Short Strike Leaves a Long Train of Disruption : Railroads: Freight-haulers sluggishly resumed deliveries, far outpaced by the quick rise in rail stocks.
The rail strike that idled 235,000 freight line workers lasted only 19 hours, but its disruptive effects will be felt by American industry for at least several more days.
Freight stranded on railroad sidings nationwide slowly began moving again early Thursday, as pickets left their lines and returned to work. Investors, euphoric about the strike’s short duration, pushed rail stocks up on the New York Stock Exchange, even though the Dow Jones industrial average closed down 5.20 points.
“The railroads were out (early Thursday) inspecting track and signals, making sure everything was all right,” said Anne Bennof, spokeswoman for the Assn. of American Railroads. “By early morning they were starting to call the crews in to man the trains. . . . But it’ll take several days--maybe longer than that--before everything gets completely caught up.”
The strike began at 7 a.m. Wednesday and ended at 1:40 a.m. Thursday, when President Bush was awakened to sign an emergency measure from Congress putting the railroads back on track. Despite the quick halt, backlogs in the rail system will keep industry from running smoothly until at least the beginning of next week.
At Ford Motor Co., for example, a shortage of rail-delivered parts caused the firm to slash shifts Wednesday and early Thursday at its Chicago assembly plant, which makes Taurus and Sable cars. The plant was slated to return to a full work shift by late Thursday.
Company spokesman Dave Caplan said all other assembly plants run by the No. 2 car maker were operating normally. But Ford’s Atlanta plant, which also manufactures Taurus and Sable models, will be shut down on Friday because of parts shortages resulting from the strike. About 2,800 workers will be affected.
General Motors Corp. had to halt production Thursday afternoon at its Van Nuys plant because of a shortage of V6 engines for the Chevrolet Camaros and Pontiac Firebirds made there, United Press International reported.
“The train carrying those engines is in Texas,” GM spokeswoman Karen Longridge said, adding they were on their way from an engine plant in Mexico. Production at Van Nuys was expected to resume today, she said.
Twin Modal Inc., a Minneapolis rail shipping company, has lost a quarter of a million dollars in the past week as wary customers turned to trucking companies to deliver their goods. John Jacobson, manager of intermodal operations, expects at least one more difficult week because of the strike.
“The one-day strike was a weeklong strike for us and our customers,” Jacobson said. “Business dropped more than 50%.”
Incoming ship traffic was light on Wednesday at the Port of Los Angeles, said Chuck Ellis, port spokesman. As a result, the port’s unloaded cargo--with no rail cars to whisk it away--did not build up enough to require storage.
“People are scrambling to make up lost time, and we think we’ll be back on schedule in the next few days,” Ellis said Thursday.
The Quaker Oats Co. distribution center in Fullerton supplies grocery stores from Bakersfield to the Mexican border. On Wednesday, seven rail cars filled with Cap’n Crunch cereal, granola bars, pancake syrup and Quaker Oatmeal were stranded a mile from the center, untouchable because of the the strike and union rules.
Just seven hours after Bush signed his order ending the strike, the waylaid dry goods were back on track, zipping down the rails on their way to the warehouse, said Joan Billingsley, the center’s transportation manager.
But the strike did have a big effect on rail stocks, which rallied on the New York Stock Exchange Thursday on news of the strike’s demise. Norfolk Southern was up $1.375, to $46.625; CSX was up $1 to close at $40.875; Conrail rose $3.125 to close at $51.375; Union Pacific was up $1.75, to $83.125.
“Part of the thing is obviously everyone’s tickled to death that the strike is over,” said W. Bruce Remington, an analyst with Kirkpatrick, Pettis, Smith, Polian Inc., an Omaha, Neb., broker-dealer. “The strike was short so it didn’t start impacting earnings.”
