The labor unions that represent the Consolidated Rail Corp.'s 40,000 employes stepped up their campaign to purchase the federally owned system yesterday when they retained Chase Manhattan Bank to put together a financing proposal.
The announcement by the Railway Labor Executives Association (RLEA) came on the same day that Conrail reported a record first quarter and a tentative agreement on a new contract with the Brotherhood of Locomotive Engineers. That ends the threat of a strike April 30.
Fred Hardin, chairman of the RLEA and president of the United Transportation Union, said that "today we've made a lot of progress toward employe ownership; we're here in New York to sign an agreement with Chase Manhattan; Chase has been satisfied that an employe purchase is a viable arrangement and is committing itself to putting together the funds."
Bob Lichten, a senior vice president for Chase, called the agreement "another milestone on the road" to employe ownership and said that, if Chase did not think such a deal was possible, "we wouldn't be entering into this agreement."
Federal officials, who are committed to getting the government out of the railroad business, noted that Chase had not offered to finance the acquisition. "We have said and told the RLEA that we must be able to see in whatever offer they make sufficient financial backing that we will not have to take the railroad back," an official said.
The federal government has poured $3.3 billion into Conrail since it put it together from the remnants of the Penn Central and other railroads to preserve freight service in the Northeast.
The RLEA has made the only publicly known offer to purchase Conrail, but federal officials said other interests have asked to be consulted when the Transportation Department's Federal Railroad Administration is ready to sell.
The United States Railway Association, another government agency, is preparing a report on Conrail's financial prospects that is due June 1. That report is expected to play a significant role in whether private investors are the least bit interested in acquiring Conrail.
A USRA official noted yesterday that, regardless of the outcome of the RLEA offer, "it makes labor a player at the table."
Conrail's worth is an eye-of-the-beholder question. Its 1982 annual report listed assets of $5.5 billion, with $1 billion in outstanding equipment-related loans in addition to the $3.3 billion in federal loans. That money is presumed by federal officials to be gone forever.
The first quarter report yesterday said that Conrail earned $12.6 million on revenue of $729.7 million, compared with a loss of $23.5 million on revenue of $944.2 million for the first quarter a year ago.