PARTIES System Federation No. 114
 _TO Railway Employes' Department
 DISPUTE: AFL - CIO - Machinists
 and
 Southern Pacific Company (Pacific Lines)
 STATEMENT 1. That the Carrier violated Article II, of the September 25,
 OF CLAIM: 1964 Agreement, including Rule 40 of the current Working
 Agreement, when it improperly subcontracted out the maintenance
 work, servicing and repairing of International Scout Truck
 #1927 on the date of October 21, 1966, to an outside firm
 identified as International Harvester Company, Oakland, Cali
 fornia.
 2. That accordingly, the Carrier be ordered to additionally
 compensate Motor Car Mechanic W. R. Hardy (hereinafter
 referred to as claimant) on the basis of the number of hours
 of work of the machinists' craft performed by employes of the
 above named outside firm in performance of the maintenance,
 servicing and repair work required on the automotive equipment
 here involved.

 DISCUSSION: The identical issue contained in this dispute has been considered
 in sustaining Awards Nos. 3 and 42 and in denial Awards Nos. 63
 and 64. The instant dispute has been vigorously and very proficiently prosecuted
 and defended before this neutral. The historical background of this controversy,
 the intense research presented by each of the parties, and the far-reaching
 effect of this determination, has demanded and received serious and intent con
 sideration.

 Briefly stated, the Organization contends that Carrier violated Article II, of the September 25, 1964 Agreement, including Rule 40 of the current Working Agreement when it allowed servicing and repair of certain leased automotive equipment by lessor's designated franchised dealership. The Organization contends that this action constitutes sub-contracting of work which contractually belongs to employes. The Organization places emphasis on the fact that Carrier has "operational control" of the involved vehicle, and therefore, repair work belongs to employes. It also contends that motor car mechanics have performed work on leased vehicles in the past.
 - 2 - Award No. 73
 S.B.A. No. 570 Case No. 90

 Carrier contends that since it does not have title to the involved automotive equipment, Rule 40 of the current Agreement is not applicable, and that, therefore, the notice set out in Article II, Section 2, is not required. It also contends that the applicable Rule is contained in Article I, Section 2 (d). In other words, Carrier contends that its utilization of lessor's franchised dealers for service and repair of its leased automotive equipment does not constitute sub-contracting as contended by the Organization. Carrier also relies on Section 2 of the lease agreement to sustain its position, the pertinent part being:

In addition to the above quoted Section 2 of the Lease Agreement, the Lessor furnished Carrier with an "Operations and Maintenance Manual", which read:








The above Section 2 of the Lease Agreement and the "Operations and Maintenance Manual" furnished Carrier by Lessor are construed to be the pertinent parts of the entire Agreement Carrier had with Lessor.

 FINDINGS: An exhaustive and intense inspection of Awards Nos. 3, 42, 63,
 and 64; the application of Article II of the September 25, 1964
 Agreement, including Rule 40 of the Current Working Agreement; Article I,
 Section 2(d); and a study of the pertinent parts of the Lease Agreement compels
 this neutral to follow Awards Nos. 63 and 64 of this Board. It is found that
 these Awards (63 and 64) contain the better reasoning and are in keeping with
 principles of contract interpretation.

 It is found that Carrier does not have title to the automotive equipment involved; that Carrier is not in the automotive vehicle business, thereby allowing it to lease automotive equipment; and, therefore, Rule 40 does not apply in the determination of this issue.

 Although Article II of the Agreement of September 25, 1964, has been submitted as the basis for the Organization's contention, it is found that this case falls within the purview of Article I, Section 2(d). Article I,
 S.B.A. No. 570

Section 2(d) refers to "Lease or purchase of equipment * servicing or
 repairing of which is to be performed by the Lessor or Seller * * *." Article I,
 Section 2(d) involves the issue presented in this case. No notice of this
 leasing is required by Article I, Section 4. It is apparent that this special
 provision (Article I, Section 2(d)) gives recognition to the permission of
 leasing functions by Carrier. The practice of leasing or renting equipment is
 not considered to be "sub-contracting", and, therefore, this practice is not
 within the purview of Article 2 of the 1964 Agreement. It follows that the
 repair and/or maintenance work performed by the franchised dealer in accord
 ance with the lease agreement did not consitute "sub-contracting" as contem
 plated by the September 25, 1964 Agreement.

 Prior to the September 25, 1964 Agreement, Carrier had practiced extensive renting and leasing of automotive equipment. The same practice continued to be in evidence after the September 25, 1964 Agreement. It is found that there is nothing contained in the September 25, 1964 Agreement or in the report of Emergency Board No. 160 that prohibits or limits Carrier in its established practice of allowing the lessor of leased automotive vehicles to repair or maintain the same.

 It is found that the employes, in this instance, were not adversely affected because of this lease agreement. However, in the event employes become adversely effected because of such agreements, they may avail themselves of the Washington Job Protection Agreement of 1936 as set out in Article I, Section 2(d) of the September 25, 1964 Agreement.

 In conclusion, it is found that the September, 1964 Agreement did not intend to and does not prohibit or limit leasing practices existing prior to said Agreement. This Agreement merely subjected such practice to the protective provisions set out in Article I. In order to prohibit or limit such practice, subsequent negotiations on this subject must be entered into. This Board is without authority to write such non-existing prohibitions and limitations to this contract.

            In keeping with Award No. 63, this claim is denied.


                      A W A R D


            Claim denied.


            Adopted at Chicago, Illinois, April 2, 1968.


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      Carrier Member Fmploye Members


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