Ken Hoexter Bank of America conference.
I think the next big step then, let’s talk about your union negotiations, right? Maybe just talk about the process so people don’t quite understand how your contracts become amendable. They don’t actually expire, but then the process takes years, right, in order to get to that next level. So, we have always talked about the ability to go from 2-man crews to 1-man crews or even autonomous at some point. Maybe just about the process to get to 1-man crews. And your thoughts on, is that something that then goes system-wide? Is it tested in a region? How does that develop onto the rail network when you ultimately maybe convert or are able to get that through negotiations?
Lance Fritz
Yes. Let’s briefly package that all together, Ken. Process starts, you are exactly right. All of our collective bargaining agreements are evergreen. They have provisions in them called moratorium provisions that prevent either labor or management from forcing negotiation on topic for a set period of time. That moratorium in the current timeframe expired at the end of 2019. So, we have been in negotiations for about 1.5 years now. It is a very long laborious process. There is a very discrete mapped out time lines and process owned by the National Mediation Board. We collectivize through all the railroads working through the NRLC and the unions tend to collectivize in smaller groups. And we’ve been working at it, but it’s slow going. Our primary demand as management is to get flexibility in crew concept in the cap of the locomotive. That’s shorthand for saying we think there is an opportunity to take one person out of the capital locomotive and put them on the ground to support multiple trains in sort of – instead of riding and supporting only one train. That process is going to be hard because, of course, that’s a difficult pill to swallow for the union representing that employee. It’s a significant change for them, and it’s going to require significant negotiation to achieve.
What we’re trying to do isn’t to say we want as soon as we get that right to do it across the network everywhere right now. What we want is we want the option to be able to do that everywhere where it makes sense in the context of what was negotiated with labor and what would be allowed by our safety regulator in the FRA. I personally think it’s going to be something we achieve. I’m hoping we achieve it this round. And once achieved, what you’ll see us do is start taking employees out of the capital locomotive, putting them on the ground in certain areas where it makes sense first. It’s actually a good thing for the employee that’s impacted because they move from being on call which is their normal life as a transportation employee working over the road, and they turn into shift work. That’s great for issues of fatigue management, for normalcy in life. You’re no longer going away from home and staying away from home on your trip. So I think it’s a strong benefit to labor, but it’s a hard negotiation then.