Burlington Derailed — The Continuing Story

29 June

More West Burlington Workers Receive Letters

From what we hear more electricians and machinists have received their recall letters to work in Galesburg. More than 35 letters have been sent out. Some of these workers have already accepted jobs from other railroads so they won't be returning to work for the BNSF. That means more people should receive their letters sooner.

We predict other rumors are right. Everyone will eventually be recalled. If is true that there are a large number of diesels are side-tracked for maintenance, it sure sounds like Galesburg is going to recover some of their lost jobs. These skilled jobs will bring other jobs to the community.

A 50 minute commute isn't so bad to protect their railroad retirement benefits.

Burlington lost an opportunity. Forever.

Spike

[Editor's note: (From a worker in Topeka) (Unconfirmed) There is good reason to believe that all who were displaced by BNSF pulling out of Burlington have been offered some sort of employment with the railroad or General Electric traction motor repair. This worker (who we will not identify) also said that there is a likelyhood that GE will reuse the West Burlington shops in some capacity. We can only hope for the best for the economy of the Burlington area.]
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28 June

Who Paid for the Traction Motor Report & How Much?


I'm curious.

What's this traction motor report about ?
How does it figure into all this commotion?
Who paid for it? How much?
Did the newspaper report anything about it?
Somebody said it was wrong. Is it?
Why was it paid for if it was wrong?

Katy
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18 June

I Guess Someone Was Right

Well, it looks like the City derailed the train.

The railroad was quoted in The Hawkeye that it was a business decision. It was. Don't do business in Burlington.

Although the BNSF spokesman was quoted stating that it was "highly unlikely" that these jobs could have been located in Burlington, there should have been an effort made to try to get something negotiated with the railroad before they left town. Now the railroad will leave town and Burlington will get nothing except a big legal bill and a tarnished reputation of greed that will last years.

And what kind of message does this lawsuit send to every prospective business that looks at Burlington for expansion or a new location for their business? If you have to make a business decision to consolidate your operations to compete, we'll sue ya. But we'll tell everyone it is about jobs.

Maybe the economic development efforts should have been left to the "amateurs" after all. Looks like The Hawkeye's "experts" didn't have a clue what was going on.
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16 June

Railroad Jobs Headed to Galesburg?

I heard the BNSF is recalling laid off workers to work in the diesel shop in Galesburg for General Electric. 28 electricians have received recall letters. 7 or 8 have agreed to return to work. The same person told me all 250+ workers will be eventually recalled.

Do you guys know if this is true?

CS

[ Editor's notes:
AN article in the business section of The [Burlington] Hawk Eye, dated May 9 of 2004, stated, "The railroad also has announced plans to hire 1,700 workers this year, many of those hires focused at crew change sites in Fort Madison, Galesburg and Chicago." The article continued that BNSF plans to add 1500 workers per year over the next five years.
We believe the writing was on the wall and that the lawsuit filed by the City of Burlington pushed those jobs away from our city. With all luck, those displaced by the layoffs in the Burlington Shops will find work close by.]
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14 June

Wasn’t the Burlington Mayor committed to developing a reuse of the West Burlington Shops in January?

Yes. Apparently the Mayor said a reuse was "one of the main goals." Nothing ever materialized from those intentions.

Quoting from a newspaper article appearing in The Hawkeye on January 10, 2004:

(Burlington Mayor Mike) “Edwards said one of the main goals was to assure the railroad's support to help find a reuse "if they shutter it completely."

"That's kind of where it's headed, it looks like," he said.

Initial attempts to find a replacement tenant on the sprawling property will focus on the railroad industry.

"It's naturally the first place anyone would look, but I don't know how much potential that will hold," Edwards said. "After that, I don't know where we'll go.

"Everyone in the room today was very committed to trying to figure out something that would create jobs with decent pay."
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How did the city of Burlington fail to 'maintain a relationship with the railroad?'

