A historic $85 billion railroad merger between Union Pacific (UP) and Norfolk Southern (NS) is facing fierce resistance from within—the Teamsters Rail Conference union. While the merger application is expected to be submitted this week to the Surface Transportation Board (STB), union opposition casts significant doubt on the deal's prospects.
Why Unions Oppose the Merger: Labor Concerns Behind Railroad Consolidation
Imagine being an experienced train engineer who has worked decades on the rails. Suddenly, you learn your company plans to merge with another railroad that operates with completely different management, safety culture, and employee treatment policies. Would you feel uneasy?
This precisely describes the sentiment among over half of UP and NS's unionized employees, particularly members of the Brotherhood of Locomotive Engineers and Trainmen (BLET) and Brotherhood of Maintenance of Way Employes (BMWED). These unions form the Teamsters Rail Conference, representing 53% of UP and NS's union workforce. Their opposition stems from profound concerns about post-merger operations, competitive landscape, safety standards, and worker protections.
The Merger Vision: Creating a Transcontinental Railroad Empire
Union Pacific and Norfolk Southern envision creating a coast-to-coast "railroad empire" through their merger. This transcontinental network would span 43 states, cover over 50,000 miles of track, and connect approximately 100 ports. The ambitious plan aims to optimize freight efficiency, reduce transportation costs, and enhance U.S. rail competitiveness globally.
"This debt-laden merger won't make railroads more competitive as proponents claim," said BLET National President Mark Wallace. "We believe this transcontinental railroad would make rail transport less attractive by transferring service lines for small towns, factories and farms to short-line railroads while running slow, multi-mile-long trains on main lines. For rail customers, this becomes a 'go to hell or take the highway' choice."
Industry Warnings: Precedents and Potential Risks
The unions' concerns find support from industry groups including the American Chemistry Council (representing 40 chemical companies) and the Rail Customer Coalition. These organizations argue that railroad mergers typically reduce competition while degrading service quality and eliminating jobs.
In letters to the STB, these groups emphasized that historical railroad mergers failed to deliver promised benefits while increasing industry monopolization and harming customers. They fear the UP-NS merger would further reduce rail transport options, raise shipping rates, and decrease service reliability.
Safety Concerns: Cultural Clashes and Operational Risks
Beyond competition and employment issues, safety remains the unions' primary concern. They argue that merging two railroads with different corporate cultures and operating models creates inherent safety risks. Unions specifically referenced NS's 2023 East Palestine, Ohio derailment as a cautionary tale.
The unions note that while NS is implementing Confidential Close Call Reporting Systems (C3RS), UP only verbally supports such programs. Additionally, UP operates extremely long trains—some exceeding three miles—which increases safety risks. They worry UP might impose its safety culture on NS, potentially lowering system-wide safety standards.
Job Security: Empty Promises or Genuine Commitment?
Regarding employment, unions accuse UP of making hollow promises about protecting jobs post-merger. They claim UP's proposal gives the company complete discretion to determine which employees receive protection and when commitments might be altered or revoked.
Unions suspect UP may use the merger to eliminate redundant positions and reduce employee compensation and benefits. They argue UP's job protection guarantees lack substantive enforcement mechanisms to safeguard worker rights.
Industry Perspective: BNSF's View and STB's New Rules
BNSF Railway Executive Vice President Tom Williams noted at last month's RailTrends conference that this merger would reshape the industry if approved. He emphasized this would be the first major railroad merger application under STB's 2001 rules, which require mergers to serve the public interest and enhance competition.
"The 'enhance competition' standard remains untested," Williams said. "If you apply common sense from 2001 when these rules were drafted, this provision wasn't designed to protect non-rail customers. When considering competition with trucking, this merger fails the common-sense test. It's hard to see how eliminating 10,800 service points maintains—let alone enhances—competition."
Williams explained that four transcontinental rail routes currently exist: UP-NS, UP-CSX, BNSF-NS, and BNSF-CSX. The merger would immediately eliminate two, along with all associated connecting lines.
UP's Response: Customer Focus and Efficiency Gains
UP CEO Jim Vena argued at RailTrends that America lacks a railroad capable of offering nationwide opportunities to customers—a situation he called illogical. He questioned why the industry tolerates 15-25% shipment delays caused by inter-railroad transfers rather than optimizing available resources.
Vena emphasized that merged operations would shift freight from trucks to rails, particularly for shipments currently trucked between UP and NS territories or routed through Chicago. He cited copper shipments from Arizona to the East Coast as an example where single-line service would eliminate transfer delays and simplify logistics.
The CEO noted receiving nearly 2,000 letters supporting the merger, stating: "We'll adopt the best from both companies while eliminating transfer points. Fewer transfers mean safer operations—less switching, fewer procedural steps, and reduced equipment wear."
Labor Protections: UP's Pledges vs. Union Doubts
Regarding labor, Vena stated UP guarantees employment for all union workers from both railroads upon merger completion, with lifetime job security. He highlighted growth opportunities, like Mississippi Valley customers who currently truck lumber from the Southeast but could soon ship entirely by rail.
Merger Outlook: Uncertain Challenges and Opportunities
The UP-NS merger could profoundly impact U.S. rail transportation—potentially improving efficiency and customer value while risking reduced competition and worker protections. Whether regulators approve the deal, and whether merged operations deliver promised benefits, remains uncertain.
The Teamsters Rail Conference vows to continue fighting for worker protections while urging regulators to conduct thorough, impartial review. They hope the final decision balances all stakeholders' interests to ensure the railroad industry's healthy development.