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10870One Man Crew

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  • Stephen G. Myers
    Mar 1, 2005
    • 0 Attachment
      One-person crews: How much of a savings?
      The Class I railroads served Section 6 notices in November and are in the
      midst of negotiations with the Brotherhood of Locomotive Engineers and
      Trainmen and United Transportation Union. Among the items on the table
      are one-person train crews for road operations, which, according to
      MorganStanley railroad analyst Jim Valentine, came into play just this
      week. Based upon information received from industry sources, Valentine
      released a report earlier today that suggests a move to one-man road
      crews "could save the industry over $1 billion annually, resulting in 11%
      to 32% higher earnings per share than 2004 levels."

      "While we are enthusiastic about the prospects of one-man crews, we
      caution investors that there are many hurdles that will need to be
      overcome before this becomes reality, and thus it's unrealistic for
      investors to expect closure on this issue any time in 2005," Valentine
      said. "Even 2006 may be optimistic. Historically, railroad labor
      negotiations have lasted well over a year and often times can drag on for
      multiple years."

      Presumably, one of the hurdles Valentine is referring to that will have
      to be overcome is the technology that will make one-person crews
      possible. This is Positive Train Control, which the industry is currently
      struggling with from a feasibility and cost-effectiveness basis. One of
      the biggest hurdles for PTC is interoperability, among railroads and
      among the different, largely-proprietary systems suppliers are currently
      offering. Several major railroads are either deploying pilot PTC systems
      or considering them, and it will most likely take far longer than the
      current labor negotiations to develop interoperable PTC architecture that
      the railroads can agree upon. Cost estimates for implementing PTC on a
      national basis have been as high as $10 billion.