Burlington City Manager Bruce Slagle and Mayor Mike Edwards refused to meet with BNSF officials prior to the City filing their lawsuit. Even though reported in The Hawkeye, no reason has ever been given by Slagle or Edwards for their reluctance to meet with the railroad.

According to the transcript of comments made by Randy Danniel from Railroad Data Services at a June 1, 2004 meeting of the Des Moines County Supervisors, “the BNSF contacted (Des Moines County Supervisor Ed) Blow, (Railroad Data Services Randy) Danniel and (Des Moines County Attorney) Pat Jackson on February 27 asking the County to assist in facilitating a meeting with the city of Burlington on March 4, 2004.” The BNSF official was asked whether he had the authority to negotiate with Burlington. He said, “he would have the guy with authority with him at the meeting. “

“Ed (Blow) made numerous attempts to contact Bruce Slagle about the meeting. Ed drafted a letter on March 2, 2004 and sent it by fax and had the letter hand carried to City Hall requesting the City attend a meeting on March 4 with the railroad.

[ FAX SENT TO CITY MANAGER SLAGLE FROM SUPERVISOR ED BLOW ]
Letter from Supervisor Blow to Burlington City Manager Slagle

Burlington refused to meet with the BNSF. On March 4, 2004 The City filed their lawsuit. Discussions continued with the BNSF until March 3, 2004.”
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01 June

Statement Made to Des Moines County Supervisors at Meeting 6/1/04

Original notes used for statement made to Des Moines County Supervisors at Meeting 6/1/04.

I’m Randy Danniel and I live in Burlington.

1. This is the same summary of the efforts I put forth to retain and/or create new jobs as a result of the closing of the West Burlington Shops.

2. Some material has been added to make it more clear to people not directly involved in this effort.

3. On August 11, 2003 Ed Blow, Des Moines County Supervisor and long time personal friend stopped at my home seeking my help regarding the West Burlington Shops.
a. Ed said he had been contacted by shop workers that had their jobs abolished and were not subject to recall.
b. Ed had been given this assignment by Tim Hoschek because Hoschek was otherwise busy or not interested in since this project had been around for quite awhile.
c. Ed asked if I would attend a meeting on August 15 to listen to the railroad workers’ plans to open a private traction motor shop in the Burlington area.
d. I was reluctant to get involved. I was enjoying a peaceful life writing railroad books. Since the project had already had many things go wrong, I knew that whatever the displaced workers envisioned, it might be a lot harder to put into motion than they thought it would be.

4. On August 15, 2003 Ed Blow and I attended a meeting at Southeast Regional Planning Commission in Burlington. I met Brian Tapp, Executive Director of Regional Planning. Mike Graham and Frank Cooper, two displaced BNSF workers, also attended the meeting.

5. At this meeting I gave everyone a copy of the report I had researched. Frank Cooper was not happy to learn that I felt his project had some major flaws. And I openly expressed those flaws. I owed it to Ed to give him an honest open assessment of their project and my advice as to the direction to go even though it may conflict with Cooper’s ideas.
a. Cooper and Graham had no written business plan.
b. Cooper and Graham lacked any experience managing or operating a heavy manufacturing facility.
c. Cooper wanted economic development funding in the form of forgivable loans and grant money even though their start-up company had no track record. This type of financing would be extremely hard to obtain if it could be obtained at all.
d. Cooper and Graham did not understand that they would need to obtain ISO 9000 quality assurance certification to be able to supply the BNSF with traction motors.
e. Cooper and Graham did not understand that they would need to obtain their product liability insurance through a world wide insurance pool such as Lloyd’s of London.
f. Cooper was upset when I told him he might have to hire an executive team to manage this type of operation for it to appear viable to the BNSF.
g. Brian Tapp’s comments subsequent to this meeting “Randy was brutally honest and frank with those guys. They don’t have a clue.”

