Rail strike averted after lengthy talks reached agreement in principle

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.”

came next 20 hours of conversations Between union leadership and railroad 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 emphasized that catastrophic damage It can come to families, businesses, and communities if the rail system shuts 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 a wide range of companies that rely on freight railroads to keep operating, and for the broader American economy. About 30% of the country’s shipments are transported by rail.

A win for workers, railways and the economy

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.

Few other 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 victory 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 said in a statement. “These railroad workers will have better salaries, improved working conditions, and peace of mind about health care costs: all of this is their hard earned.”

Amtrak cancels all long-distance trains as freight rail strike approaches

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 described the deal as “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.

How did we get here

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 Senate leadership that did not act gave space to these negotiations,” the union source said. He said Walsh “clung to” the union during the 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 wage and bonus increases had been recommended by a presidential committee tasked with trying to find a solution to the impasse in negotiations at the 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. .

Shares of major shipping lines – Union Pacific (UNP)And the CSX (CSX) And the Southern Norfolk (National Security Council) It was 1% to 3% higher in pre-market trading on the news. shares Berkshire Hathaway (puddles)which owns the fourth national freight railroad, Burlington Northern Santa Fe, was also higher.

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