Railroad strike averted after marathon talks reach tentative deal

washington d.c.
CNN Business

Unions and management reached a tentative agreement early Thursday, averting a freight railroad strike that threatened to cripple U.S. supply chains and drive up prices for many commodities.

The deal with unions representing more than 50,000 engineers and conductors was announced just after 5 a.m. ET in a statement from the White House, which called it “an important victory for our economy and the people American”.

It came after 20 hours of talks between union leadership and railroad union negotiators organized by Labor Secretary Marty Walsh. They began their meeting Wednesday morning with the countdown to a strike scheduled to begin at 12:01 a.m. ET Friday.

President Joe Biden called personally to speak to negotiators around 9 p.m. ET on Wednesday, according to a person familiar with the negotiations. Biden stressed that catastrophic damage could affect families, businesses and communities if the rail system is shut down.

The agreement does not mean that the threat of a strike has completely disappeared. The agreement must be ratified by union members. But it’s good news for a wide range of businesses that depend on freight railroads to continue operating, and for the entire US economy. About 30% of the country’s freight is transported by rail.

The deal gives union members an immediate 14% raise with back pay dating back to 2020, and raises totaling 24% over the five-year term of the contract, which runs from 2020 to 2024. It gives them also cash bonuses of $1,000 per year.

Few other details of the deal have so far been made public. But Biden’s statement indicated that the major issue that brought the country a day after its first nationwide railroad strike in 30 years had been resolved in favor of unions.

“This is a victory for tens of thousands of railroad workers who have worked tirelessly during the pandemic to ensure American families and communities receive deliveries of what has kept us going through these difficult years,” he said. Biden said in a statement. “These railroad workers will enjoy better pay, better working conditions and peace of mind about their health costs: all hard-earned.”

The dispute centered on staffing shortages and scheduling rules that union leaders said had brought their members to breaking point. The unions say the railways require their members to be “on call” and ready to report for work on short notice up to seven days a week. The leaders of the two unions had declared that their members would not accept a contract without modifying these working rules.

Biden described the deal as “also a win for railroads who will be able to retain and recruit more workers for an industry that will continue to be part of the backbone of the American economy for decades to come”.

It’s a significant win for Biden, who faced only poor choices had a deal not been reached. Supporting congressional action demanded by the business community to impose a contract on workers would have angered its supporters among the unions. Letting the work stoppage unfold risked having massive economic consequences just before the midterm elections.

Railway workers are governed by different labor laws than most workers, which limits their freedom to strike and allows for greater government intervention. In July, Biden issued an order that prevented a strike at that time and created a panel, known as the Presidential Emergency Board, to try to find a solution to the dispute.

It also imposed a 60-day cooling-off period during which unions could not strike and management could not lock out workers. This period of reflection was to end early Friday.

Biden could not have ordered the railroads to continue operating after the cooling-off period ended on Friday. Only Congress could have acted to get the unions back to work if a strike had begun.

With a wide range of business groups calling on Congress to act, Republicans had prepared legislation that would have given railroad management the deal they wanted. But Democrats were opposed to such action.

A labor source said the Democrats’ refusal to side with management had been key to the talks.

“The Senate leadership failing to act has given space for these negotiations,” the union source said. He said Walsh “hung on” to the union during negotiations.

“It was hard work yesterday,” he said, with a lot of back and forth.

“Our people weren’t going to give up,” the source said. “Our people would have gone on strike” if an agreement had not been reached by Friday’s deadline.

The Association of American Railroads also welcomed the deal and thanked the Biden administration, as well as the unions themselves, for their role in brokering a deal.

The pay rises and bonuses had been recommended by a presidential panel tasked with trying to find a solution to the deadlock in negotiations at the time.

Those terms were lucrative enough for most rail unions to agree to tentative deals In recent weeks engineers and conductors, who faced working and scheduling rules that didn’t apply to others, refused to sign without relief on the question of the schedule. .

Shares of major freight railroads – Union Pacific (UNP), CSX (CSX) and Norfolk Southern (NSC) – were between 1% and 3% higher in premarket trading on the news. Shares of Berkshire Hathaway (BRKA), which owns the fourth-largest national freight railroad, Burlington Northern Santa Fe, were also slightly higher.


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