6. I wrote a Phase I draft report that was submitted to Brian Tapp for critique and comment on October 16, 2003 six weeks before the final report was due December 1, 2003.

7. In 6 weeks I expected Tapp to respond to my numerous phone calls, and comments made by Ed Blow to Tapp reiterating my request for comment and to determine what else he might want in the report. In the 6-week period I attended meetings with Tapp, Blow and Slagle and I did not receive any comment whatsoever regarding my draft report.

8. Phase I of the project ended on December 1, 2003. Tapp never did respond to my request for review or critique of the report. And he never gave any reason for not returning my calls.

9. Paul Nowicki from the BNSF contacted Ed Blow, Pat Jackson and me by telephone on February 27 asking the County to assist in facilitating a meeting with the City of Burlington on March 4, 2004.

10. Ed made numerous attempts to contact Bruce Slagle about the meeting. Ed drafted a letter on March 2, 2004 and sent it by fax and had the letter hand carried to City Hall requesting the City attend a meeting on March 4 with the railroad.

11. Burlington refused to meet with the BNSF. On March 4, 2004 The City filed their lawsuit.

12. Discussions continued with the BNSF after March 3, 2004 even though the City had filed a lawsuit.

13. Summary of my efforts to develop a reuse plan for the West Burlington Shops as reported to the Des Moines County Supervisors.
a. Over 265 hours of time from December until mid-March.
b. Over 70 outbound telephone calls to Paul Nowicki, VP Government and Public Policy for The Burlington Northern and Santa Fe Railway. Paul was designated by the railroad to be my contact individual and all communications were handled through him after my initial calls to Craig Hill.
c. Over 30 outbound emails to parties directly involved in this.
d. I executed a Confidentiality Agreement on behalf of Regional Planning for one of three consultants that were to be hired for this project.
e. Summary of Reuse Possibilities presented to Nowicki and/or Craig Hill from January 9, 2004 until March 3, 2004.
f. This is the same report I gave each Supervisor. We met individually because of my time constraints. We did not meet to subvert the open meeting law.

14. Some Reuses I Proposed to the BNSF on January 9, 2004.
a. The possibility for job retention was axed. Craig Hill said on January 9, "we are going to close West B. We don’t want to give our employees any false hope.” They reiterated that to everyone at the meeting several times.
b. I suggested that the railroad sell the property and equipment to Regional Planning’s 501c3 Development Company for $1.00. In turn, sell the property to EMD, Electro Motive Division of General Motors or General Electric for use as a locomotive repair facility for exclusive service to the Burlington Northern Santa Fe.
c. I also suggested that the railroad sell the property and equipment to Regional Planning for $1.00. In turn, sell the property to EMD for use as a locomotive repair facility for EMD’s locomotive lease fleet serving many railroads.
d. Continued use as a railroad maintenance facility for something other than locomotives. Danniel suggested the use for railcar repair and as a last resort, a tank car repair facility. "Can’t think of a need, but I will inquire to see what might be needed.”
e. I also suggested that the railroad sell the property and equipment to Regional Planning for $1.00. In turn, sell the property to a BNSF vendor for use as a heavy repair facility for exclusive service to BNSF.
f. I asked if the BNSF would have any interest in building a refueling tank farm facility in the area. Two diesel fuel pipelines crossed Iowa and the BNSF mainline, one just west of Danville. Hill believed that would not be needed. (Ad lib comments – reconsideration of this need if Illinois passes 21.5% diesel fuel tax.)
g. I asked what was foreseen as the most pressing need by the railroad to be. Hill stated training new workers. I asked if the local community college might participate in some form of satellite agreement with Johnson Community College in Overland Park, Kansas to train railroad workers.
h. I asked about developing a transload facility located in the area. This facility would unload railroad cars of material and reload it to barges for travel down river. New business section from the railroad would meet with whomever whenever we identified the players.

