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Plant closings would threaten 64,500 employees at Republic and Jones & Laughlin, of whom 17,000 are already on layoff. United Steelworkers President Lloyd McBride said that his union might oppose the merger if "adequate provisions" were not made for the "job security and wellbeing" of the workers. But many employees were feeling at least a temporary sense of relief, particularly at Republic, where rumors had been swirling for a year that the firm could fold at any time. Said one Republic worker last week: "If we don't merge, maybe there won't be any jobs at all." U.S. antitrust officials may come to the same conclusion when they review the deal in the coming weeks.
Working on a Bigger Railroad
The Santa Fe and Southern Pacific railroads have been rough-and-tumble competitors since the 1880s, when they hauled carloads of cattle, sheep, grain and fortune-seeking passengers across the vast expanses of the American Southwest. Last week the two old rivals said that they would join forces to form the third largest railroad in the U.S., with 26,200 miles of track. If the $6.3 billion merger is completed as planned by the end of the year, only the Burlington Northern railroad (28,900 miles) and CSX (26,400) will be bigger. The combined Santa Fe-Southern Pacific network will stretch from Chicago in the North to New Orleans in the South to Portland in the West.
The new company will be not just a railroad, but a business empire. Over the years 30th lines have aggressively diversified. Chicago-based Santa Fe Industries (1982 -evenues: $3.16 billion) has gas wells, coal and uranium mines and a forest-products division. The company is one of the largest U.S. producers of heavy crude oil. San Francisco-based Southern Pacific (198_ revenues: $3.1 billion) operates petroleum pipelines and leases executive aircraft truck fleets, computers, mining machinery and communications equipment. With huge holdings of farm land, timberland and urban real estate, Southern Pacific is the largest private landlord in California.
The company also owns the nation's only operational coal-slurry pipeline, which runs 273 miles between Arizona and Nevada. The pipeline allows coal that has been mixed with water to be transported swiftly and cheaply. Though Southern Pacific and other companies have wanted to build numerous slurry pipelines, most railroads have opposed the projects as a threat to the lucrative business of shipping coal by train. Lobbying efforts by the railroads, along with rail labor unions and farmers, helped persuade the House to defeat last week, by a vote of 235 to 182, a bill that would have allowed slurry companies to build pipelines across private property if the landowners were compensated. The decision was a severe blow to the future of the pipelines.