Jay L Schollmeyer Local Chairman 1637 Portland, OR 97215 Email jay@jaysworks.com

   Mr. Rose, on June 10, 1999 I wrote you with concerns about the future of the former BN northern lines. I was quite impressed that you called me personally to assure me that everything was being done to attract business to the northern lines. But unfortunately I have the same concerns that I had one year ago. 

1.      The attached are charts of train starts from the last 5 years as you can see train starts down even more then last year.

2.      Major coal contracts have been lost to the Union Pacific Railroad.

3.      Dave Dealy told one UTU Local Chairman that it was to costly to run trains through that terminal because of a couple personal injuries.

4.      July 17, 2000 BNSF toady announced a rate reduction to move grain to the East, Midwest and Gulf Coast regions beginning September 1, 2000

                   FORT WORTH, Texas, July 17, 2000 -- The Burlington Northern and Santa Fe Railway Company (BNSF) today announced it will reduce wheat rates from most loading stations in North Dakota, South Dakota and Minnesota to destinations in the East, Midwest and Gulf Coast regions beginning September 1, 2000.   

                    Most origins will see rate reductions of between $50 to $250 per carload. "We are moving to a rate structure that better reflects the competitive environment," said Stevan Bobb, group vice president, Agricultural Products.  "The reductions will be spread across all three states, but the largest reductions will affect loading stations in eastern North Dakota and Minnesota."

    From my perspective business has continued to spiral down from one year ago. I think the thousands of BNSF employees on the northern lines deserve to know.

JL Schollmeyer
Local Chairman 1637

cc: UTU members

Train starts taken from mileage reports
for the Vancouver/Pasco long pool
for the 10th, 20th and 30th of each month

Jay L Schollmeyer Local Chairman 1637 Portland, OR 97215 Email jay@jaysworks.com

Mr. Rose,

Mr. Rose, I am writing this because I have great concern as to the future of the Northern Lines.

• Scheduled maintenance has be postponed or canceled.
• My people read the allegations the Port of Tacoma are making about the tariffs to force shippers to use the Long Beach facility.
• Attached are charts of train starts east and west and number of crews we are at the lowest level in four years.
• When we look across the Columbia River we can see with our own eyes the Union Pacific is running twice the trains as us. The attached article from Traffic World {attached} confirms what we see.

Traffic World talks about "double-digit increases in forest products, vehicle and agricultural products traffic". For many years under the former BNRR that is what kept us going when the grain subsided.

 This is email I had received in response the BNSF's announcement of short hauling logs.

To: jay@jaysworks.com

Jay,

The trainmaster they quote is stationed at my terminal, Great Falls, MT. We got a surge of business at Judith Gap,

He has personally told me that he wishes they would go bankrupt, he now has an order out that the Gap can only be serviced during daylight hours--between him & the superintendent, they plan on running this venture out of business--- they had a conductor get hurt there & of course it couldn't have been the fault of the BNSF.

<Name Withheld>

 ----- Original Message -----

From: JLS UTU 1637
To: JD, Fitzgerald
Sent: Saturday, May 29, 1999 3:15 PM

What a concept What a concept Make money by servicing the customers

BNSF Today - May 28, 1999 Forest Products Unit Finds New Market for Sawlogs

When recent instability in the Asian market led to a downturn in export demand for sawlogs, BNSF stood to lose big. But rather than let a solid revenue base slip away, representatives of BNSF's Forest Products unit aggressively sought more stable, short-haul, domestic markets for the sawlogs. Thanks to the efforts of a number of marketing and operations people, not only did they create a new market, they also generated new business and more than doubled revenue in the process.

"The growth in the log business has not been without difficulties," says Mike Gruenke, BNSF account manager, Commercial Products in Spokane. "But with the dedication and hard work of our operations employees, these hurdles are being overcome to produce tremendous revenue growth." Stimson Lumber Company of Arden, Wash., was one company targeted by the team as a potential acquirer of the sawlogs. The facility was among several mills that were having difficulty receiving logs in quantities sufficient to maintain their lumber operations. The lack of a winter

Some 200 flat cars suitable for sawlogs were in storage in January. Today, 90 percent of those are back in revenue log service. freeze resulted in soft conditions that made it virtually impossible for lumber trucks to reach the wooded areas which have traditionally been the source of sawlogs for lumber mills.

Since January 1999, BNSF's sawlog revenues have nearly tripled, even more impressive considering they traditionally decline from the beginning of the year through early summer.

I am not an economist nor do I have a MBA I am only trying to see the big picture. I just do not understand how neglecting shippers by cutting yard jobs and reducing train speed to lower expenses for the quarter can have anything but a negative impact on return customers. One would think Wallstreet would notice that as operating expenses keep going down so does annual revenue.

I have been with the company for 25 years and I do not want to see the Northern lines just fade into a footnote in history.

JL Schollmeyer
Local Chairman 1637

cc: UTU members

 As we reported May 21, BNSF is making a number of changes to improve our ability to market our service as well as to reduce operating costs. Since those changes will result in the elimination of about 1,000 scheduled jobs, as well as more than 400 exempt jobs, I wanted to give you some more information on the changes. The process of eliminating the exempt positions is virtually complete. We expect that most scheduled positions will be eliminated through attrition; however, a number of scheduled employees in the Mechanical Department will be notified by the end of June that their positions will be eliminated.

In the years since merger, BNSF has done a lot to make our service more attractive to customers. We’ve bought more new locomotives than any other railroad. We’ve moved decision-making closer to the customers through our service region concept, and our service performance today is better than it has ever been.

Many of the steps we’ve taken to improve service also have affected our workload. New, more efficient locomotives require less maintenance and can run farther between service stops. Improved train velocity means we can handle the business with fewer cars, and that reduces equipment maintenance. Our maintenance of way practices — the best in the industry — make our existing track and structures last longer, reducing the need for periodic maintenance.

We expected better service and lower costs to result in continued strong growth which would sustain and even expand our current workforce. Unfortunately, due to factors beyond our control, this hasn’t happened. Union Pacific, our main rail competitor, has recovered from its service problems. Asian economic problems have reduced demand for American exports and forced many Pacific Rim countries to sell what they produce at lower than normal prices, making American commodities less competitive.

So now we face reduced demand for railroad service. The decline has been greatest in some of the very areas —grain, for example — where BNSF’s franchise is strongest. Our revenues in May and so far in June have been flat compared to last year.

We have to live with economic reality. We can’t easily manufacture demand for our services. Our business is not to run trains for their own sake, but to respond to our customers’ transportation requirements. When we move less freight at constant or in many cases reduced rates, we can’t just keep doing business as usual.

We had no alternative but to look toward our largest single items of expense — salaries, wages and fringe benefits —for the savings necessary to meet the expectations of our owners and customers. Those are the kinds of steps we have to take to remain competitive from a cost standpoint. They’re also the kinds of steps we have to take to compete for capital resources if we are to make the investments required for continued growth.

Sometimes we have to make very difficult and unpopular decisions which have an unfavorable impact on some members of the BNSF community, to strengthen the community overall. During this period our thoughts are with the employees impacted by this decision. Their many contributions have helped make BNSF stronger.

I hope we will soon get back on the growth curve which we had come to expect in recent years. We are taking many steps to grow our business, and I hope you will help us in this effort. Thank you for your understanding and your patience during these difficult times for the BNSF community.

 

Very truly yours,