Conrail's labor and management representatives tentively agreed to $299 million in wage and benefit concessions yesterday in an effort to prevent the break and sale of the federally subsidized freight railroad -- and the loss of an estimated 50,000 of the railroad's 80,000 jobs.
Conrail's 14 unions, whose members received $2 billion last year in wages and benefits, are being asked to "defer" $200 million in future wage increases under the terms of the agreement. The other $29 million is to come from nonunion employes, including managers and supervisors, who were paid a total of $289 million last year.
The Reagan administration had proposed dismantling and selling the railroad, which had been losing money and draining the U.S. Treasury since its creation from seven bankrupt, privately run railroads in 1976. Administration officials had estimated that Conrail could cost taxpayers another $4 billion by 1985.
Yesterday's agreement "takes away the justification for the approach that the administration had," said Rep. James J. Florio (D-N.J.), chairman of the House subcommittee on commerce, transportation and tourism. Florio primarily was responsible for bringing about the agreement, which was reached yesterday in his Capitol Hill office.
"I conveyed to them [labor and management leaders] that, unless we had something tangible to show the Congress that there was a willingness to sacrifice, Congress would not act on faith" and give the railroad another lease on its troubled life, said Florio, whose committee is considering a proposal to provide Conrail with about $600 million in additional federal subsidies over the next two to three years.
"The government funding simply would not come unless Conrail can achieve savings," Florio said.
The congressman added that the administration had reached the tentative decision to sell Conrail "on the belief that this kind of concession agreement could not take place."
Transportation Secretary Drew Lewis had rejected giving Conrail -- Consolidated Rail Corp. -- another chance to become self-sufficient, saying: "No matter how starkley economized, any independent Conrail organization would continue to be a marginal operation, isolated in the Northeast, owned by the government and consuming millions of federal dollars." There was no immediate reaction to the concession agreement yesterday from Lewis or his subordinates.
However, Fred J. Knoll, president of the Brotherhood of Railway and Airline Clerks, and L. Stanley Crane, chairman and cheif executive officer of Conrail, both expressed confidence yesterday that the agreement would be approved by the unions' rank and file, or other authorizing bodies, and would be accepted by Congress and the administration.
Representatives of 12 of the 14 unions voted "yes" on the tentative pact. Leaders of the Signalmens' Union and the Brotherhood of Locomotive Engineers deferred action until they could discuss the matter with their executive bodies.