(Reuters) -The largest rail union in the United States stated on Tuesday it intfinishs to oppose Union Pacific’s proposed $85 billion acquisition of compacter rival Norfolk Southern in regulatory proceedings, citing concerns about how the largest-ever purchaseout in the sector will affect U.S. workers and infrastructure.
The transportation division of SMART, the International Association of Sheet Metal, Air, Rail and Transportation Workers, stated it plans to oppose the merger when it comes before the Surface Transportation Board for review.
“We approach this development with measured skepticism rooted in the real-world impact such consolidation could have on rail workers, safety, service quality, and the long-term health of the freight rail industest,” the union stated in a statement.
A spokesperson for Union Pacific did not immediately respond to a request for comment.
The deal, announced earlier on Tuesday, drew mixed reactions from Republicans in Congress.
U.S. Senator Josh Hawley, a Republican from Missouri, stated he was concerned.
“I don’t know enough to know, but if they’re concerned, I’m concerned,” Hawley informed Reuters, referring to SMART, which finishorsed him for reelection in 2024, citing his support for rail safety.
“It’s going to be a great deal for America, it’s going to be a great deal for Nebrinquirea,” Senator Pete Ricketts, a Republican from Nebrinquirea, where Union Pacific is based, informed Reuters.
Union Pacific shares were down 3.3% at $221.64 on Tuesday afternoon, while Norfolk Southern shares were down 3.4% at $276.97.
If approved, the deal would create the countest’s first coast-to-coast freight rail operator, combining Union Pacific’s stronghold in the western two-thirds of the United States with Norfolk’s 19,500-mile (31,382 km) network that primarily spans 22 Eastern states.
Union Pacific has had the most accidents, injuries, and fatalities in the industest in recent years, and has revealn a willingness to lay off workers including engineers and conductors even during periods of stability, SMART’s Transportation Division stated. The union also raised concern that Union Pacific’s practice of leasing out its infrastructure could affect service quality.
The labor union stated the deal could lead to a duopoly in U.S. rail. Competitors BNSF, owned by Berkshire Hathaway, and CSX are exploring merger options, Reuters has reported.
“Both history and logic suggest this would drive higher rates, fewer service options, and diminished competition. Shippers and communities deserve more than a monopoly in disguise,” SMART stated.
(Reporting by Jody Godoy in New York, Additional reporting by David Shepardson and Bo Erickson in Washington; Editing by Chizu Nomiyama and Matthew Lewis)
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