Sunday, September 14, 2008

watching the bus drive by

Obligatory comment on the latest developments in the labor negotiations going on at the Port Authority.

First off, will there be a strike? It's amazing to me how many people I have spoken with recently who have been scared into believing a strike was imminent. Despite the fact that the two sides didn't mutually agree to the state factfinders report (which by the way has never happened in previous negotiations) nobody has said a strike was about to happen this weekend. Yes, the union drivers have made noise about striking if negotiations fail, but they never said it was going to happen anytime soon and this is still considered early in the process. The drivers have gone on strike four times in the 45 year history of the Port Authority: for 3 days in wildcat strike in 1971, for 7 days in 1973, 5 days in 1976 and 28 days in 1992. Works out almost exactly to an average of a day per year. I doubt they feel any more empowered to strike this time around than in any of the regular rounds of labor negotiations. People lose perspective, this happens every few years. Why does it seem like a much bigger deal this time is a great question. More politics involved this time for sure, but one of my answers is that the Port Authority's upper Management and fellow travelers have spent a lot more time and effort on PR this time around. Think about that some.

For those worried about an extended strike. The longest local transit strike in recent history was not against the Port Authority at all, but a 56 day strike against the then-privately owned Pittsburgh Railways Co. in 1956.

Anyway... I'll leave it at that. I have a lot more transit stuff that has been building up since I figured it only made sense to see what happened with the factfinders report. But it ought to be a quiet week on the transit-news front now that we are passed that. Maybe I will make this 'transit week' for posts. Assuming Pat Ford does not pop up in the news some more that is.


Anonymous Anonymous said...

From everything that I have heard, it's not a strike but a shutdown that is imminent. This is one of those circumstances where the status quo causes the company to run out of money (like US Airways--only US Airways could file for bankruptcy, which PAT cannot). Onorato's remarks after the union rejected the contract seem to confirm this general take on the situation.

Sunday, September 14, 2008 7:39:00 AM  
Blogger C. Briem said...

again that is misinformation. Bankruptcy for the Port Authority has been talked about in the past and is at least possible. There would be a lot of interesting legal questions to be answered if they tried to file. In some ways, the Port Authority is a distinct entity, but I wonder whether a court would consider it a de facto county agency. I'm sure someone would argue that it isn't. but the issues involved with a PAT bankruptcy is too big a topic to get into here, but for sure the idea bankruptcy is not an option is false and put out there as spin.

In fact, if they did shut down, most of their debt/liabilities would still be out there and have to be paid. So a shutdown would if anything accelerate bankruptcy in some form.

Sunday, September 14, 2008 12:56:00 PM  
Anonymous Anonymous said...

Thanks for your reply. As a follow up to my earlier question, I always thought that PA law prohibited a state agency/county/city from filing for bankruptcy (my memory is not perfect on this...I am just remembering the discussion relating to Act 47). Is that not true? Can PAT file for Act 47 protection?

Sunday, September 14, 2008 7:00:00 PM  
Blogger C. Briem said...

Lots of issues in that question. Too much to take up here but a few things:

Could PAT enter Act 47? Act 47 applies to municipalities. I won’t say it could never be applied to other forms of government, but that was not the intent, not the way it is worded, and it has only been applied to municipalities to my knowledge. To a large degree it does not apply to large special governments as some might consider the port authority.

Is bankruptcy prohibited? In general, but explicit in Act 47, is that any chapter 9 bankrupcy requires the permission of the state. That is not a prohibition but some people make it sound like it is. Nothing that says the state would not allow a bankruptcy to be filed under dire enough circumstances. They may even desire it depending. So even a municipality could conceivably file for bankruptcy as I have discussed here extensively for the case of the city of Pittsburgh. I am not a lawyer so I can say the fine points of the law do not matter in a certain sense. If money runs out and bills come due then legal bankruptcy or not.. technical bankruptcy happens.

And just as a case in point. AHERF was a large chapter 9 bankrupty in Pennsylvania, involving the loss of a lot more debt than would be in play here. So clearly its not impossible. Though I do wonder whether a federal bankruptcy judge would allow it to happen in the current circumstances. It’s funny to think about. If money runs out and they are barred from bankruptcy then they have no protection from creditors so folks who think they are owed money will do what? Sue to place liens on PAT assets? So the buses would be sold off to pay folks. That will not happen.

Sunday, September 14, 2008 7:58:00 PM  

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