WASHINGTON, Sept 15 (Reuters) – Major U.S. railroads and unions reached a tentative agreement on Thursday after 20 hours of intense talks brokered by President Joe Biden’s administration to avert a rail shutdown that could have hit the food and fuel supply across the country and beyond.
If they accept the deal, which was announced around 5 a.m. (0900 GMT), workers whose wages had been frozen will earn double-digit raises and be able to seek certain types of medical care without fear of punishment, union leaders said. The deal includes an immediate pay rise of 14.1 percent, the railroads said.
Biden, greeting federal negotiators before delivering remarks celebrating the deal, thanked businesses and workers and promised more labor-business deals in the future.
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“I’m optimistic that we can do this in other fields as well,” the Democratic president said.
Unions, whose members bitterly rejected previous proposals, will now vote on the deal. Even if those votes fail, a rail strike that could have taken place as soon as one minute after midnight Friday has been avoided for several weeks because of standard language included in that deal, a person familiar with the matter said. the negotiations
Biden’s labor secretary, Marty Walsh, organized contract talks in Washington that lasted 20 consecutive hours between unions representing 115,000 workers and railroads, including Union Pacific ( UNP.N ), BNSF, CSX ( CSX.O ), Norfolk Southern ( NSC.N ) and Kansas. City of the South
Officials are expected to hold a news conference later Thursday.
Failure to reach an agreement before the deadline would open the way for workers to go on legal strike.
A rail shutdown could have frozen nearly 30 percent of U.S. freight shipments by weight, fueled inflation, costed the U.S. economy up to $2 billion a day, and set off a cascade of transportation problems that they affect the US energy, agriculture, manufacturing, healthcare and retail sectors. .
Railroad shares pared early pre-market gains after mixed economic data, with Union Pacific off 2.2% midday and CSX off 2.0%. Read more
US natural gas futures fell about 9% after rising 10% in the previous session; oil futures fell about 4% to a one-week low. Diesel and gasoline futures also fell. , read more Investors had hoped that a rail strike would have threatened the supply of coal to power plants and increased demand for rival energy sources. Read more
Amtrak, which runs passenger trains, said it will resume normal service Friday after canceling long-distance trains in anticipation of a strike. Read more
A Union Pacific rail car is parked at the Canadian Pacific Railway (CP Rail) Toronto Yard in Scarborough, Ontario, Canada March 20, 2022. REUTERS/Chris Helgren/File Photo
Read more
The impact of a shutdown would have extended beyond US borders because the trains link the US to Canada and Mexico and provide vital connections for massive ships carrying goods from around the world.
Negotiations between the companies and a dozen unions had dragged on for more than two years, prompting Biden to appoint an emergency board in July to help break the impasse. Biden personally called Walsh and negotiators Wednesday evening to push them toward a deal, telling them “once again to recognize the damage” a shutdown would do to families, farmers and businesses, according to one person knowledgeable about negotiations.
National Retail Federation CEO Matthew Shay welcomed the Biden administration’s intervention, adding in a statement that his group is “relieved and cautiously optimistic.” Emily Skor, CEO of biofuels trading group Growth Energy, also praised the deal, noting that much of the country’s ethanol moves by rail.
Freight railroads had stopped transporting hazardous goods, including chlorine for water purification and ammonia for fertilizer, as well as shipments of refrigerated food and other goods that use rail and at least one other medium of transport Their aim was to prevent the cargo from getting stuck in unsafe places.
JOB CUTTING
The rail industry cut nearly 30% of its workforce over the past six years, cutting wages and other costs as profits, share buybacks and dividends for investors increased. Profits at Berkshire Hathaway, ( BRKa.N ), billionaire Warren Buffett’s owner of BNSF, rose 9.2 percent in the most recent quarter to $1.7 billion.
The number of American railroad workers has dropped from more than 600,000 in 1970 to about 150,000 in 2022, according to the Bureau of Labor Statistics, due to technology and cost reductions. The result is that many industry workers are on call around the clock, waiting to respond on short notice to work for days at a time.
The latest deal follows some earlier recommendations from the president’s emergency mediators. It includes a 24 percent salary increase over a five-year period from 2020 to 2024, as well as $1,000 payments in each of the five years.
Biden, who has called himself the most pro-union president in history and attacked companies for making “excessive” profits, praised a deal he said would give workers “better wages, better working conditions and peace of mind about your healthcare costs.” .”
The president isn’t out of the woods yet when it comes to supply chain labor issues. About 22,000 union workers at 29 West Coast ports that handle nearly 40 percent of U.S. imports are also in major labor contract negotiations.
Administration officials wanted the disputes resolved before November’s midterm elections that will determine whether Biden’s fellow Democrats retain control of Congress.
Senior congressional leaders had threatened to pass legislation that would impose a resolution on the railroads and unions if negotiations were unsuccessful. US House Speaker Nancy Pelosi praised the tentative deal, saying Congress was “prepared to act” but that “thankfully that action may not be necessary.”
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Reporting by Trevor Hunnicutt in Washington; Additional reporting by Lisa Baertlein in Los Angeles, Steve Holland, David Shepardson and Susan Heavey in Washington, Stephanie Kelly in New York, Jahnavi Nidumolu, Aishwarya Nair, Bansari Mayur Kamdar and Kannaki Deka in Bangalore; Editing by Heather Timmons and Catherine Evans
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