July 14, 2006

To All International Officers, U.S. Rail General Committees and State Legislative Boards

Dear Sirs and Brothers:

The purpose of this letter is to bring you up to date on the current status of National Negotiations.

As you will determine by reviewing the attached material, the NCCC and the railroad industry are attempting to destroy rail labor. Let me repeat that, the NCCC and the railroad industry are attempting to destroy all of rail labor.

Through out this entire round of negotiations, the NCCC has attempted to pit the two operating organizations against each other with lies and despicable tactics. Their plan has not worked. As you can witness from the enclosed material, the NCCC wants to give all the road work to the BLET and all the yard work to the UTU thereby reducing the jobs of both the UTU and BLET downward. Since UTU and BLET would not give consideration to assisting the Carriers in doing each other in, the last and what we were told is the NCCC's final proposal is to freeze all wages through 2009. New hires would never get above 80% of the full rate in effect on June 30, 2005.

It is not just the UTU and BLET that the Carriers are attempting to destroy, but the non-operating unions as well. They are insisting on the full right to contract out non-operating union's work. They have shown complete disregard for the safety of their employees as well as the public. They want to hire unqualified employees in the non-operating sector at the lowest possible wages, making the jobs in the operating crafts so undesirable that dedicated career employees will either quit or retire. In spite of warnings from the FRA and commitments they made in the last round of bargaining, they have refused to address and improve the training for all operating employees.

Under the Carriers' last and final proposal for health care benefits, railroad workers would be required to pay approximately $204.40 per month toward their Health and Welfare. In addition, their annual deductible and coinsurance would increase to the point that our Health and Welfare plan would look nothing like it does today. Their Section 6 Notice demands that the employees contribute 1/3 of the cost of Health and Welfare which would amount to $378.42 per month per employee. When one considers in addition to the $204.40 per month, the increases in annual deductible and coinsurance changes set forth in their last and final proposal, the 1/3 cost is less expensive.

The carriers' entire position throughout this round of bargaining has been orchestrated by the BNSF. In regards to the operating employees, the carriers' position is based on experimental technology that has not been proven to be reliable. It is nothing more than "safety be damned" and they are attempting to use a prototype to eliminate crew members. This is no different than the carriers plan to contract out the non-operating union's work.

An example of the lies that are being told by the carriers is contained in the attached article from the May edition of Trains Magazine wherein the BNSF Assistant President of Net Work Control Systems stated the following; "The system is in no way a step toward employee elimination. That's not our goal that's not even our vision." This is an individual that works with the new technology regularly. His statement and vision is completely opposite of BNSF Labor Relations and CEO Matt Rose. The carriers' by their actions have declared war on rail labor and UTU is not only prepared to battle, we will fight to the finish and win. What is completely puzzling is why the other carriers' are allowing the BNSF to drag them down based on the rudimentary form of technologies that are not proven to be safe and are years away from being implemented on a non-experimental basis.

It is important that all of our membership realize the seriousness of the carriers' actions. Every member's job is at stake. If Labor friendly candidates are not elected in November, assuring that the Democrats regain control of the House and the Senate, we face very serious problems with the current anti-union Administration. There is no doubt that we are headed to a Presidential Emergency Board after the November election.

The actions of the carriers' are despicable, considering the unprecedented profits the railroads are enjoying as a result of their dedicated employees work. Rail Labor and UTU have always been there to assist the carriers obtain legislation that would benefit the railroad industry. We have helped them receive tax reductions and other benefits, and this is the manner in which they thank those that helped them. Use us and then abuse us is apparently their current motto.

Our strategy, as follows, will require all of our members' cooperation.

1. Work to increase UTU PAC contributions so that we can support and elect those individuals that support working people.

2. Insure that our members, their families and friends register to vote and make sure they vote right on Election Day. The railroads may be able to out spend us, but they cannot out vote us. The numbers are on our side if we use them.-3-

3. In most industries the policy is "the customer always comes first."  The railroad industry has taken a different approach. Because of the high cost of fuel, the railroads are attempting to take advantage of the shippers as they attempt to destroy rail labor. UTU will urge the rest of Rail Labor to join with us to make alliances with captive shippers and others who are seeking legislation to limit railroad monopoly power. The UTU and other unions will work with our many friends in congress - Democrats and Republicans - to append shipper-friendly legislation to any congressional back-to-work order imposing carrier-friendly PEB recommendations. We will need all our members support in contacting their elected Representatives when the time is right.

The carriers' intent - in the face of record profitability, new-found monopoly pricing-power, and appalling customer-service failures - is further to their plan to increase bottom lines and executive bonuses by going to one-person crews. For this, the railroads are willing to roll the dice on public safety and national security. They also have proven beyond a shadow of doubt that they care nothing for their dedicated employees that have allowed the railroads to reach record profitability. WE ARE IN THE FIGHT OF OUR LIVES AND I WOULD APPRECIATE YOUR SUPPORT AND HELP IN GETTING THIS MESSAGE TO OUR MEMBERSHIP.

Fraternally yours,

Paul C. Thompson International President

cc: All Rail Chiefs