Biden announces deal to avert rail strike that threatened huge disruption

President Joe Biden said Thursday that the White House has struck a tentative deal to avoid a rail strike that has threatened major disruptions across the United States, a key demand for freight workers under its terms .

The agreement highlights the growing influence of the labor movement under an administration that has cast itself as a staunch ally of Labor, and comes after warnings by trade groups and political officials that a strike would disrupt passenger services. and paralyze the supply chain.

“This agreement is a major victory for America,” Biden said Thursday at the White House, thanking representatives of unions and rail carriers as negotiators stayed for a marathon 20-hour-long talks as Friday’s deadline passed .

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

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

“This is a victory for thousands of railroad workers and for their dignity and the dignity of their work,” Biden said. “He showed up so that every American could keep going” during the pandemic. He also called the temporary agreement a victory for railway operators, saying it would boost their ability to hire and retain workers, and hailed the carrier as a vital “backbone” of the economy.

Biden said the agreement shows that “unions and managers can work together for the benefit of all.”

Under the deal – which goes to a vote between members of the country’s two largest freight unions – workers will for the first time be able to work unpaid time off for routine preventive medical care, union leaders said in a statement. There would also be exemptions from attendance policies for hospitalizations and surgical procedures, and employees would receive an additional paid personal day off each year without fear of discipline.

The Brotherhood of Locomotive Engineers and Trainmen and Smart Transportation Division – two unions threatened with a strike – lauded the tentative agreement, which includes a 24% compound wage increase over its five-year term and an annual one-time bonus payment totaling $5,000. ,

But while rail operators had already agreed to those compensation changes ahead of Wednesday’s talks, one important thing remained: attendance policies that workers said made taking planned days off nearly impossible. Railway employees are often on-call 24/7 throughout the year and are allotted time off only after being called for several consecutive on-call shifts. Unplanned issues such as doctor’s appointments have sometimes put employees on a disciplinary path, which can lead to dismissal.

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

BLET and SMART-TD in a joint statement on Thursday lauded the tentative deal. “The solidarity shown by our members, essential workers to this economy that keeps America’s freight trains running, has led to our unions receiving the provisions of the agreement that surpassed the recommendations of federal arbitrators earlier this summer,” he said. made a difference”, he said.

If rank-and-file union members vote not to approve the plan, it will not take effect and they could find themselves back in talks. The agreement includes a “cooling off” period of several weeks to ensure that there will be no immediate railroad closure if a vote fails.

A CSX Transportation Inc.  The mixed freight train arrives at La Grange, Ky., on January 13, 2020.
A CSX-powered freight train near La Grange, Ky., in 2020.Luke Sharrett/Bloomberg via Getty Images File

Joseph Hinrichs, the incoming CEO of railroad company CSX, said employees “deserve these raises that they are getting,” speaking to CNBC Thursday. “They’ve been through the pandemic and through everything they’ve done for us.” Heinrich was not directly involved in the conversation. (CNBC and NBC News are both part of NBCUniversal.)

After canceling long-haul routes ahead of a potential strike, Amtrak said on Thursday it was “reaching out to affected customers to accommodate on the first available departures.” Midwest commuter rail carrier Metra said trains that were canceled by BNSF and Union Pacific will now run as scheduled on Thursday evening.

In addition to affecting travel, a rail strike put many industries at risk, from autos to agriculture and retail, as nearly 40% of the goods shipped long distances depend on the country’s rail system. A standstill could also disrupt energy shipments, potentially causing consumers to pay more for gasoline, natural gas and electricity.

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

Railroads have cut their labor forces in recent years, running trains with fewer personnel and increasing the burden on workers, while significantly increasing the company’s profit margins.

The two largest freight rail companies saw record profits during 2021: BNSF net income was nearly $6 billion, and Union Pacific hit $6.5 billion. CSX achieved a record low operating ratio — a key industry measure that forecasts the share of revenue eaten up by expenses such as labor for the third quarter. Norfolk Southern Railway announced a record low operating ratio for 2021.

Earlier this summer, the Biden administration temporarily deferred the strike after convening a three-person board to study the issue and halt talks. The panel last month recommended that workers be given a 24% increase over the five-year period ending in 2024, with the 14% increase made available immediately through 2020.

However, workers said increasingly punitive scheduling practices remain an issue in the industry due to a shrinking labor force. In July, more than 10 current and former employees spoke with NBC News about the state of the railroad, with all current workers saying they supported a standstill.

Biden, who has vowed to become the most pro-labor president in US history, has supported workers’ rights in his first two years in the White House. For example, he created a task force to protect workers’ rights and worked under the Trump administration to undo the rollback of worker protections. Unions have strongly supported the president, although some felt he was unable to deliver on some of the promises he made last year.

Rob Wiley, mike memoli, Shannon Pettipiece And Rebecca Shabad contribution,

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