July 18, 2013

Railway at center of tragedy struggling financially

Montreal, Maine & Atlantic lays off 79 workers after the Quebec crash severed Maine from its network and business dropped.

By Tom Bell tbell@pressherald.com
Staff Writer

The Maine company that owns the train that derailed and exploded in the center of Lac-Megantic, Quebec, on July 6 has lost much of its freight business and is struggling financially.

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In this July 6 file photo, smoke rises from derailed railway cars that were carrying crude oil in downtown Lac-Megantic, Quebec, Canada. The Maine company that owns the train that derailed and exploded in the center of Lac-Megantic has lost much of its freight business and is struggling financially because of the crash.

The Associated Press / Canadian Press

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Montreal, Maine & Atlantic Railway laid off 79 of its 179 employees Tuesday, with its work force in Maine bearing the brunt of the layoffs.

The train disaster, which killed 50 people just 10 miles from Maine's western border, has severed the company's rail lines in Maine from the rest of its network in Quebec and from national railroads that cross the continent.

Although Montreal, Maine & Atlantic's operations in Vermont are unchanged, the railroad can no longer carry oil tankers east through Maine to a refinery in Saint John, New Brunswick. And it can no longer offer manufacturers east of Lac-Megantic a rail connection to the west.

"We have lost a lot of business," said Ed Burkhardt, chairman of the railroad and president of its parent company, Chicago-based Rail World Inc. "We don't need to run many trains. Revenues are way down."

He said the layoffs are a temporary measure and the railway hopes to hire the workers back once revenues rebound. "We are doing what any company would do," he said.

Burkhardt said he is unaware of the details of the layoffs and does not know how many workers were idled in Maine.

Montreal, Maine & Atlantic, a relatively small company based in Hermon, owns 512 miles of rail. It operates in Maine and Quebec and serves customers in Vermont just south of the Quebec border.

Only 19 of the railway's 80 workers in Quebec have been laid off, according to the provincial branch of the United Steel Workers Union. Two of those employees are managers.

That means 60 of the company's employees in Maine -- more than half -- have been laid off.

The railroad's problems pose a logistical challenge for its customers in Maine that need to get products to market and receive supplies.

Everett Deschenes, manager of fiber and logistics at Old Town Fuel & Fiber, said the railway can still deliver wood chips to his company's plant from suppliers in northern Maine, but the plant is now using primarily Pan Am Railways to ship its product, pulp, to customers to the west. The plant has begun using trucks for shorter hauls.

Deschenes said Pan Am Railways is offering fair rates and not taking advantage of its new rail monopoly.

Cynthia Scarano, executive vice president of Pan Am Railways, said the normally competitive railroads are now cooperating to re-route freight and make sure commerce is not interrupted.

"Everybody is working together as a group to make sure things keep moving through the state," she said.

Pan Am Railways, which has 2,000 miles of rail in New England, offers connections to the west through Albany, N.Y.

Deschenes said it's upsetting to see Maine people lose their jobs.

"I am very saddened," he said. "My boys said they were good people to work with."

The train that exploded in Lac-Megantic was carrying 72 tanker cars filled with crude oil destined for a huge refinery in Saint John, New Brunswick, owned by Irving Oil Ltd.

While the route through Lac-Megantic was an important line for the Montreal, Maine & Atlantic Railway, equal amounts of western crude are being shipped from the west through southern Maine via Pan Am Railways and on Canadian National Railway tracks, according to CBC News.

(Continued on page 2)

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Additional Photos

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Rail cars sit on the Montreal, Maine & Atlantic Railway junction in Oakfield, Maine.

2010 Associated Press File Photo

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Rail World Inc. president Edward Burkhardt speaks to the media as he tours Lac-Megantic, Quebec, on Wednesday, July 10, 2013. A Rail World train crashed into the town killing at least 15 people. Burkhardt blamed the accident on an employee who he said had failed to properly set the brakes. (AP Photo/The Canadian Press, Paul Chiasson)


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