White House receives plan on ending railway contract dispute

By AP News

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OMAHA, Neb. (AP) — The special board to intervene in stalled railroad contract talks submitted its recommendations to the White House Tuesday on a potential deal covering 115,000 rail workers and avert a strike, but details of their recommendations weren't immediately available.

OMAHA, Neb. (AP) — The special board appointed by President Joe Biden to intervene in stalled railroad contract talks submitted its recommendations to the White House Tuesday on a potential deal covering 115,000 rail workers and avert a strike, but details of their recommendations weren't immediately available.

Railroads and unions will use those recommendations as the basis for a new round of negotiations over the next month. If they still can't agree on a new deal by mid September, federal law would allow a strike or lockout, but Congress is likely to intervene before then to keep the supply chain moving.

A railroad strike could devastate businesses that rely on Union Pacific, BNSF, Norfolk Southern, CSX and other major freight railroads to deliver raw materials and ship their products. That's why Congress isn't likely to allow a strike to happen. In past national rail labor disputes, lawmakers have voted to impose terms on the railroads before workers could strike.

A White House official said Biden is optimistic the report will provide a good framework for successful negotiations because avoiding a rail shutdown is in the nation's interests.

The report was distributed to the parties Tuesday, but the railroads and the unions didn’t immediately comment on any details. It wasn’t immediately clear how quickly the National Mediation Board would post the report online.

The railroads entered the Presidential Emergency Board process a month ago far apart from the 12 unions taking part. The unions have been seeking a 31% raise over the five years of the deal while the railroads were offering only 17% in compounded raises. The unions also don't want to see the cost of their health care coverage go up much in a new contract.

Railroad workers have gone without a raise since 2019 while the contract talks drug on. The workers expect to be compensated after staying on the job throughout the pandemic and enduring extensive job cuts in recent years. And strikes have become more common over the last two years in a variety of industries because unions generally feel empowered to ask for more.

The major freight railroads have eliminated nearly one-third of their jobs over the past six years as they overhauled their operations to run fewer, longer trains that need fewer locomotives and employees. Unions say the railroads expect more from the workers who remain, and that some railroads' tightened attendance policies make it harder to take time off because of all the job cuts.

In addition to disagreements over wages and benefits, unions have staunchly opposed a proposal from the railroads to cut the number of workers in a locomotive from two to one. A new proposed federal rule that would require two-man crews in most instances should make it harder for railroads to reduce crew sizes, but the railroads have been pressing for the change for several years. The unions argue that keeping two people on the crews isn't just about preserving jobs, but also safety.

Reaching a new agreement would likely make it easier for railroads to hire new employees, which they acknowledge they need to do to improve service and cut down on the delays that have plagued freight shipments this year. The major freight railroads have all said they want to hire hundreds more workers, but worker shortages are making that difficult.

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Author: AP News

This article does not provide any financial advice and is not a recommendation to deal in any securities or product. Investments may fall in value and an investor may lose some or all of their investment. Past performance is not an indicator of future performance.

Originally published by Associated Press Valuethemarkets.com, Digitonic Ltd (and our owners, directors, officers, managers, employees, affiliates, agents and assigns) are not responsible for the content or accuracy of this article. The information included in this article is based solely on information provided by the company or companies mentioned above.

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