The Alaska Railroad is laying off 29 employees and cutting 25 vacant positions because of decreases in freight revenue and federal funding, the state railroad corporation announced Thursday.
A total of 54 positions have been eliminated as "part of a major restructuring effort," railroad spokesman Tim Sullivan said. The cuts will save $4.5 million and represent an 8 percent reduction in the railroad's work force, Sullivan said. Of the jobs lost, 20 are management positions -- all of them filled at the time the layoffs were announced -- and 34 are union jobs from across the railroad, including vacant positions, he said.
From 2011 to 2013, the railroad will receive about $8.8 million less from the federal government and $11.6 million less from coal and petroleum shippers, according to figures released by the corporation Thursday.
Changes to federal grants in recent years also require the railroad corporation to "spend" more in the form of matching funds to get fewer dollars, Sullivan said. In 2011, the corporation had to match $3.55 million to get $35.79 million in federal grants, he said. In 2013, the corporation is required to match $6.75 million to get $27 million, Sullivan said.
The decrease in federal funding to Alaska does not mean a savings to the federal government, he said, because the money simply goes to other states.
"Reductions to us don't cut the (federal) budget at all; they just reduce our slice of the pie and the rest of it goes off to other railroads somewhere else," he said.
A government mandate that railroads start using what's called "Positive Train Control technology" -- designed to prevent human-error accidents -- is also costing the railroad $15 million a year, Sullivan said.
At the federal level, funding the Alaska Railroad has become "unpopular" in recent years, railroad CEO Chris Aadnesen said. In the past, Alaska's senators and congressman were able to work out better compromises that brought more federal dollars to the state, he said. Lately, though, the sentiment in Washington, D.C., is that Alaska has plenty of money to pay for the railroad, Aadnesen said.
"The Alaska delegation has been good but they can only do so much," he said. "I would never say that they're not effective."
The cuts are not expected to affect passengers hoping to ride the rails, Aadnesen said.
"The trains will still run on time, the cars will still be clean, the food on the passenger trains will be good, the freight trains will run on time, they'll blow the whistles at the crossings," Aadnesen said. "All of that will be the same and we promised the stakeholders, which are the citizens of this state, that's the way this will be."
On the inside, though, things will look different, Aadnesen said. Changes include fewer managers and fewer departments reporting to other departments, Aadnesen said. Other cost-cutting measures include using less fuel and running fewer trains, he said.
Laying off employees was a troubling and difficult decision but it was the right thing to do to keep the railroad operating, Aadnesen said.
"The only way you justify it in your mind is that by making the hard decisions and making the changes in process and reductions in the work force, that you can make it more stable and better for the employees that are still here and make them less worried about their jobs going forward," Aadnesen said. "That's how we justify it here at the company and at least how I do, personally."
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