15. After the January 9 meeting a proposal was prepared to present to the BNSF. The ultimate reuse proposal was multi-faceted. Due to the City’s decision to sue the railroad, we never had the opportunity to present our proposal.
i. BNSF would obtain a fair market value (FMV) appraisal for the Shops property.
j. BNSF would sell the Shops to the 501c3 development company controlled by Regional Planning for $1.00.
k. BNSF gets FMV write off instead of depreciated book value to offset their closing costs. BNSF looks better to Wall Street. BNSF would retain all current EPA responsibilities. The new occupant would have to be able to conduct any operations with total responsibility for new pollution.
l. A package of “additional costs” might include education, recreation, and economic development, a library contribution in the form of a Charles E. Perkins Children’s library motif.
m. Regional Planning would sell the property to GE with additional costs added to the capital lease amount so that those costs could be spread over the 10-15 year lease term. It would be minimal financial impact for the BNSF but huge impact for the region.

Final Comments

1. Des Moines County has 2 hard working public officials that have tried to do something about the job loss.
2. What we did was about and has always been about, jobs.
3. Gave same report now as what was given to the Supervisors. Tim, your comment was, “What in the world was the city thinking?”
4. It is unfortunate for the railroad workers and the community that I wasn’t able to use my ideas.
5. I will continue to meet or work with any entity that desires to locate or maintain a local facility that will create or retain jobs. It’s my community, too.
6. I only advised what were some of the options that could be explored.
7. I thought it was the right thing to do then and think it’s the right thing now.
8. The Supervisors made the right decision to pay their portion of the bill and the citizens of Des Moines County got their monies worth of work from me.
9. It’s unfortunate that we never got to tell our side of the story and that is has only been only slanted to 1 side.
10. Traction study flawed, 26 pages @$20k ($10k city, 10k IDED) $769.23 per page didn’t balk at paying that. I critiqued it for free.
11. I was hired as a consultant - helping them to do it help with knowledge + contacts.
12. I wasn’t writing a book on how to do it; it was about doing it.
13. I was paid as a consultant; to open doors that otherwise were not being opened by anyone.
14. I had the interest and a long-standing relationship with the railroad and I was willing to use that relationship for the betterment of the community. Even after these personal attacks I will still have that long-term relationship with the railroad. But the loss to the community will be felt for years to come.
15. I stressed that David, Ed and Tim that it was vital to not burn any bridges with the railroad because some day the Supervisors may have to appear hat in hand to resolve a problem with the railroad.
16. I met individually with each Supervisor. It was my decision to meet separately due to my schedule. Not to subvert the meeting law.

17. My last comments in closing.

18. After Ed won the election I asked him, “what about politics and what about re-election. Ed said, “I don’t care if I’m re-elected, I’m here to do a job and that job is what’s best for all the people of Des Moines County.” Ed would never sell his integrity for anything, let alone a vote. And he would never sell his integrity to protect me.

19. In the short time I have spent with David Miller I see the same traits, as Ed. David would never sell his integrity for anything, let alone a vote. And he would never sell his integrity to protect me.

20. Tim, over the last 9 months I have watched you flip flop on this project at least 6 times. For you to attack me at the time of your reelection is unconscionable. When I met with you and gave you my report, you agreed I should be paid. You wondered aloud, “what’s wrong with the City of Burlington?”

21. If you want to run with the dogs of economic development you have to get off the porch. I have watched you sit on the porch and wring your hands like an old man trying to decide what to do next. I have watched you blame the other Supervisors for not doing your job of reviewing claims, for you. I think it is time for you to step aside and let Bob Beck or Max Lawson see what they can do for Des Moines County. Last week I was upset with you for thinking that you can just call out my name and think that you can evoke a response from me that would make you look good to voters. Last week you evoked a response in me and I called you a vote whore. My Mother wouldn’t be pleased with my choice of language; but my Dad would be glad I called it the way I see it. I haven’t changed my impression.

22. I am not taking questions and these will be the last public comments I have.
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