sanitation workers who are refusing to work in Evansville and Urbana are members of Teamsters Local Unions 215 and 26, respectively. These workers have the right under federal labor law to refuse to cross picket lines or to refuse to work in support of striking workers at other Republic/Allied Waste locations.

“For more than a year now, Republic has been trying to squeeze every last cent out of their workers by cheating them out of pay, ignoring health and safety protections, raising their health care costs, and cutting their retirement benefits,” said Ken Hall, Teamsters General Secretary-Treasurer.

“Sanitation work is the fourth most dangerous job in the country, yet Republic has been bullying these workers by locking them out of their jobs without pay, withholding paychecks, and demanding contract concessions - even though it makes hundreds of millions in profits each year,” Hall said. “This company thinks these workers aren’t strong enough to fight back, but they’re wrong.”

Republic’s strategy of disrespecting and endangering workers also extends to the communities in which it operates. During the past year, Republic/Allied Waste has forced multiple lockouts and strikes, disrupting trash collection and putting communities at risk across America in an effort to maximize profits for shareholders such as Bill Gates.

In March 2012, Republic/Allied Waste refused to honor a binding contract with its sanitation workers in Mobile, Ala. The workers were forced to strike to protest the company’s illegal behavior, and took their picket lines to other cities across the country. Fellow Republic/Allied Waste workers refused to cross picket lines in six other cities.

In May 2012 in Evansville, Republic Services intentionally left the city without reliable trash service for six weeks, locking out its workers without pay just to teach them a lesson. Out-of-town replacement drivers damaged people’s homes, vehicles and even power lines during the lockout. The Indiana workers took their picket lines to other cities across the U.S. Fellow Republic/Allied Waste workers refused to cross picket lines in five other cities.

“Sanitation workers put their lives on the line every day to protect the public health. They deserve to be treated with dignity and respect,” said Robert Morales, Director of the Teamsters Solid Waste, Recycling and Related Industries Division. “Communities should also be aware of what Republic is doing to put their residents’ health at risk. And it’s not just trash service disruptions. Republic’s record of endangering the public is getting worse – just ask Missouri and Ohio.”

In Bridgeton, Mo., an ongoing fire at Republic’s landfill is of increasing concern. The fire is next to buried radioactive nuclear wastes. The EPA’s anti-terrorism plane has detected radiation in the air, and noxious fumes are making residents sick. The Missouri Attorney General has just announced a lawsuit against Republic in order to force it to correct its environmental violations and to provide remedies to help local residents and businesses deal with the ongoing effects of the burning waste. The lawsuit also seeks to order Republic to pay for ongoing environmental testing for compounds such as dioxins, hydrogen cyanide and sulfur dioxide.

In Youngstown, a planned natural gas fracking project on the site of Republic’s landfill has residents concerned about air pollution that will be generated from the industrial process of oil and gas production. In Stark County, Ohio, odors and other environmental violations stemming from underground fires at Republic’s Countywide landfill led to a $10 million fine from the EPA and an 800-plaintiff lawsuit against Republic that was just settled in March 2013.

Republic/Allied Waste’s total revenues were more than $8.2 billion in 2011, with profits of more than $589 million. In May 2012, the same month it locked out its workers in Evansville, the company approved a death and disability benefit for its CEO valued at more than $23 million. Bill Gates is the primary shareholder of Republic stock. Gates owns approximately $2.4 billion worth of stock, or 25 percent of the total worth of the company. Michael Larsen, Gates’ investment manager, sits on Republic’s board of directors.

Founded in 1903, the International Brotherhood of Teamsters represents 1.4 million hardworking men and women throughout the United States, Canada and Puerto Rico. Visit www.teamster.org for more information. Follow us at www.PickUpTheGarbage.com, on Twitter @RepubTeamsters and on Facebook at www.facebook.com/RepublicServicesTeamsters.

Labor unions call first day of Right-to-Work law 'dark day' for

Michigan

Thursday, March 28, 2013 5:22 PM EDT

By CAROL HOPKINS carol.hopkins@oakpress.com; Twitter: OPCarolHopkins @opcarolhopkins

