Norfolk Southern Corp. and Conrail's management scored wins in their contest to control the federally owned railroad yesterday.
Norfolk Southern exchanged service guarantees for an important endorsement from New York state, and Conrail reached an agreement with its largest labor union, which in turn supported a "public sale" of Conrail stock and Conrail's maintenance as an independent company.
The announcements came as attempts stalled to reach a procedural agreement that would bring Conrail legislation to the Senate floor. In the absence of an agreement, it is unlikely the Senate Commerce Committee bill to sell Conrail to Norfolk Southern for $1.2 billion will get Senate action until September. The House Energy and Commerce Committee also is considering the issue.
New York State has 2,600 miles of Conrail track and has invested more than $200 million in Conrail facilities to maintain freight service. In exchange for the state's support, Norfolk Southern promised that, if it acquires Conrail, it will, among other things:
*Continue operating for at least seven years the "southern tier" main line that serves such cities as Jamestown, Binghamton, Corning and Elmira.
*Reduce the charges that Conrail assesses for switching boxcars from other railroads at Buffalo. The effect would be to open traffic through Buffalo to railroads other than Conrail.
*Initiate incentives to increase rail traffic to New York City and Long Island on the Long Island Rail Road.
*Pay the costs to construct a piggyback terminal the state wants to establish in the Bronx and promote the use of that terminal.
*Donate the west-side line in Manhattan to the state, which will then permit Amtrak to operate Hudson River passenger trains directly into Pennsylvania Station, instead of taking the 20-minute detour to Grand Central Station.
*Work with the state to improve passenger train speeds between Albany and Buffalo to as high as 90 mph. The trip presently takes more than five hours; an improved roadbed and signal system required for 90 mph operation would bring trip time down to about three hours.
*Work to build rail traffic at the Port of New York and in New Jersey. The port authority has raised a number of questions about the Norfolk Southern acquisition.
*Reach agreements with Guilford Transportation Industries that will improve competitive opportunities for the Delaware & Hudson, a Guilford subsidiary.
J. Paul Molloy, an attorney representing Norfolk Southern, called the agreement "an extremely big breakthrough." Timothy Hurlbert, New York transportation department communications director, said the "proposed sale preserves the state's investment in railroad facilities" and "produces significant additional benefits to the state's economy."
The Conrail management's tentative agreement with the United Transportation Union represents the settlement of the last uncompleted labor agreement at Conrail. The UTU represents about 8,600 brakemen, conductors, yardmen and firemen.
Under the terms, Conrail will start paying UTU members industry wage rates, retroactive to July 1, 1984. Conrail's employes had been receiving 12 percent less than industry wages as part of their contribution to restoring the railroad to financial health.
The UTU endorsement of Conrail's independence and a public sale of stock is conditioned on congressional approval and appears to be totally nonbinding. James R. Snyder, UTU's national legislative director, said, "We haven't officially endorsed anyone. We're still seeing where all the players are. We want the best deal for the taxpayers, the best deal for the territory Conrail serves and the best deal for the employes."