A rail strike has been averted after marathon talks reached a tentative deal

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

It came after 20 hours of talks between union leadership and rail labor negotiators hosted by Labor Minister Marty Walsh. They began their meeting Wednesday morning with the clock ticking toward a strike that was set to begin at 12:01 a.m. ET on Friday.
President Joe Biden called in person to speak with negotiators around 9 p.m. ET on Wednesday, according to a person familiar with the talks. Biden stressed that it could cause catastrophic harm to families, businesses and communities if the rail system were to be shut down.
The agreement does not mean that the threat of a strike has dropped completely. The deal must be ratified by union members. But it’s good news for a wide range of businesses that depend on freight railroads to keep operating, as well as for the broader U.S. economy. About 30% of cargo in the country moves by rail.

A win for workers, railroads and the economy

The deal gives union members an immediate 14 percent raise with back pay starting in 2020 and a total raise of 24 percent over the five-year life of the contract, which runs from 2020 to 2024. It also gives them cash bonuses of $1,000 per day year.

Few other details of the deal have been released 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 resolved in favor of the unions.

“This is a victory for the tens of thousands of railroad workers who have worked tirelessly during the pandemic to ensure that America’s families and communities receive supplies of what has sustained us through these difficult years,” Biden said in a statement. “These rail workers will get better pay, improved working conditions and peace of mind about their health care costs: all hard-earned.”

Amtrak cancels all long-distance trains as rail strike looms

The dispute was over staffing shortages and scheduling rules that union leaders said had pushed their membership to breaking point. Unions say the railroads required their members to be “on call” and ready to report to work at short notice, even seven days a week. The leadership of both unions said their members would not accept a contract without changes to work rules.

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

It’s an important win for Biden, who faced nothing but bad choices if no deal was reached. Supporting congressional action sought by the business community to force a contract on workers would anger his union supporters. Letting the work stoppage play out risks huge economic consequences just before the midterm elections.

How we got here

Railroad workers are governed by different labor laws than most workers, limiting their freedom to strike and allowing greater government intervention. In July, Biden issued an order that prevented a strike at the time and created a group known as the President’s Emergency Council to try to resolve the dispute.

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

Biden could not order the railroads to continue operating after the cooling-off period ends on Friday. Only Congress could act to put unions back to work if a strike had begun.

With a wide range of business groups urging Congress to act, Republicans had prepared legislation that would give the railroads the deal they wanted. But Democrats opposed such actions.

A union source said the Democrats’ refusal to side with management was key to the negotiations.

“The inaction of Senate leadership has given space for these negotiations,” the union source said. He said Walsh had “stuck” with the union during negotiations.

“yesterday was crazy,” he said, with a lot of back and forth.

“Our people weren’t going to give up,” the source said. “Our people would go on strike” if a deal was not reached by Friday’s 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.

The pay raises and bonuses were recommended by a presidential panel tasked with trying to find a solution to the impasse in negotiations at the time.

Those terms were lucrative enough for most of the railroad unions to agree to tentative deals in recent weeks, with engineers and conductors, who faced work and schedule rules that didn’t apply to others, refusing to sign without relief on the matter. for the schedule.

Shares of major freight railroads — Union Pacific (UNP), CSX (CSX) and South Norfolk (NSK) — were between 1% and 3% higher in premarket trading on the news. Shares of Berkshire Hathaway (BRAGGING)which owns the nation’s fourth-ranked Burlington Northern Santa Fe freight railroad, was also slightly higher.
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