National Negotiations

Dear Ms. Mansfield:

This is in regard to the statement submitted to you by Mr. Robert F. Allen, Chairman, National Railway Labor Conference, dated March 31, 2003, relative to the Machinists' request that the National Mediation Board provide a proffer of arbitration in regard to the above briefly identified subject.

The Machinists' Organization takes exception to Mr. Allen's statement that, "We are disappointed that the IAM is pressing to move beyond peaceful bargaining to a potential strike at a time that the nation faces difficult and unprecedented challenges both at home and abroad."

To the contrary, the Machinists have at no time indicated to any party involved in the current round of National Negotiations that our goal is to move to any point other than obtaining a fair and equitable agreement in behalf of the IAM members employed within the railroad industry who have been waiting for more than 39 months for such an agreement.

Mr. Allen indicates in the second paragraph of his statement that, "The mediation process should not be terminated unless and until the Board has concluded that a voluntary agreement cannot be reached despite its best efforts."

Contrary to Mr. Allen's allegation that "the parties have successfully narrowed the issues that divide them," the parties are probably further apart on the issues than at any time since negotiations began in January of 2000. At this time, the parties have not agreed on a single issue.

On a number of occasions, the Machinists have advised both Mr. Allen and the appropriate representatives of the National Mediation Board that the parties are at an obvious total impasse and that a "voluntary agreement" cannot be reached despite the Board's best efforts. In the instant case, the Carriers have rejected all the proposals submitted by the Machinists to settle the current outstanding Section 6 Notices. Alternatively, the Machinists have been unable to accept what the Carriers have deemed to be their best and final offer regarding the issues to be resolved.

Since the Board has been involved in this dispute for over two years without bringing the parties to an agreement on even one issue, it is now appropriate for the Board to proffer arbitration pursuant to our request.

The Carriers and the National Mediation Board are well aware of the Machinists' position that the recent Harris Award adjudicating the wage and rules dispute between the TCU and the NRLC will absolutely not serve as a voluntary agreement to resolve the parties' respective Section 6 Notices.

It is my understanding that as recently as March 20, 2003, District 19 President Directing General Chairman Robert Reynolds advised Mediator Les Parmalee that the Harris Award would be totally unacceptable to IAM members as a voluntary agreement. Mr. Reynolds also advised Mr. Parmalee that the Board should proffer arbitration and move this round of negotiations to the next step under the Railway Labor Act which could well result in an agreement being reached that would be satisfactory to all concerned.

Mr. Allen's indication that the Carriers were willing to meet with the Machinists "on the first available date they had" is questionable in view of the fact that the Carriers were not willing to meet at any place at any time during the period between February 28 and April 16, 2003. If the Carriers are as committed to reaching an agreement with the Machinists as Mr. Allen would have one believe, I am confident they would have arranged their schedules to meet with us in less than a seven-week period.

Finally, Mr. Allen's position that the Carriers' agreements with four other labor organizations should or will shape and influence the Carriers' agreement with the Machinists Organization is without any basis of support. The Machinists have plainly indicated to all concerned that other rail - labor agreements reached during this round of National Negotiations are simply not acceptable to us for a number of reasons which have been plainly stated for the record at previous conferences and discussions.

As previously indicated by the undersigned on a number of occasions, the Machinists' request for a proffer should be immediately approved by the National Mediation Board in order that the parties can move toward reaching an agreement pursuant to the provisions of the Railway Labor Act.

Please advise of the Board's intent regarding our request for a proffer.

Sincerely yours,

Robert Roach, Jr. GENERAL VICE PRESIDENT