Northern Maine fears loss of lifeline

February 14, 2001 Rudy Boutot, a leathery veteran of the logging trade, is the only one of 11 siblings who chose to remain in jobs-challenged Aroostook County, Maine, the Boston Globe reports. But in all his 66 years, Boutot said, he has never seen the economy this bad.

"It couldn’t be worse,”
he said glumly over a midafternoon cribbage game.

Hunters and fishermen are
shunning this recreational paradise at the tip of New England, and the bottom
has fallen out of a national housing market that once created a rollicking
demand for timber from the vast North Woods. Now, in a potentially crippling
loss for the region’s psyche and payroll, the railroad that hauls much of
northern Maine’s forest products wants to abandon 233 miles of track that state
and county officials say are critical to the county’s economy.

"It would be a permanent
blow,” said Denis Berube of the Northern Maine Development Commission. "It
would just bring the companies here that much closer to the point of no return.”

The Montreal, Maine &
Atlantic Railway, which owns the freight line that has helped connect Aroostook
County with the outside world since 1891, is losing about $5 million per year
and cannot ignore the bottom line, company officials said.

"It’s sort of the Maine
story: too many miles and too little revenue,” said Robert Grindrod, president
and chief executive of the railroad, which is seeking federal permission to
abandon its track from Millinocket to Madawaska. Under railroad law that weighs
private interest against public need, federal approval is needed before
unprofitable track can be shut down.

"It’s not that there aren’t
good customers,” Grindrod said. "There are not enough of them, and they don’t
do a large enough volume to support the number of miles of railroad that it
takes to provide them service.”

Aroostook County, an area
larger than Rhode Island and Connecticut combined, cannot afford to lose those
jobs, officials said. The county’s population has dropped by one-fifth since
1980, and 15.2 percent of its 71,000 residents live in poverty.

For two centuries,
however, the forest industry has been a mainstay in this hybrid of farmland and
wilderness. "This is the kind of work that is considered honorable up here;
this is what people understand,” Berube said.

About 85 percent of
freight hauled on the railroad is from the forest industry, including 140,000
tons of wood chips per year from Portage Wood Products. If those chips were to
be shipped by truck, mill manager Scott Daigle said, the markup in fuel and
other costs would lead to less demand, a shorter work week for his employees,
and a concurrent loss of income.

"Nothing good will come
of it if the tracks come up,” said John Cashwell III, managing director of
Portage Wood Products.

Closing the rail line
would be a calamity for Aroostook County, said Berube, who estimated that
losing the railroad would jeopardize 766 woods and manufacturing jobs and
indirectly affect 960 jobs in stores, restaurants, and suppliers that serve
those companies.

"It’s just a
destabilization that can have a ripple effect across this part of the state,”
Berube said.

But Grindrod said
business on those 233 miles, which run spiderlike to the extreme north of
Maine, has declined 40 percent since 2007, to about 6,000 rail cars last year.
The railway bought the line, previously operated as the Bangor & Aroostook,
in 2003.

There are 21 companies
that regularly use the rail line, and executives at several of them say they
have not been well served. They cite unreliable service, indifferent customer
relations, missing shipments, and poor maintenance on a railroad that sometimes
limits trains to speeds no greater than 10 miles per hour.

"They service you when it
accommodates them, not when it accommodates you,” said Don Tardie, managing
director of the Maine Woods Co., a large sawmill here. "There’s a level of
arrogance in this.”

Grindrod counters that
sharply declining revenue has meant less money for railway operations. The work
force, he said, has been slashed to 215 employees this year, from 325 in 2008.

The state of Maine wants
to purchase the tracks from the railroad company and has set aside $18 million
to do so, in an effort to continue service with a new operator. But the
Montreal, Maine & Atlantic wants to retain the right to pick up shipments
at either end of the tracks. The state, by contrast, is pushing for the right
to let a new operator run its trains past the end points and on to interchanges
with other railroads. That could be a less expensive option and give the new
railroad greater financial and schedule flexibility in its dealings with
customers.

If negotiations between
the state and the Montreal, Maine & Atlantic fail to produce a settlement,
the federal Surface Transportation Board can impose terms. But if those terms
are too expensive, state officials say, they might walk away from a deal to
keep the railroad afloat.

"This is about providing
a cost-effective transportation alternative to those shippers up there,” said
Nathan Moulton, director of the rail program for the Maine Department of
Transportation. "Otherwise, it’s unusable. There’s no sense in spending this
money if it’s going to be financially unfeasible.”

Cashwell, who sits on the
committee that is negotiating with the railroad, said he believes a deal will
be struck. But the continuing uncertainty is unnerving for many people.