Profits First, Safety Second For Warren Buffett And BNSF?

Profits First, Safety Second For Warren Buffett And BNSF?
By USA White House [Public domain], via Wikimedia Commons

Not very folksy, and this coming right after the Kraft job layoffs

As an investor and advocate for the firms he owns, Warren Buffett has no equal. When it comes to weighing the safety of his employees and the general public versus profits, however, Buffett has a poor record. The recent effort by Warren Buffett and Republican Senator John Thune to delay critical safety upgrades for the railroad industry is an instructive case in point.

Get The Full Warren Buffett Series in PDF

Get the entire 10-part series on Warren Buffett in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues

The 3rd Annual 360 Degree Credit Chronometer Report with Joseph Cioffi

CreditValueWalk's Raul Panganiban interviews Joseph Cioffi, Author of Credit Chronometer and Partner at Davis + Gilbert where he is Chair of the Insolvency, Creditor’s Rights & Financial Products Practice Group. In the interview, we discuss the findings of the 3rd Annual report. Q2 2021 hedge fund letters, conferences and more The following is a computer Read More

Warren Buffett and BNSF lobbying muscle rolled back important train safety law

Just last week, Congress passed, and President Obama (the most conservative and business-friendly Democratic president in history) signed a law that delays the positive train control mandate for at least three years, with the potential for an additional two-year delay.

Safety advocates are up in arms, stunned by the lobbying muscle of Warren Buffett's BNSF to push the bill through despite the major Amtrak disaster earlier this summer that killed eight people and left dozens injured.

That means railroad operators can put off having to buy and install equipment that safety advocates say would have prevented accidents that have claimed more than 245 lives and caused over 4,200 injuries since the National Transportation Safety Board began calling for the technology in 1969. The railroad lobbyists led by BNSF argued that unless the law requiring positive train control technology was delayed, the railroad companies would undertake a "work slowdown" to hurt the economy. Railroad firms that did not install systems that automatically slow or stop a train under dangerous circumstances as required by the new law said that they would have greater liabilities operating outside of federal law, so they would have to refuse to carry passengers. By the same token, they would also have to stop deliveries of various dangerous but vital commodities, including chemicals such as chlorine and ammonia needed to operate water treatment plants and oil refineries, and keep farms and factories in production.

Buffett and Thune outmaneuvered safety advocates

Political analysts point out that opponents of rolling back the positive train control mandate, including senior Democratic Senators Diane Feinstein of California, Chuck Schumer of New York, Ed Markey of Massachusetts and Richard Blumenthal of Connecticut, were apparently outmaneuvered by the rail industry, with the help of Thune and a surprise interpretation of a little-known law.
"It is entirely inappropriate that the railroad industry would make hostages of America's passenger rail services and chemical shippers in order to secure their favored legislative outcome," Feinstein commented in an official statement. "It is offensive that only when a railroad could face full liability for an accident that they find operation without PTC to be unacceptably dangerous."

No posts to display