HERMON, Maine — The railway that owns the runaway train that devastated a small Quebec town almost two weeks ago, killing 50 people, has laid off 79 of its 179 workers because of the disaster, a company official said Wednesday.
Montreal, Maine and Atlantic Railway workers learned at the close of business on Monday that they would be temporarily unemployed immediately due to the “drastic drop in business” caused by the closure of the tracks through Lac-Megantic, Quebec, where the train explosion occurred on July 6, said Robert Grindrod, the company’s president.
“It is solely for that,” Grindrod said Wednesday. “We hope it will be temporary and then when other arrangements and other routes are developed, if and when the blockage and investigation is complete in Lac-Megantic, we hope to get back in business, but I can’t estimate the amount of time that is going to take.”
Grindrod could not immediately provide a breakdown of the number of American workers laid off. Canadian media reported that 17 unionized employees and two managers at Montreal, Maine and Atlantic Railway’s Canadian operations center have been temporarily let go.
Gov. Paul LePage’s spokeswoman, Adrienne Bennett, expressed sympathy for the laid-off workers. She promised that state government will do all that it can to help them.
“Unfortunately, the tragedy in Lac-Megantic has far-reaching effects and our hearts go out to all those affected by this terrible event,” Bennett said in a statement Wednesday. “Every Mainer who faces an uncertain future with their job is concerning and the Administration will support these workers as soon as we can.”
Montreal, Maine and Atlantic Railway is headquartered in Hermon and has about 200 customers in Canada, Maine and Vermont. The Lac-Megantic line is its primary route, Grindrod said.
Maine Department of Labor Rapid Response team workers were helping laid-off workers on Wednesday, Bennett said.
The U.S. Railroad Retirement Board administers the unemployment benefit program for railroad workers. Affected Montreal, Maine and Atlantic Railway workers would not participate in the state-funded unemployment system but would be eligible to use the services of the CareerCenter system, including the Maine Job Bank, and other Labor Department programs, department spokeswoman Julie Rabinowitz said.
The Rapid Response program of the Bureau of Employment Services assists workers facing job loss because of downsizing or closures.
The state also is communicating with Maine’s five freight hauling railroads should MMA file for bankruptcy protection or otherwise seek state help, Bennett said.
“Should the state need to intervene, we will be prepared to do so,” Bennett said. “That is why we are in contact with the five freight operators and we will continue to be as the situation develops.”
Montreal, Maine and Atlantic Railway workers have begun to create alternative routes for their customers’ freight, but that work typically takes at least a week to finish, said Grindrod, who doesn’t know when the Lac-Megantic line will reopen.
“The only people who are not being served are the customers in Lac-Megantic itself,” Grindrod said. “Everyone else in Canada and the U.S. is receiving some form of service.”
“While all those alternate routes are being planned, there is very little going on,” he added, estimating that as much as 80 percent of company traffic might eventually need to be rerouted.
Old Town Fuel and Fiber had been shipping 20 percent of its pulp on rail lines operated by Montreal, Maine and Atlantic Railway to customers in New York and other parts of New England, according to Everett Deschenes, the mill’s manager of fiber procurement and pulp sales. Since the accident, the mill has shifted that freight to truck or to Pan Am Railways, which operates another railroad in the state, Deschenes said.
It’s too early to tell whether the forced changes will increase the mill’s costs, but the loss of a rail line could have an impact, Deschenes said.
“We could potentially have increased costs due to the lack of competition,” he said, adding that Pan Am has so far been “very cooperative” in helping the mill address the issue.
When asked whether Old Town Fuel and Fiber expected to begin shipping again with Montreal, Maine and Atlantic Railway, Deschenes didn’t sound hopeful.
“At this time, I don’t see moving product with them in the foreseeable future,” he said. “And, frankly, their heads are somewhere else. They have to run a business, but they clearly have to deal with this issue, which has occupied a great deal of their time, I’m sure.”
The economic impact of the Lac-Megantic line’s closure upon Maine is difficult to assess, said Robert Elder, director of the office of freight and business services at the Maine Department of Transportation.
Montreal, Maine and Atlantic Railway’s operations continue in Maine, and statewide, rail freight traffic accounts for only about 8 percent of the state’s total freight movement. Trucking accounts for about 86 percent, Elder said.
“We have not had any shipper complaints,” Elder said.
State transportation officials since last week have been monitoring freight traffic with their Canadian counterpart, Quebec’s Ministry of Transport, to coordinate responses to the disaster, he said.
The rerouting is occurring amidst investigations of the disaster and Montreal, Maine and Atlantic Railway operations by several Canadian agencies, the U.S. Federal Railroad Administration and Maine Department of Transportation.
Federal Railroad Administration workers were at the Hermon office on Wednesday parsing records with Maine transportation inspectors, officials said. Rail administration workers began their inspections on Tuesday.
Should Montreal, Maine & Atlantic seek bankruptcy protection, the federal Surface Transportation Board would appoint another rail service to act as trustee to run the railway, said Nate Moulton, director of the state’s industrial rail access program for the Maine Department of Transportation.
The railroad’s status as a monopoly, and the impact upon Maine businesses that rely upon the railway if it ceased operations, would require the Surface Transportation Board to keep the line operating, Moulton said.
Moulton said state transportation officials hope the Surface Transportation Board would seek advice from state officials, who would act to protect railroad stakeholders.
“Inevitably in something like this,” Moulton said, “at least for a period of time there would be some inconvenience or pain” to companies that use MMA.
“You hope it goes as smooth as it can, but there is some disruption [of business] usually,” he added.
BDN Business Editor Whit Richardson contributed to this report.