Biden announces tentative deal to avert US railroad strike

The White House has reached an interim agreement to avoid a railway strike that threatened serious disruption across the United States, freight workers securing key demand on his terms, the president Joe Biden said Thursday.

The deal highlights the growing influence of the labor movement under an administration that has portrayed itself as a staunch ally of Labour, and comes after business groups and politicians warned a strike would disrupt services passengers and cripple supply chains.

“This deal is a big win for America,” Biden said at the White House on Thursday in remarks thanking union and railroad representatives, saying negotiators had been on their feet for 20 hours of marathon talks as the Friday’s deadline loomed.

For the president and his fellow Democrats, the deal offers a measure of political relief after growing fears that the economic fallout from a strike could further squeeze households affected by the stubbornly high inflation.

Freight industry officials had warned that a strike could cost the US economy some $2 billion a day.Bing Guan/Bloomberg via Getty Images File

“This is a victory for tens of thousands of railroad workers and for their dignity and the dignity of their work,” Biden said. “They showed up so every American could go on” during the pandemic. He also called the pact in principle a win for rail operators, saying it would strengthen their ability to hire and retain workers, and hailed carriers as a vital “backbone” of the economy.

The agreement, Biden added, showed that “unions and managers can work together for the benefit of all.”

As part of the deal – which will then be put to a vote among members of the country’s two largest freight unions – employees will for the first time be able to take time off work without pay for routine preventive medical care, union leaders said in a statement. There will also be exemptions from attendance policies for hospitalizations and surgeries, and workers will earn an additional paid personal day each year without fear of discipline.

The Brotherhood of Locomotive Engineers and Trainmen and the SMART Transportation Division – the two unions that have threatened to strike – welcomed the tentative agreement, which also includes a compound pay increase of 24% over its five-year term and a annual lump sum premium totaling $5,000. .

But while rail operators had already agreed to those pay changes ahead of Wednesday’s talks, a key sticking point remained: attendance policies that workers said made it nearly impossible to take planned days off. Railroad workers are often on call 24 hours a day, 7 days a week, and are only entitled to time off after being called to a certain number of consecutive on-call shifts. Unforeseen issues like doctor’s appointments have sometimes put workers on disciplinary paths, which can lead to dismissal.

A labor source told NBC News that getting rail carriers to negotiate on attendance policies was a significant breakthrough.

BLET and SMART-TD welcomed the tentative agreement in a joint statement Thursday. “The solidarity shown by our members, workers essential to this economy who keep America’s freight trains moving, made the difference in our unions securing settlement provisions that exceeded the recommendations” of federal mediators earlier this summer , they said.

If rank-and-file union members vote not to approve the plan, it will not go into effect and they could end up in negotiations. The deal includes a weeks-long “cooling-off” period to ensure no immediate train stoppage would occur if a vote failed.

A CSX Transportation Inc. mixed freight train approaches La Grange, Kentucky on January 13, 2020.
A freight train operated by CSX near La Grange, Ky., in 2020.Luke Sharrett/Bloomberg via Getty Images File

Joseph Hinrichs, the new CEO of railroad CSX, said employees “deserve these raises that they’re getting,” speaking on CNBC Thursday. “They’ve been through the pandemic and all the work they’ve done for us.” Hinrichs was not directly involved in the negotiations. (CNBC and NBC News are both part of NBCUniversal.)

After cancellation of long-distance routes ahead of a potential strike, Amtrak said Thursday it was “reaching out to affected customers to accommodate the earliest available departures.” Midwestern commuter rail carrier Metra said trains scheduled to be canceled by BNSF and Union Pacific will now run as scheduled Thursday evening.

As well as affecting travel, a rail strike has threatened a range of industries, from automotive to agriculture and retail, like approx. 40% of goods that are shipped over long distances depend on the national rail system. A shutdown could also disrupt energy shipments, which could lead consumers to pay more for gasoline, natural gas and electricity.

BLET and SMART-TD had said quality-of-life issues — primarily carrier scheduling practices that leave many workers on call 24/7, every week of the year — were a major hurdle. to an agreement and that they were ready to strike. .

The railways have downsized in recent years, running trains with even fewer staff and exacerbating the burden on workers, while the company profit margins have increased significantly.

The two largest freight rail companies posted record profits in 2021: BNSF made a net profit of almost $6 billionand the Union Pacific tube $6.5 billion. CSX hit a record operating ratio — a key industry metric that measures the share of revenue taken up by expenses, such as labor — for the third quarter. South Norfolk Railway announced a record cost/income ratio for 2021.

Earlier this summer, the Biden administration temporarily avoided a strike after convening a three-person board to study the matter and freeze negotiations. The panel last month recommended that workers receive increases amounting to 24% over a five-year period ending in 2024, with a 14% increase backdated to 2020 to be available immediately.

Workers, however, said increasingly punitive scheduling practices remained a problem in the industry due to a shrinking workforce. In July, more than 10 current and former workers spoke with NBC News on the conditions on the tracks, with all current workers saying they support a stoppage.

Biden, who has sworn to be the most pro-worker president in US history, championed workers’ rights throughout his first two years in the White House. For example, he created a task force to protect employee rights and worked to reverse rollbacks to worker protections under the Trump administration. The unions strongly supported the president, even if some felt he was unable to deliver on some promises last year.

Rob Wile, Mike Memoli, Shannon Pettypiece and Rebecca Shabad contributed.

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