A proposed mega-merger of two of the largest railroad companies in the US will hurt jobs, raise costs for consumers and increase the risk of more catastrophic train crashes, according to workers and unions.
Union Pacific proposed a $85bn deal to buy Norfolk Southern last month, which would create the first transcontinental railroad network in the US.
As executives at Union Pacific seek approval from federal regulators the Surface Transportation Board, union leaders warn the deal heightens fears around safety – two years after the derailment of a Norfolk Southern train in East Palestine, Ohio, resulted in the release of plumes of toxic chemicals.
“The entirety of the workers” is against the merger, claimed John Samuelsen, the president of the Transport Workers Union. “We’re hoping that the stakeholders in DC that are making determinations are going to listen and understand that when something like East Palestine happens, the chances of that happening under a mammothly merged new entity become greater and greater,” he said.
“Anything that empowers the freight rail carriers makes them more profitable and just increases the levels of power that they can press is dangerous for workers, and actually dangerous for everybody,” Samuelsen added. “They’re already an incredibly difficult employer to deal with. And if they’re twice as big, they’ll be twice as difficult to deal with, and they’re going to move to reduce headcount.”
The two firms expect their merger to create an “annualized synergy opportunity” worth $2.75bn. Samuelsen cited such savings cannot be achieved without reducing the workforce, a longstanding issue in the railroad industry.
“I have had nothing but bad experiences running the TWU in dealing with freight rail. They appear to be unchanged from the infamous rail bosses of the 1880s,” he said, when railroad tycoons, dubbed robber barons during the Gilded Age due to their business practices, amassed immense wealth and power through control of the railroad industry. “They’re extremely powerful.”
The Smart Transportation Division, the largest rail labor organization in the US, has also opposed the merger over Union Pacific’s safety record and labor practices.
Since the East Palestine derailment, a railroad safety bill has stalled in Congress, despite JD Vance supporting it as a US senator, and the Trump administration has already demonstrated a strikingly more lax approach toward approving corporate mergers compared to the Biden administration.
Six class I railroads currently control the majority of the rail network in the US: BNSF Railway, Union Pacific, Norfolk Southern, CSX, Canadian National Railway and CPKC, which merged from two separate railroad companies in 2023. The number of class I railroads in the US has dwindled from 39 in 1980.
Nick Wurst, the general secretary of Railroad Workers United and a railroad freight conductor in Massachusetts, expressed concern with the power a merger of two class I railroad firms would yield to an already powerful industry – and prompt executives to try and “trim the fat” in their workforces.
“It’s going to let them massively expand their negotiating power, not just with the shippers, with the customers, but also it’s going to expand their power in terms of negotiations with workers, and lobbying in Washington,” said Wurst. “I think it’s reasonable to anticipate that there’s going to be sort – of a hunt for redundancies. I don’t think it’s just going to affect union employees; it’s also going to affect management, too.”
The news of a proposed merger has also sparked concerns that other operators, such as BNSF and CSX, would move to merge in response.
“When I heard about this merger, I was horrified for the simple fact that everything that’s happened in East Palestine points to the fact that these rail carriers have way too much power the way it is,” said Jeff Kurtz, a retired railroad worker at BNSF who had served as the legislative and safety director at the Brotherhood of Locomotive Engineers and Trainmen.
The merger would make Union Pacific and Norfolk Southern “a lot more powerful”, he added, pointing to the 1996 merger between the Burlington Northern Railroad and the Santa Fe Railway, which formed BNSF. Benefits in existing union contracts were eliminated if they weren’t included in both, Kurtz recalled, or the lesser benefit was adopted and applied to the merged workforce.
“Things will get worse,” he warned. “Right now, you’ve got these long trains, blocking crossings, cutting towns in half. Another thing that you might get with this merger is them moving terminals around, and moving people out of these small towns. There’s not going to be a lot of recourse for towns to handle this stuff.”
Matt Weaver, a railroad worker, expressed concern that the merger would force workers to travel even further away from home.
“How do you raise a family on that? What’s in the land of opportunity? It’s about being a father, being a mother and being there to raise your kids,” he said. “How can you do that when you’re at this point, it could be 2,000 miles away from home? How are they going to do that? It wears you out to think of the stress on the employee when they expect the same amount of production and they’ve cut since World War One, they’ve cut 95% of rail labor.”
The class I railroad labor force has declined from more than 450,000 in 1980 to about 122,000 workers in 2024, he noted. “None of these mergers have ever been good for the workers,” said Weaver. “That doesn’t serve the people. It doesn’t serve the shippers. It doesn’t serve the consumer because it drives prices up. We’re playing Monopoly here.”
Seven industry groups representing shippers, including the National Industrial Transportation League, the American Chemistry Council, and the Freight Rail Customer Alliance have opposed any further railroad mergers, citing the companies already have too much market power.
Norfolk Southern deferred comment to Union Pacific. A spokesperson for Union Pacific declined to comment but referred to claims on the company’s website that the merger would be “a win” for the US economy.
“It’s a win for our customers; it’s a win for the workforce and it’s a win for shareholders,” the firm has argued. “This combination will transform the U.S. supply chain, unleash the industrial strength of American manufacturing and create new sources of economic growth, safe, resilient communities and workforce opportunity that preserves union jobs.”
They also noted that Transload Group, a rail transloading and logistic service provider that has previously partnered with Norfolk Southern, expressed support for the deal.
