[email protected] BETA REPORTING INC. www.betareporting.com Page 1 1 Presidential Emergency Board No. 243 2 between 3 National Railway Labor Conference 4 representing: 5 Union Pacific Railroad Company BNSF Railway Company 6 CSX Transportation, Inc. Norfolk Southern Railway Company 7 The Kansas City Southern Railway Company Alton & Southern Railway Company 8 The Belt Railway Company of Chicago Brownsville and Matamoros Bridge Company 9 Central California Traction Company Columbia & Cowlitz Railway Company 10 Consolidated Rail Corporation Gary Railway Company 11 Indiana Harbor Belt Railroad Company Kansas City Terminal Railway Company 12 Longview Switching Company Los Angeles Junction Railway Company 13 Manufacturers Railway Company New Orleans Public Belt Railroad 14 Norfolk & Portsmouth Belt Line Railroad Company Northeast Illinois Regional Commuter Railroad Corporation 15 Oakland Terminal Railway Portland Terminal Railroad Association 16 Portland Terminal Railroad Company Soo Line Railroad Company (Canadian Pacific) 17 South Carolina Public Railways Terminal Railroad Association of St. Louis 18 Texas City Terminal Railway Company Union Pacific Fruit Express 19 Western Fruit Express Company Wichita Terminal Association 20 Winston-Salem Southbound Railway Company 21 and their employees represented by: 22 Rail Labor Bargaining Coalition consisting of: SERVING WHERE EVER YOU NEED US BETA REPORTING INC. ACCURATE & TIMELY 1-800-522-2382 202-464-2400 202-464-0999 2c851892-89ec-4cbb-9030-5c68c2f41844 [email protected] BETA REPORTING INC. www.betareporting.com Page 2 1 Brotherhood of Railroad Signalman Brotherhood of Locomotive Engineers and Trainmen 2 Brotherhood of Maintenance of Way Employes International Brotherhood of Boilermakers, Blacksmiths, Iron Ship Builders, 3 Forgers and Helpers Sheet Metal Workers' International Association 4 National Conference of 5 Firemen & Oilers 6 and a coalition of Rail Unions, 7 consisting of: 8 Transportation-Communications International Union American Train Dispatchers Association 9 International Association of Machinists and Aerospace Workers International Brotherhood of Electrical Workers 10 Transport Workers Union of 11 America 12 Panel Members: Ira F. Jaffe, Chair 13 Roberta Golick, Member Joshua M. Javits, Member 14 Gil Vernon, Member Arnold M. Zack, Member 15 on behalf of the Railroad 16 Carriers: 17 Donald J. Munro, Esq. M. Carter DeLorme, Esq. 18 Brian Easley, Esq. Jones Day 19 51 Louisiana Ave., NW Washington, D.C. 20001-2113 20 202-879-3939 21 on behalf of the Coalition of 22 Rail Unions: SERVING WHERE EVER YOU NEED US BETA REPORTING INC. ACCURATE & TIMELY 1-800-522-2382 202-464-2400 202-464-0999 2c851892-89ec-4cbb-9030-5c68c2f41844 [email protected] BETA REPORTING INC. www.betareporting.com Page 3 1 Carmen R. Parcelli, Esq. Elizabeth Roma, Esq. 2 Guerrieri, Clayman, Bartos & Parcelli, PC 1625 Massachusetts Ave. NW 3 Suite 700 Washington, D.C. 20036-2343 4 202-624-7400 5 and 6 Michael S. Wolly, Esq. Zwerdling, Paul, Kahn & Wolly, P.C. 7 1025 Connecticut Ave. NW Suite 712 8 Washington, D.C. 20036-5420 202-857-5000 9 on behalf of the Rail Labor Bargaining Coalition: 10 Roland P. Wilder, Jr., Esq. 11 Stephen J. Feinberg, Esq. Baptiste & Wilder, P.C. 12 1150 Connecticut Ave., NW Suite 315 13 Washington, DC 20036 202-223-0723 14 10-19-11 15 CHAIRMAN JAFFE: I think we're ready to go on the 16 record. And we are now up to the carrier's 17 rebuttal case. At your convenience, Mr. Munro. 18 MR. WILDER: My (inaudible), Mr. Chairman. CHAIRMAN 19 JAFFE: Oh. 20 MR. WILDER: Yesterday, the Court asked Ms. Mallett 21 for a figure and I'm prepared to give that figure 22 to you. Cheiron has calculated that the zero SERVING WHERE EVER YOU NEED US BETA REPORTING INC. ACCURATE & TIMELY 1-800-522-2382 202-464-2400 202-464-0999 2c851892-89ec-4cbb-9030-5c68c2f41844 [email protected] BETA REPORTING INC. www.betareporting.com Page 4 1 generic co-pay would save the national plan $4.76 2 per qualified employee per month or $16.4M from 3 January 1, 2012, to December 31, 2014. This was 4 based on some of the year 2009 data, and assumed 5 that a targeted mailing would be included in 6 rolling out the zero dollar generic co-pay. Now, 7 this information is submitted as a courtesy to the 8 board and of course, it is without prejudice to 9 the organization's position that the health plan 10 should be carried forward on a status quo basis, 11 and of course, it would be subject to what I say 12 in my concluding remarks tomorrow. 