Less than 24 hours before a freight railroad strike could have legally started, 12 of 13 union factions reached a tentative five-year contract. The International Association of Machinists and Aerospace Workers District 19 rejected the tentative agreement but agreed to delay any work stoppage until Sept. 29.
“Moments ago, following 20 consecutive hours of negotiations at the Department of Labor, rail companies and union negotiators came to a tentative agreement that balances the needs of workers, businesses, and our nation’s economy,” a Labor Department spokesperson reportedly said. “Our rail system is integral to our supply chain, and a disruption would have had catastrophic impacts on industries, travelers and families across the country.”
Anticipating a strike-averting deal would not be brokered in time, railroads announced they would stop transporting essential items such as grain, fertilizer, fuel, and others that would impact the country’s food supply.
“Our members rely on about 27 million bushels of corn and 11 million bushels of soybean meal every week to feed their chickens,” Tom Super of the National Chicken Council reportedly said. “Much of that is moved by rail.”
The possibility of 125,000 railroad workers walking off the job and grinding freight transportation to a halt prompted the White House to prepare an emergency declaration. In the U.S. Senate, lawmakers introduced a measure that would require the unions to adopt the wage and benefits recommendations provided by a presidential board. In the U.S. House of Representatives, Speaker Nancy Pelosi appeared poised to intervene and prevent a nationwide strike.
“Congress stood ready to take action,” and “ensure the uninterrupted operation of essential transportation services and has in the past enacted legislation for such purposes.” Speaker Pelosi reportedly said. “Thankfully this action may not be necessary. We congratulate the unions and railroads for coming to an agreement because it is in the national interest that essential transportation services be maintained.”
This was a high-stakes game of chicken with $2 billion in daily freight movement at risk during a time of persistently high inflation as farmers bring in the fall harvest.
“A strike that shuts down our railways will have cascading effects across the country,” Joshua Bolten, Business Roundtable CEO and former White House chief of staff, reportedly said. “We’ve been experiencing a lot of headwinds from supply chain problems since the pandemic started, and those problems would be geometrically magnified by a rail strike.”
Early reporting indicates rail workers would accept the 24 percent wage increase suggested by the White House emergency board. Union members had been laboring without a contract since 2020 and a new five-year deal would carry them through 2024. Backdated pay would result in members receiving upwards of $11,000 once the contract has been ratified by a rank-and-file vote. Officials appear to be taking a few weeks to cool off from the emotional negotiations before putting the measure to a vote. Members sought a larger wage increase and improved working conditions. The status of those items was not immediately released.
Sources: wsj.com, ajot.com, politico.com
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