DETROIT/LOS ANGELES, Sept 14 (Reuters) – Biden administration officials held labor contract talks on Wednesday afternoon to avert a possible rail shutdown that could disrupt cargo shipments and hamper food supplies and fuel, but a small union rejected a deal and Amtrak canceled it. long distance passenger travel.
Railroads including Union Pacific ( UNP.N ), Berkshire Hathaway ( BRKa.N ) BNSF and Norfolk Southern ( NSC.N ) have until one minute after midnight on Friday to reach agreements with three unions representing about 60,000 workers before ‘a work stoppage affecting freight and Amtrak could begin.
Talks between unions and railroads, which began at 9 a.m., were still ongoing more than 12 hours later after 9 p.m. ET Wednesday at the U.S. Department of Labor headquarters in Washington.
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The talks are being overseen by Labor Secretary Marty Walsh, with input from other US officials. The parties ordered Italian food for dinner on Wednesday to continue discussions.
“Everybody’s going to have to move a little bit to get a deal,” Buttigieg told reporters on the sidelines of the Detroit auto show.
A union representing about 4,900 machinists, mechanics and maintenance workers said Wednesday its members voted to reject a tentative deal.
Railroad workers have gone three years without a raise amid a contract dispute, while rail companies have posted strong profits.
In current talks, the industry has offered annual wage increases from 2020 to 2024, equivalent to a compound rise of 24%. Three of the 12 unions, which represent about half of the 115,000 workers affected by the negotiations, are demanding better working conditions.
Two of those 12 unions, representing more than 11,000 workers, have ratified agreements, the National Carriers’ Conference Committee (NCCC), which is negotiating on behalf of the railroads, said Wednesday.
Unions are enjoying a boost in public and worker support in the wake of the pandemic, when “essential” employees risked exposure to COVID-19 to keep goods moving and employers reaped huge profits, say labor and corporate experts.
A shutdown could freeze nearly 30 percent of U.S. cargo shipments by weight, stoke inflation, cost the U.S. economy up to $2 billion a day and trigger a cascade of transportation problems that affect sectors of US energy, agriculture, manufacturing and trade.
A freight train is seen near the U.S.-Mexico border in Laredo, Texas, U.S., June 3, 2019. REUTERS/Carlos Jasso
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White House spokeswoman Karine Jean-Pierre told reporters aboard Air Force One that shutting down the freight rail system would be an “unacceptable outcome for our economy and the American people and all parties must work to avoid this.”
HIGH STAKES FOR BIDEN
President Joe Biden’s administration has begun making contingency plans to ensure deliveries of critical goods in the event of a shutdown.
The stakes are high for Biden, who has pledged to curb rising consumer costs ahead of the November election that will determine whether his fellow Democrats retain control of Congress.
“Unless they get a breakthrough soon, railroad workers are going on strike this Friday. If you don’t think this is going to have a negative impact on our economy … think again,” said Sen. American John Cornyn, Republican critic and Biden. .
Sen. Bernie Sanders on Wednesday afternoon opposed a Republican bid to unanimously pass legislation to prevent a railroad strike, pointing to the benefits the railroad industry has reaped.
If no agreements are reached, employers could also lock out workers. The railroads and unions may agree to stay at the bargaining table, or the Democratic-led U.S. Congress could step in by extending the talks or setting terms of a deal. Read more
House Speaker Nancy Pelosi said it was unclear whether Congress would step in, noting that the main issue is the lack of sick leave for workers.
Amtrak, which uses tracks maintained by freight railroads, said it would cancel all long-distance trips Thursday and some additional state-backed trains. Read more
The rail hubs of Chicago and Dallas were already clogged and suffering from equipment shortages before the contract showdown. These bottlenecks are backing up cargo at US seaports for up to a month. And, once cargo arrives at rail hubs in places like Chicago, Dallas, Kansas City and Memphis, Tenn., it can sit for another month or more.
Package delivery company United Parcel Service ( UPS.N ), one of the largest U.S. rail customers, and U.S. seaports said they are working on contingency plans.
Meanwhile, factory owners worry about idling machinery, while automakers worry that a shutdown could lengthen wait times for vehicle buyers. Elsewhere, food and energy companies are warning that additional service disruptions could lead to even steeper price hikes.
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Reporting by David Shepardson and Lisa Baertlein; Additional reporting by Jeff Mason aboard Air Force One; Joe White in Detroit; Chris Walljasper in Chicago and Abhijith Ganapavaram in Bangalore; Editing by Will Dunham, Jonathan Oatis, Bill Berkrot and Michael Perry
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