Rail strike called off after Marathon talks reached potential deal

Washington DC
CNN Business

Unions and management avert a freight railroad strike by reaching a possible deal early Thursday Threats to paralyze US supply chain And push prices higher for many items.

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

According to sources, a verbal agreement was reached between the two sides at around 2:30 pm, according to ET, and the last hours were spent working out the details.

concluded about 20 hour conversation Between the union’s leadership and railroad labor negotiators, organized by Labor Secretary Marty Walsh. They began their meeting on Wednesday morning with the clock ticking on the strike, which was scheduled to begin at 12:01 pm on Friday.

President Joe Biden called in person to speak to negotiators Wednesday at 9 p.m. ET Wednesday, according to a person familiar with the talks. Biden insisted that catastrophic loss Families, businesses and communities can come to a halt when the rail system is shut down. Sources within the unions were giving Biden’s call credit for helping him complete the deal without a strike.

“We are very proud of what was accomplished,” said Jeremy Ferguson, president of the conductor’s union and one of the leaders involved in the marathon session. He thanked Biden and Labor Department officials involved in negotiating the deal.

“All pulled together to make sure we can give our members what they deserved,” he said.

“It’s a quality of life issue that we’ve been trying to get for our members since the bargaining began,” said Dennis Pearce, president of the union of engineers and other union official involved in the negotiations.

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

The deal gives union members an immediate 14% increase with back pay dating to 2020, and increases the total by 24% during the five-year life of the contract, which runs from 2020 to 2024. It also gives them a cash bonus of $1,000. year.

Few other details of the deal have been made public so far. But Biden’s statement indicated that major sticking points – including work rules and scheduling issues – that brought the country within a day of its first national rail strike in 30 years, were addressed in favor of unions.

Biden said in a statement, “This is a victory for the thousands of railroad workers who worked tirelessly during the pandemic to ensure America’s families and communities get what we deserve during these difficult years.” Have a delivery.” “These railroad workers will find better pay, better working conditions and peace of mind around health care costs: all hard-earned.”

The controversy was about staff shortages and scheduling rules that union leaders said had brought their membership to a breaking point. Unions say railroads require their members to be “on call” and ready to report to work at short notice as often as seven days a week. The leadership of both unions said that their members would not accept the contract without changing those working rules.

Biden also described the deal as “a win for railway companies, which will be able to retain and recruit more workers for an industry that will continue to be the backbone of the US economy for decades to come.” ”

It’s a significant victory for Biden, who made nothing but bad choices when the deal didn’t happen. His supporters among unions would have been angered by the business community’s support of Congress’s action to demand the imposition of a contract on workers. Stopping work just before the mid-term elections could jeopardize the economic consequences at large.

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

It also imposed a cooling-off period of 60 days, during which unions could not strike and management could not lay off workers. This cooling off period was supposed to end in the early hours of Friday.

Biden could not order railroads to continue operations after the cooling-off period ended on Friday. Had the strike started, only the Congress could work to get the unions back to work.

Calling Congress to act with a wide range of business groups, Republicans drafted legislation that could give railroad management the deal they wanted. But Democrats were opposed to such action.

A union source said the Democrats’ refusal to go along with management was the key to the talks.

“The Senate leadership did not act, giving room for these negotiations,” the union source said. He said Walsh had “hanged out” with the union during the talks.

“It was a slog yesterday,” he said, back and forth a lot.

The source said, “Our people were not going to give up. “Our people would have gone on strike” had there not been an agreement by the Friday deadline.

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

Pay increases and bonuses were recommended by a presidential panel charged with trying to find a solution to the impasse in talks at the time.

While those terms were tempting enough for most rail unions to agree to tentative deals in recent weeks, engineers and conductors, who were faced with work and scheduling rules that did not apply to others, offered relief on the scheduling issue. refused to sign without ,

Shares of Major Freight Railroads – Union Pacific


and Norfolk Southern

– Were 1% to 3% higher in premarket trading on the news. Shares of Berkshire Hathaway

Burlington, which owns the fourth National Freight Railroad, was narrowly higher as well as North Santa Fe.

Strike threats had already started disrupting operations. Amtrak, whose 22,000-mile system is almost exclusively on freight rail lines outside the Northeast Corridor, already had All long distance trains canceled, Amtrak said it is working “to quickly reinstate canceled trains and reach affected customers at the first available departure.” It said it would provide updates as soon as the information becomes available.

railway was already stopped accepting shipments of hazardous and safety related material a week ago. And on Wednesday some railroads stopped accepting shipments of crops from the agriculture industry.

Railroad customers who faced major problems expressed relief that the strike was averted.

“This is great news for the economy,” said Eric Hoplin, CEO of the National Association of Wholesale Distributors, in an appearance on CNN’s New Day Thursday. “My phone has been going off for the past 48 hours, talking to delivery leaders across the country, who were talking about what could be some disastrous consequences for America’s supply chain and economy.”

US economy avoided many economic blow, which also includes a possible hike in petrol prices, which could have undone a 26% drop in prices at the pump in the last three months. Although refineries get most of their oil through pipelines and send out most of the gasoline they produce in the same way, they also need other materials to refine the gasoline and remove waste products. Railroad tank cars are required to deliver.

According to business leaders and economists, higher prices of food and cars and a shortage of consumer goods during the holiday shopping season were likely if there was a longer strike.

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