The American Chemistry Council (ACC) on Oct. 16 sent a letter to POTUS 47 signed by 40 chief executives of member companies, all of which are railroad customers, expressing “strong concerns regarding the proposed merger between the Union Pacific (UP) and Norfolk Southern (NS) railroads.”
ACC’s letter (download below) is one of those communications my predecessor, Luther S. Miller, would refer to as “making the obvious less obscure.” Two excerpts:
“Today, the U.S. freight rail system is less competitive than ever. Just four railroads control more than 90% of U.S. rail traffic and most U.S. chemical production facilities are served by only one major railroad. Past mergers have led to severe service disruptions, rising rates, weakened supply chains and a less competitive U.S. industrial base. We have no doubt that combining UP and NS into the nation’s largest railroad will make these problems worse, leaving domestic manufacturers, farmers, and energy producers with fewer choices, higher costs, and less reliable service. And, if approved, this deal will likely spur additional mergers culminating in a nationwide railroad duopoly.”
“The STB has the exclusive authority to review rail mergers and will determine whether the UP/NS proposal is “consistent with the public interest.” The Board must be allowed to do its job and hold firm to a broad view of its mandate and set a high bar for merger approvals. The STB should reject any deal that fails to clearly demonstrate how it would effectively improve service, increase safety, and enhance rail-to-rail competition.”
Most of ACC’s letter does little more than rehash things many of us already know. Yes, Virginia, “the Pope is a Catholic,” as Luther Miller liked to point out.
Whether the merger, if approved—it’s not a “done deal,” as some will lead you to believe—will result in all the negative impacts ACC claims, remains to be seen.
“If there is a communication more dreadful than one written by artificial intelligence, it is one written by committee and distilled down to contain no more backbone than possessed by a banana,” comments Railway Age Capitol Hill Contributing Editor Frank N. Wilner. “If ACC’s intent was to tell POTUS 47 to keep his ‘Royal Hands’ off independent regulatory agency decision-making, the final product is an overly lengthy message in obscurity. Most sorrowfully, ACC—as did Union Pacific CEO Jim Vena, who went hat-in-hand to the POTUS seeking merger support—reveals a regrettable disregard for the statutory decisional independence of the STB and its Senate-confirmed members pledged to follow the letter of the law. Nothing POTUS 47 does seemingly comes without a payoff. Vena obviously left with a thumbs-up on his merger with NS—and subsequently made a substantial contribution to the $300 million White House ballroom.* Indeed, in the photo of Vena and the POTUS is a telling prop—an architectural model of the project. As never before and courtesy of Vena’s perceived pay-for-play, the STB’s reputation is on the line.”
*The White House released a list of donors for the ballroom:
- Altria Group, Inc.
- Amazon
- Apple
- Booz Allen Hamilton
- Caterpillar, Inc.
- Coinbase
- Comcast Corporation
- J. Pepe and Emilia Fanjul
- Hard Rock International
- HP Inc.
- Lockheed Martin
- Meta Platforms
- Micron Technology
- Microsoft
- NextEra Energy, Inc.
- Palantir Technologies Inc.
- Ripple
- Reynolds American
- T-Mobile
- Tether America
- Union Pacific Railroad
- Adelson Family Foundation
- Stefan E. Brodie
- Betty Wold Johnson Foundation
- Charles and Marissa Cascarilla
- Edward and Shari Glazer
- Harold Hamm
- Benjamin Leon Jr.
- The Lutnick Family
- The Laura & Isaac Perlmutter Foundation
- Stephen A. Schwarzman
- Konstantin Sokolov
- Kelly Loeffler and Jeff Sprecher
- Paolo Tiramani
- Cameron Winklevoss
- Tyler Winklevoss
