Alaska Railroad to Eliminate 52 Positions
FAIRBANKS — The Alaska Railroad has announced it will eliminate 52 positions statewide as a result of decreased fuel shipments from a North Pole refinery to Ted Stevens International Airport in Anchorage.
Flint Hills Resources decided in April to shut down one of its crude refining units because it could not compete with Lower 48 refineries selling less-expensive jet fuel to the fuel distribution company supplying the Anchorage airport. According to railroad officials, the refinery had shipped 552 million gallons of product filling 36,000 tank cars in its peak year of 2003, but shipments steadily dwindled until reaching a low of 17,000 tank cars by April 2012.
Railroad officials’ predictions that volume shipped would drop even further after the refining unit was shut down have come to fruition.
“I can tell you that our expected loss of revenue from Flint Hills this year is $5 million, and our expected loss of revenue if this continues through 2013 is going to be $7 million a year,” railroad spokesman Tim Sullivan said.
Sullivan acknowledged that a possible loss of $25 million to $30 million in federal railroad subsidies was a motivating factor for the planned job cuts, but said it was not the primary factor.
“The reason for the elimination of these positions is due to Flint Hills. If there is a loss of federal formula funding there will most likely be further reductions in personnel as well. We will be looking at our business model as a whole, and how we operate from there on,” Sullivan said. “We aren’t to the point of panicking about that yet, but we are looking down the road at things that could happen. I think the best way to put it is we’re hoping the best but planning for the worst.”
According to Sullivan, a loss of federal funds would significantly lower the annual rail maintenance and replacement budget. It could also mean a reduction in passenger service because the railroad would be unable to fund a federally mandated positive passenger train control system scheduled to take effect in 2015, Sullivan said.
The system would allow remote control of a passenger train locomotive if an engineer made a mistake, according to Sullivan.
The cuts will partially come from unfilled positions and seasonal employment.
“We won’t probably know until July 1, but a great majority are going to be through attrition and not hiring seasonal workers to do some of our gang work, maintenance work, those sort of things. And then there will be a number of folks whose positions will be eliminated, who will be receiving pink slips,” Sullivan said.
Five unions — the United Transportation Union, the Transportation Communications Union, the International Brotherhood of Teamsters, the American Federation of Government Employees and the American Train Dispatchers Association — represent 514 of the railroad’s 685 employees year-round employees, according to Sullivan.
Attempts to reach union officials for comment Wednesday afternoon were unsuccessful.
Contact Fairbanks Daily News-Miner staff writer Dorothy Chomicz at 907-459-7590.