The first day of Michigan’s new right-to-work law brought a range of reactions from both sides of the issue. UAW Local 653 President Mike Warchuck had choice words. “It’s a sad day for labor,” said Warchuck, from his office in Pontiac where he represents 1,200 autoworkers. “This law has no place in Michigan. It’s a dark day in history.” The law allows workers to choose not to financially support unions that bargain on their behalf. The right-to-work law measure passed in December 2012, making Michigan the nation's 24th state to pass it. The law that took effect applies to labor contracts that are extended or renewed after Wednesday. Many unionized employees won’t be affected for months or years. The Bureau of Labor Statistics reports 629,000 wage and salary workers were union members in 2012. Of the 1,013 Michigan adults surveyed this winter by Michigan State’s Institute for Public Policy, 42.7 percent said they believe the new law will help the economy. Another 41 percent said it will hurt. Michigan Freedom Fund President Greg McNeilly said: “This is a monumental day for working families in Michigan. “Joining a union—or not—should be an individual worker’s choice and now here in Michigan, making that choice will not cost one worker his or her job. Michigan took a huge step forward today in the battle to protect residents’ civil rights and to empower working families.” U.S. Rep. Kerry Bentivolio, R-Milford, backs right-to-work legislation. "In addition to giving workers more freedom, Right to Work increases Michigan's competitiveness in the global economy and will attract more middle-class jobs to our state." Al Lewis, business representative with Teamsters Local 214, which represents employees in Waterford and Pontiac, said he believes many employers didn’t want the law to pass. “Many tried to get their contracts in under deadline,” he said. “There were some late-night sessions.” Lewis didn’t elaborate, saying he was concerned a community might be targeted for retaliation by state officials.

Other states have changed over to become right-to-work over the years, said Warchuck. In those states, he said, the “vast majority continue to the support the union.” The workers who don’t pay dues have a nickname, free riders, he said. “They are still entitled to all benefits. I’m not happy about that.” He said he could publish a list of members in good standing, but “I’m not going to do that,” he said. Lewis, who represents about 130 employees at Waterford Township government, does not believe the law makes Michigan more competitive. “That rationale of fairness doesn’t make any sense.” If too many drop out of the union, the Teamsters may “not be able to afford to represent them,” he said. “If that happens, I feel sorry for those folks.” Union officials said rallies were held in more than a dozen locations including Ann Arbor and Detroit. UAW’s Warchuck is hopeful unions will prosper despite the new law. “We’ll work collectively to maintain our membership,” he said. “I believe the membership will recognize (staying with the union) is the right thing to do.” AFL-CIO members said many rallies were held around the state Thursday. “Today we rally and tomorrow we organize,” said Michael Salib, a retiree from Dundee, attending one rally. “Whether the solution is political or legal, so-called right to work will not stand.” Supporters of the law hailed Thursday as the beginning of a new era. (The Associated Press contributed to this report)

Labor Unions Urge Chapter 11 Reform Bankruptcy has become a way for U.S. companies to reorganize and restructure on the backs of their employees, said union executives at a recent hearing.

When companies declare bankruptcy, increasingly it’s the unionized employees bearing the brunt of financial restructuring. At least that’s the view of union heads who spoke at the American Bankruptcy Institute’s latest field hearing on reforming Chapter 11 law. In recent years, they said, distressed businesses have rejected collective-bargaining agreements (CBAs) and terminated retiree health benefits and pension plans without seeking equal sacrifice from other stakeholders and creditors. There’s evidence to support the claim: 363 sales – in which a buyer structures the deal as a purchase of assets and doesn’t take on the debtor’s obligations – represent 21% of all business bankruptcies since 2000. Such

structures are allowing companies “to facilitate escape from pension obligations,” said Joshua Gotbaum, director of the Pension Benefit Guaranty Corp. The obligations get shifted to the PBGC, which is funded by premiums collected from defined-benefit plan sponsors. Gotbaum cited numerous cases where this had occurred – Friendly, Georgetown Steel, Levitz, Mosler, Oxford Automotive, and Relizon. Executives from the Air Line Pilots Association, the Association of Flight Attendants, the International Association of Machinists and Aerospace Workers, and the Transport Workers Union said workers’ rights in all kinds of bankruptcy cases have been eroded. Although reforms to bankruptcy law in 1984 established a collective-bargaining process in bankruptcy cases, “the process is in need of legislative reform,” said Michael Robbins, director of government affairs for the Air Line Pilots Association, in his prepared statement. “Presently, the process works as a business strategy to pressure employees into giving up huge percentages of their pay, long-term working conditions, and retirement plans, while other creditors and stakeholders are often not so negatively impacted.” Rep. John Conyers (D. Mich.) introduced H.R. 100, the Protecting Employees and Retirees in Business Bankruptcies Act, in January. Unions are backing the bill enthusiastically. But at the hearing bankruptcy lawyer Michael Bernstein of Arnold & Porter argued that the amendments to bankruptcy law in H.R. 100 “would make Chapter 11 reorganization more costly and more difficult to achieve.” Much of the discussion at the mid-March hearing concerned Section 1113 of the U.S. code. While Section 1113 gives debtors the authority to ask a bankruptcy court to reject labor contracts, the company must go through a negotiation and litigation process with its unions. H.R. 100 would bolster some of the standards the debtor has to meet to win approval for a labor agreement modification or termination. For example, according to David Jury, general counsel of the United Steelworkers, the bill would force a debtor to justify the worker concessions with a detailed business plan; establish a presumption against rejecting a CBA when senior executives receive incentive pay or bonuses during or in the six months before bankruptcy; and require the court to make a finding that the debtor’s proposal would not cause the purchasing power of the affected employees to materially diminish. Lack of a business plan was an issue in the November 2011 bankruptcy of American Airlines, said James Campbell Little, president of the Transport Workers Union of America AFL-CIO. While employees ratified a new CBA in that case, there was no immediate need for Section 1113 relief, he said, and “there were not market-tested projections or [a] business model against which all constituents were being asked to make sacrifices.” (On Wednesday a bankruptcy court approved American’s merger with U.S. Airways.) Panelists also suggested more moderate changes to parts of the bankruptcy code. For example, retired bankruptcy judge Stephen Mitchell said the 14-day mandated time frame for a court hearing on a Section 1113 motion is insufficient. “The time required for even “modest discovery into the financial need for the relief makes even 21 days completely unrealistic,” Mitchell said in his prepared testimony, “particularly given the gravity and complexity of the issues at stake." But Bernstein, the bankruptcy attorney, said that delaying the Section 1113 process would make bankruptcy more expensive and risky for the company. “Labor costs are often a gating item in a chapter 11,” said Bernstein in his prepared statement. “Other essential elements, including (but not limited to) obtaining exit financing and other new investment capital typically require knowing the company’s post-emergence cost structure.” No one on the panel seemed to dispute that the Chapter 11 process is putting some workers’ jobs and retirement security at greater risk. But the PGBC’s Gotbaum stressed the commission should seek balance in its recommendations surrounding the issue.

