(Reuters) -The largest rail union in the United States said on Tuesday it intends to oppose Union Pacific’s proposed $85 billion acquisition of smaller rival Norfolk Southern in regulatory proceedings, citing concerns about how the largest-ever buyout in the sector will affect U.S. workers and infrastructure.
The transportation division of SMART, the International Association of Sheet Metal, Air, Rail and Transportation Workers, said it plans to oppose the merger when it comes before the Surface Transportation Board for review.
“We approach this development with measured skepticism rooted in the real-world impact such consolidation could have on rail workers, safety, service quality, and the long-term health of the freight rail industry,” the union said in a statement.
A spokesperson for Union Pacific did not immediately respond to a request for comment.
The deal, announced earlier on Tuesday, drew mixed reactions from Republicans in Congress.
U.S. Senator Josh Hawley, a Republican from Missouri, said he was concerned.
“I don’t know enough to know, but if they’re concerned, I’m concerned,” Hawley told Reuters, referring to SMART, which endorsed him for reelection in 2024, citing his support for rail safety.
“It’s going to be a great deal for America, it’s going to be a great deal for Nebraska,” Senator Pete Ricketts, a Republican from Nebraska, where Union Pacific is based, told Reuters.
Union Pacific shares were down 3.3% at $221.64 on Tuesday afternoon, while Norfolk Southern shares were down 3.4% at $276.97.
If approved, the deal would create the country’s first coast-to-coast freight rail operator, combining Union Pacific’s stronghold in the western two-thirds of the United States with Norfolk’s 19,500-mile (31,382 km) network that primarily spans 22 Eastern states.
Union Pacific has had the most accidents, injuries, and fatalities in the industry in recent years, and has shown a willingness to lay off workers including engineers and conductors even during periods of stability, SMART’s Transportation Division said. The union also raised concern that Union Pacific’s practice of leasing out its infrastructure could affect service quality.
The labor union said the deal could lead to a duopoly in U.S. rail. Competitors BNSF, owned by Berkshire Hathaway, and CSX are exploring merger options, Reuters has reported.
“Both history and logic suggest this would drive higher rates, fewer service options, and diminished competition. Shippers and communities deserve more than a monopoly in disguise,” SMART said.
(Reporting by Jody Godoy in New York, Additional reporting by David Shepardson and Bo Erickson in Washington; Editing by Chizu Nomiyama and Matthew Lewis)
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