13 CHAIRMAN JAFFE: Thank you, Mr. Munro, just want to 14 clarify so I understand. The cost figures that you 15 provided us, were they a comparison with the 16 existing plan, a comparison with the carrier's 17 proposal or a comparison with something else? I 18 think that covers the waterfront. 19 MR. WILDER: All right, my understanding subject to 20 correction is that it is based on the, carrying 21 the existing plan forward. 22 CHAIRMAN JAFFE: Fair enough. So we don't have the SERVING WHERE EVER YOU NEED US BETA REPORTING INC. ACCURATE & TIMELY 1-800-522-2382 202-464-2400 202-464-0999 2c851892-89ec-4cbb-9030-5c68c2f41844 [email protected] BETA REPORTING INC. www.betareporting.com Page 5 1 comparison of the.I got it. I'm fine. 2 MR. WILDER: You asked for a comparative data with 3 respect to the employee contribution. That would 4 call for a different model, I guess is the right 5 term, than currently exists, and we're having some 6 difficulty with that blanket. 7 CHAIRMAN JAFFE: Thank you for the response. 8 MR. WILDER: You're welcome. 9 CHAIRMAN JAFFE: I think we're now ready to turn 10 back to Mr. Munro. 11 DONALD MUNRO: Thank you, Mr. Chairman, members of 12 the board. We're ready to proceed with the 13 carrier's rebuttal case. I would like to provide 14 you with just a brief road map of what we hope to 15 accomplish this morning. First we'll have a brief 16 presentation on costing, including our costing of 17 the extra compensation elements of the carrier's 18 proposal, as well as the union's extra 19 compensation proposals. Our purpose in doing so is 20 two-fold. One is to respond to the board's 21 questions regarding costs. The second is, I've 22 made the point at the outset that our case is SERVING WHERE EVER YOU NEED US BETA REPORTING INC. ACCURATE & TIMELY 1-800-522-2382 202-464-2400 202-464-0999 2c851892-89ec-4cbb-9030-5c68c2f41844 [email protected] BETA REPORTING INC. www.betareporting.com Page 6 1 really about numbers, about data and we want to 2 demonstrate that there is a reasonable methodology 3 behind those numbers, so we want to show you to 4 the extent possible, the basis and assumptions and 5 math behind our calculations. Next we will have a 6 brief panel on compensation issues. This is 7 intended as largely a response to the testimony of 8 Mr. Roth. First Dr. Evans will return to discuss 9 why he believes that Mr. Roth is not accurate with 10 respect to his dismissal of wage premiums, or his 11 comments about the CPI and real wage growth, both 12 in the past and in the future. Second, Dr. Topel 13 will show that the impact of the existing premiums 14 is not theory, as Mr. Roth says, but has 15 measurable real-world consequences. Third, Mr. 16 Gray from AAR, who is the author of our Exhibit 8 17 will respond briefly. I promise briefly, to Mr. 18 Roth's comments on the degree in relevance of 19 current industry prosperity. We will then move to 20 the health and welfare rebuttal, where again, we 21 will address issues of costing, including 22 comparisons of capped versus uncapped options, as SERVING WHERE EVER YOU NEED US BETA REPORTING INC. ACCURATE & TIMELY 1-800-522-2382 202-464-2400 202-464-0999 2c851892-89ec-4cbb-9030-5c68c2f41844 [email protected] BETA REPORTING INC. www.betareporting.com Page 7 1 well as comparisons under the carriers proposed 2 change versus unchanged, projected forward. We 3 will be providing some Excel data back up to that 4 as soon as we can generate it. Our healthcare 5 panel will also respond to the Cheiron analysis as 6 well as the testimony by Mr. Parker and Mr. 7 Hildenbrand. I promised that we would address work 8 rules on rebuttal. We will now plan to do so in 9 substantially abbreviated form, including a 10 presentation on expenses away from home by Scott 11 Weather from Norfolk Southern and Greg Koontz from 12 BNSF, followed by a presentation on vacations by 13 John Hennecke from the NRLC, and Bill Roe from 14 Union Pacific, as well as a short comment by Mr. 15 Crable from CSX on Mr. Pierce's comments regarding 16 the CSX agreement. Finally, again, a very brief 17 comment on cab conditions and information requests 18 that will be presented by Rob Karov from BNSF. 19 Finally, we will bring Mr. Gradia back to respond 20 to a sampling of some of the other assertions that 21 were made in the union's case in chief. It's not 22 an attempt to be comprehensive but rather to give SERVING WHERE EVER YOU NEED US BETA REPORTING INC. ACCURATE & TIMELY 1-800-522-2382 202-464-2400 202-464-0999 2c851892-89ec-4cbb-9030-5c68c2f41844 [email protected] BETA REPORTING INC. www.betareporting.com Page 8 1 the board and opportunity to see the range of 2 issue son which we disagree.