BUSINESS + ECONOMY
Intensifying efforts to avert crippling rail strike go into overtime
Sep 14, 2022, 9:30 PM
(AP Photo/Gene J. Puskar)
(CNN) — Talks intensified Wednesday in hope of averting a freight railroad strike set for early Friday that could cripple the nation’s struggling supply chain and send prices higher for goods from gasoline to food to cars.
Two rail unions, representing more than 50,000 engineers and conductors who make up the two-person crews that make the trains run, are threatening the first rail strike in 30 years as of 12:01 am ET Friday. Union leaders and the railroads’ labor negotiators were meeting throughout the day with Labor Secretary Marty Walsh at his Washington, DC, office.
The talks were still continuing as of 9:30 pm ET, which might be a hopeful sign that perhaps progress was being made. But even if late night talks were a good sign, they were nothing new. Previous negotiations over zoom between the railroads and unions have lasted until 1 am or 2 am, said a person familiar with the talks.
A Labor Department spokesperson said Wednesday that the unions and railroad officials are “negotiating in good faith” and “committed to staying at the table” as discussions continue.
On Wednesday morning, White House press secretary Karine Jean-Pierre told reporters aboard Air Force One that “all parties need to stay at the table, bargain in good faith to resolve outstanding issues and come to an agreement. A shutdown of our freight rail system is unacceptable outcome for our economy and the American people, and all parties must work to avoid just that.”
The Labor Department asked both management and labor not to comment on the state of the talks, and neither responded to a request for comment.
Nearly 30% of the nation’s freight moves on the nation’s railroads. Many vital sectors — including oil refining, agriculture, auto and other manufacturing, plus the imports of consumer goods — depend on the railroads to operate. While a short strike would have a limited effect, economists say a strike lasting a week or more could have severe economic consequences.
The railroads announced last Friday that they had stopped accepting shipments of hazardous material, including fertilizer, as well as security-related materials, due to concerns that trains will immediately stop wherever they are once the strike begins. On Wednesday many stopped accepting shipments of agricultural products.
Members of Union Pacific train crews were informed by the railroad late Tuesday that if they’re in the middle of a trip when the strike begins at 12:01 am EST Friday they should park and secure their train and wait for transportation.
Freight railroad Norfolk Southern is planning to use management employees to operate a limited number of trains in the event of a strike Friday. That could allow critical materials to reach their destinations, like chlorine to water treatment plants.
“We’ll have some capability. Not a very good capability, but we’ll have some if it comes to that,” Norfolk Southern spokesman Connor Spielmaker told CNN Business Wednesday. “How we’re going to utilize them is still being planned out.”
Spielmaker said the railroads still hope to reach a deal with the unions and avert such a situation. Freight railroads CSX, BNSF and Union Pacific declined to say if they’ll be using management employees to operate trains in the event of a strike.
The threat of the strike could snarl commutes across the country. Many Amtrak and local commuter trains travel on railways owned by freight companies. If striking engineers park their trans midroute Friday morning, commutes could be disrupted. Amtrak on Wednesday said it canceled all long-distance trains starting Thursday, and it announced 10 additional routes would be shut down Thursday evening. Amtrak said additional delays or cancellations are possible.
Strike threat has White House under pressure
The effort to avert a strike is a major test for President Joe Biden and his White House, which has positioned itself as one of the most pro-labor administrations ever. At the same time, it also wants to avoid any potential shocks to the economy, especially with the midterm elections just seven weeks away.
Railroad workers are governed by a different labor law than most workers, one that limits their freedom to strike and allows for more governmental intervention. In July Biden issued an order that prevented a strike at that time and created a panel, known as a Presidential Emergency Board, to try to find a solution to the dispute. It also imposed a 60-day cooling off period during which the unions could not strike and management could not lock out workers.
But Biden cannot order the railroads to keep operating once the cooling off period ends Friday. Only Congress can act to keep workers on the job if there is no deal. Sen. Richard Durbin, the second highest ranking member of the Democrats’ Senate leadership, told CNN this week that Congressional action is unlikely, despite business groups calling on Congress to act. The Senate is in recess on Friday, and many members of Congress are flying to London to attend Queen Elizabeth’s funeral.
Fight not over wages
The PEB’s recommendations called for workers to get an immediate 14% pay raise, plus back pay dating back to 2020. It also called for a 24% increase in pay during the five-year life of the contract from 2020 to 2024, and cash bonuses of $1,000 a year.
But it did not address the staffing shortages and scheduling rules that have become the key sticking point in the dispute. The engineers’ and conductors’ unions say the railroads are requiring their members to be “on call” and ready to report to work on short notice as often as seven days a week. Leadership of the two unions say their members would not accept a contract without changes to those work rules.
There are more than 50,000 other unions members at the railroads who maintain tracks, operate signals, dispatch trains and work as mechanics, among other jobs. But they are not subject to the same work rules, and those unions already accepted tentative deals with the railroads based on the PEB’s recommendations.
One of those unions, the Machinists, announced Wednesday that its members voted to reject its tentative labor deal. There are about 5,000 members of the union at the railroads working as locomotive machinists, track equipment mechanics and facility maintenance personnel.
Their rejection of the proposed contract is not an immediate setback in efforts to avoid the strike. The union said it will not go on strike before the end of the month, as it tries to reach a change in the tentative agreement that its members will accept. But it is a sign of the complexity the railroads are facing in reaching deals with a dozen different unions that are also acceptable to rank-and-file membership.
Two other unions, the Brotherhood of Railway Carmen and the Transportation Communications Union, which between them have 11,000 members, ratified deals on Wednesday.
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