Letter from Jim Young

Fellow Employees:

The 2007 legislative season is in full swing, with the U.S. Congress in session and most state legislatures at work as well.

Legislation is being introduced at the state and federal levels of government. Some of it is important - funding vital human services - and some of it is so detrimental to our nation's infrastructure and economy that one wonders what they are thinking.

Just such a piece of proposed legislation was recently introduced in the U.S. House of Representatives. Misnamed the "Railroad Competition and Service Improvement Act of 2007," it is actually a collection of very bad ideas pushed by the anti-railroad special interests and their lobbyists.

This complicated legislation would have catastrophic consequences for our industry. It gives shippers near-total authority over how railroads could operate - such as which routes shipments would take and where they would be interchanged. Imagine the loss of efficiency and the gridlock that would come from every shipper having the right to choose the routing for every rail car.

A federal bureaucracy would determine who could use which tracks, regardless of who owns them, and would also get to set the rates that the owner of the tracks could charge even though they will be far below the market value of the service. It would also decide which shipments get priority. This legislation assumes that government can decide whether agricultural products should move ahead of energy, or that lumber is more important than steel, or that ethanol is more important than consumer goods.

On the surface this seems illogical, and it would be – except that some very powerful special interests, each of whom believes that they will get special service or lower rates from this bill, have made this bad idea their top priority.

One troubling development is the attempt by these anti-rail special interests to enlist the support of a union that represents many of our employees in passing this legislation. For many years the railroads and their unions have stood together to defeat those who want to harm our company and our industry. Now more than ever, we need to continue to protect our livelihoods and our future from these dangerous ideas.

Here is what would really happen: First, as federal bureaucrats cut rail revenues, new investment in equipment and capacity would stop, just as it did when the government made that same mistake in the past.

Next, as bureaucrats order irrational service at bargain prices, the national rail network would become gridlocked. As service deteriorates, more and more freight would move to trucks and further clog the highways. As volume and revenue drops, the railroads would have to begin cutting expenses and furloughing employees.

Over time, the condition of the tracks and rail bed would deteriorate, as maintenance would fall further behind from a lack of money to spend to protect the railroad. This would increase the number of slow orders, further slowing our ability to operate efficiently.

Forced into a spiral of destruction, the future for all railroads would be very bleak.

Could this happen? I certainly hope not, and we will work hard to educate Congressional members who will ultimately vote on this disastrous legislation about the risk to our company and our country. But it has happened twice in the 20th century, so don't count on common sense to prevail.

The current structure of our industry is working. As demand for service increases, the railroads are able to raise prices, increase their financial returns and invest in more capacity, equipment and people. In our case, our capital spending is at record levels, our employment is up, our safety record is improving, and our opportunities have never been brighter. It would be a shame to see all this progress vanish.

I hope you will support our company and our industry in stopping this dangerous attack on our future. Please visit the www.gorail.org Web site, where you can send an electronic letter to your senator or congressman asking them not to support 5.953 or HR 2125. It will take less than five minutes and it may be the most important thing you can do to stop this dangerous legislation.

Thank you,

Chairman