Rail strike averted after lengthy talks reached agreement in principle

Washington DC
CNN Business

Unions and management reached a tentative agreement early Thursday to avoid the freight rail strike that threatened to paralyze US supply chains and drive up prices for many goods.

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

This came after 20 hours of talks between union leadership and railroad labor negotiators hosted by Labor Secretary Marty Walsh. They began their meeting on Wednesday morning with the ticking of the clock for a strike that was scheduled to begin at 12:01 a.m. ET on Friday.

President Joe Biden was personally summoned to speak to negotiators at about 9 p.m. ET Wednesday, according to a person familiar with the negotiations. Biden stressed that catastrophic damage could be done to families, businesses and communities if the rail system were shut down.

The agreement does not mean that the threat of a strike is completely eliminated. The transaction needs to be approved by the union members. But it’s good news for the wide range of companies that rely on freight railroads to keep operating, and for the broader US economy. About 30% of the country’s shipments are transported by rail.

Few details of the deal have been announced so far. But Biden’s statement indicated that the main issue that brought the country within a day of the first national rail strike in 30 years had been addressed in favor of unions.

“It is a win for the tens of thousands of railroad workers who have worked tirelessly through the pandemic to ensure that American families and communities have deliveries that keep us going through these difficult years,” Biden’s statement said. “These railroad workers will have better wages, improved working conditions, and peace of mind about health care costs: it’s all their hard earned.”

The dispute was over staffing and scheduling rules that union leaders said had brought their membership to the breaking point. Unions say the railways are asking their members to be “on call” and to be ready to come to work on short notice, seven days a week. The leadership of the two unions said their members would not accept a contract without changes to those work rules.

Biden called the deal “a victory also for the railroad companies that will be able to retain and hire more workers in an industry that will continue to be a part of the backbone of the American economy for decades to come.”

It’s an important victory for Biden, who has faced nothing but bad choices if no deal is reached. Support for the Congressional action that the business community sought to impose a contract on workers would have angered his supporters among unions. Letting downtime lead to dire economic consequences ahead of the midterm elections.

Railroad workers are subject to a different labor law than most workers, one that limits their freedom to strike and allows for more government intervention. In July, Biden issued an order hit blocked At that time it set up a committee, known as the Presidential Emergency Council, to try to find a solution to the conflict.

It also imposed a 60-day cooling-off period during which unions could not strike and management could not close workers. The cooling-off period was due to end early Friday.

Biden could not have ordered railroads to continue operating once the cooling-off period ended on Friday. Congress could only act to bring unions back to work if a strike had begun.

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

A union source said Democrats’ refusal to side with the administration was key to the talks.

The union source said: “The Senate leadership, which did not act, gave space to these negotiations.” He said Walsh had “clung to” the union during negotiations.

“It was work yesterday,” he said, with plenty of back and forth.

“Our people will not give up,” the source said. “Our people would have been struck” if no agreement had been reached by Friday’s deadline.

The American Railroad Association also praised the deal and thanked the Biden administration and the unions themselves for their role in reaching an agreement.

The deal gives union members an immediate 14% raise with a late pay dating back to 2020, and raises a total of 24% over the five-year contract period, running from 2020 through 2024. It also gives them cash bonuses of $1,000. general. These conditions were recommended by a presidential committee tasked with trying to find a solution to the impasse that the negotiations reached at that time.

Those terms were lucrative enough for most rail unions to agree to tentative deals in recent weeks, and engineers and conductors, faced with working and scheduling rules that didn’t apply to others, refused to sign without easing on the scheduling issue. .

Major Shipping Lines Shares – Union Pacific


South Norfolk

(National Security Council)
It was 1% to 3% higher in pre-market trading on the news. Berkshire Hathaway Stock

which owns the fourth national freight railroad, Burlington Northern Santa Fe, was also higher.

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