The Second Division consisted of the regular members and in
addition Referee Mortimer Stone when the award was rendered.
SYSTEM FEDERATION NO. 6, RAILWAY EMPLOYES'
DEPARTMENT, A. F. of L.-C. I. O. (Machinists)
DISPUTE: CLAIM OF EMPLOYES: 1. That the building, assembling, dismantling and repairing of diesel engines is Machinists' work under the current agreement.
2. That on March 12, 1955 the Carrier transferred the overhauling and repairs of one 16 cylinder diesel engine, serial No. 3346, from its shop at Silvis, Illinois to the Electro-Motive Division of General Motors Corporation.
3. That, accordingly, as a penalty for the aforementioned violation, the Carrier be ordered to compensate Machinists W. J. Mitchell and G. L. Canterbury an equal number of hours of labor charged to the Carrier by the ElectroMotive Division of General Motors Corp. for overhauling and repairs to this diesel engine.
EMPLOYES' STATEMENT OF FACTS: This carrier maintains at Silvis, Illinois its largest diesel locomotive repair shop, which is fully equipped to make any and all repairs to diesel locomotives and diesel engines, including the component parts thereof. This shop consists of a general erecting floor and overhaul department for diesel engines and appurtenances, such as compressors, governors, fuel pumps, injectors, cylinder heads and all other parts which are completely dismantled, repaired and assembled, in addition to a running repair department.
Machinists are regularly assigned at Silvis Shop to completely overhaul all types of diesel engines, including the 16 cylinder, E.M.D. engine referred to in this claim, and such rebuilding and overhauling is performed daily in this shop.
This carrier has recently taken the arbitrary and untenable position that despite any provisions in the agreement with its employes, it has the right to farm out or contract out the repairs to any equipment to an outside company or back to the factory whenever it sees fit, even though identical engines or equipment is being repaired and overhauled daily in its shop, on the apparent
compared with the high cost which would result from acquiring the plant and equipment needed to remanufacture engines on railroad property.
Because of the tremendous cost required to enable it to perform such work, and the high unit cost of such work, Rock Island has never attempted to perform it.
This case, we submit, resolves itself into one question, i.e., has the carrier, in its managerial responsibilities and prerogatives, the right to determine whether to repair worn-out and antiquated engines in kind or to take advantage of a manufacturer's service, such as the engine exchange basis, to secure remanufactured engines and remanufactured, modernized, improved, upgraded and warranted engines and a type of engine that only the manufacturer can produce and one which the manufacturer is constantly striving to improve and modernize.
The prerogative of management permits managing officers to choose between available methods in furthering the purpose of the carrier. If such method chosen is one ordinarily pursued by management in the industry, it should be considered as a proper exercise of managerial judgment. (See Awards 2377 and 2922 of your Board). In the instant case, it was the carrier's judgment that the proper and sensible thing to do was to take advantage of the engine exchange service offered by the manufacturer and secure from them a complete, modernized, upgraded, and warranted engine rather than attempt to repair or rebuild worn and antiquated 567-B engines in kind which would not give us the advantage of a rein anufacturezl, modernized, converted and warranted engine. The practice of trading used or worn-out or obsolete equipment as part of the purchase price of remanufactured, rebuilt or new equipment is not new, in fact, it is the usual custom.
As previously stated, the receipt of the remanufactured, modernized, improved, upgraded and warranted engines received on unit exchange purchase orders for older engines, bear more resemblance to the purchase of new engines than to the maintenance and rebuilding of old engines. (See Awards 2377 and 2922 of your Board).
We submit that this case is similar to that found in your Board's Awards 2377 and 2922.
We submit, also, without relinquishing our position as above, that the claimants involved were fully employed and, of course, car. show no loss of earnings or injury in connection with this case, but assuming their claim has merit, which, of course, we deny, it is a well-established principle of this and other divisions of the. Adjustment Board, that if penalty is to be assessed by this Board - and there is no rule in the employes' agreement providing for such -- it can only be at pro-rata rate.
On basis of the facts and circumstances recited in the foregoing, we contend there was no violation of the employes' agreement.
FINDINGS: The Second Division of the Adjustment Board, upon the whole record and all the evidence, finds that:
The carrier or carriers and the employe or employes involved in this dispute are respectively carrier and employe within the meaning of the Railway Labor Act as approved June 21, 1934. 3817-8 649
This Division of the Adjustment Board has jurisdiction over the dispute involved herein.
This case involves the same parties and agreement and presents the same issue as considered in Award 3816, and like award should follow.
The Machinists' Classification of Work Rule No. 53 of the current agreement reads in part as follows:
The work of dismantling, rebuilding and assembling of Diesel engines comes within and is subject to the provisions of the above rule and has been performed by this carrier's machinists. Further, under the date of August 4, 1948, the scope rule of the current agreement was changed to prevent the assignment of work to other than employes covered by this agreement and reads in part as follows:
When the carrier sub-contracted this work it violated .not only the said agreement but Section 2, Seventh of the Railway Labor Act. The Board should have ordered the carrier to obey the command of Section 2, First of the Act by complying with its duty to maintain the existing agreement.