Rather than tweaking the bankruptcy code “for this interest or that,” the reform commission should think broadly, he said. “In one sense, we’re arguing to return equity to courts of equity,” he said. “Think about what level of specificity is right for setting the priorities among creditors and the allocations of powers and leverage – and what should be reserved for bankruptcy judges.” Renewed protection for workers in bankruptcy could be a key part of any Chapter 11 reform. Mitchell, the former judge, said that authorizing companies to reject a CBA or terminate retiree benefits or a pension plan were “easily the most difficult decisions I had to make as a bankruptcy judge.” The ABI Commission aims to submit a proposal to overhaul the U.S. bankruptcy code, and it plans to issue its recommendations in April 2014. The hearing on March 14 was one of five scheduled between now and early June.

The Hill 03/29/13 GAO report: California high-speed rail estimates ‘reasonable’ By Keith Laing

Ridership and revenue estimates for a controversial high-speed railway proposal in California are “reasonable,” according to a new report from the Government Accountability Office (GAO). Republicans in Congress have questioned estimates for the proposed railway, which has received more than $3 billion in funding from the Obama administration. However, the GAO said this week that the numbers being used by backers of the project are OK, even as the agency called for further study of the figures. GAO found the [California High Speed Rail] Authority's ridership and revenue forecasts to be reasonable; however, additional updates are necessary to refine the ridership and revenue model for the 2014 business plan,” the report said. GAO also found the travel-demand-modeling process used to generate these forecasts followed generally accepted travel- demand-modeling practices,” the assessment said. “For example, the authority revised several assumptions, such as gasoline price forecasts, to reflect changes in current and anticipated future conditions. However, additional updates, such as the development of a new travel survey, will be necessary to further refine these forecasts and improve the model's utility to make future decisions. External peer review groups have also recommended additional updates.” The GAO placed blame for problems with the estimates on the Federal Railroad Administration, which the report said “issued limited guidance for preparing cost estimates, and this guidance did not reflect best practices in the Cost Guide.” The GAO recommended that the railroad agency improve its rules for estimating the costs of new projects, adding that California officials did follow the existing standards. The California high-speed railway has emerged as a point of contention between Democrats

and Republicans because it is the centerpiece of President Obama’s proposal for a network of nationwide railways that would eventually rival the interstate highway system. The California railway received the largest portion of $8 billion that was included in the 2009 economic stimulus package for rail development, and the project was awarded money that was turned down by other states including Florida, Ohio and Wisconsin. Plans call for trains that would run 220 miles per hour on an 800-mile route if the California railway is ultimately constructed. Republicans have argued that the trains will not attract enough riders to cover the cost of its operations. The GOP has also seized on reports that emerged last fall that the cost of building the line would increase from $33 billion to $98 billion. The GAO said in its report that organizers of the potential railway “met some, but not all of the best practices in GAO's Cost Estimating and Assessment Guide (Cost Guide) for producing cost estimates that are accurate, comprehensive, well documented, and credible.” The report acknowledged validity to some of the GOP’s arguments, saying “by not following all best practices, there is increased risk of such things as cost overruns, missed deadlines, and unmet performance targets.” But the GAO said the California High-Speed Rail Authority “did a comprehensive job in identifying the potential economic impacts of the high-speed rail project." This includes identification of user impacts, such as effects on travel time reliability, and non-user impacts, such as effects on highway congestion,” the report said.