WASHINGTON - The merger of the Union Pacific and Southern Pacific railroads will give them control over the jobs and income generated by the chemical and plastics industry in Texas and Louisiana, Society of the Plastics Industry Inc. President Larry Thomas said Dec. 4. But while Thomas said he believes ``the effects of the merger on the cost of plastic resin will be felt by the [plastics] industry, its customers and ultimately, the world market,'' Southern Pacific President Don C. Orris said, ``Fears of rate increases are a straw man.''
SPI joined the Chemical Manufacturers Association and the National Industrial Transportation League to question the railroad merger. Thomas said SPI will sponsor a comprehensive study of the merger's impact on the plastics industry ``to develop a solution that will address concerns raised by the merger.''
The railroads filed documents with the Interstate Commerce Commission on Nov. 30 seeking a merger. Larry Kaufman, a Southern Pacific spokesman, said final ICC merger approval is not expected until late next year.
Thomas said Union Pacific and Southern Pacific already control 60 percent of all chemicals traffic in the Gulf Coast region, where three-quarters of the nation's plastic resins are produced and shipped.
``If this merger is allowed to go through,'' Thomas said, ``UP/SP and the recently merged Burlington Northern and Santa Fe railroads will control approximately 85 percent of all rail traffic in Texas and Louisiana, where 44 billion pounds of plastics resin production is concentrated.''
Kaufman produced a letter from Orris to the NITL board of directors, noting ``A few of the objections to the SP/UP merger come from interests so large that they are in a position to dictate to their transportation providers far more than those providers can dictate to them.''