Biden intervenes in rail contract fight to block strike

OMAHA, Neb. — President Joe Biden stalled a freight railroad strike for at least 60 days on Friday by appointing a board of arbitrators to mediate the contract dispute, averting action that could have disrupted all manner of shipping.

The widely anticipated move will keep 115,000 railway workers on the job while arbitrators work out a set of contract recommendations for both sides to consider. Biden had to act before Monday to prevent a possible strike. A new round of negotiations is likely after the publication of these recommendations.

The president wrote in an executive order appointing the arbitrators that he had “been advised by the National Board of Mediation that, in its judgment, these disputes posed a substantial threat to disrupt interstate commerce to a degree that would deprive part of the country of an essential transportation service.”

If the railroads and their 12 unions fail to agree on a contract within the next 60 days, Congress will likely step in to prevent a strike by voting to impose terms or taking other action.

The United Rail Unions coalition said the unions are preparing to take their case to the arbitration board and believe current economic data shows the increases they are asking for “are more than justified in relation to the contribution of our members to record profits. rail carriers.

The National Carriers Conference Committee, which represents the country’s freight railroads in national labor negotiations, applauded Biden’s decision, noting that it “remains in the best interest of all parties – and the public.” – that the railways and railway unions settle negotiations quickly on reasonable terms that offer employees quick and well-deserved wage increases and prevent disruptions to rail service.

“Throughout the round of negotiations, the railways have worked to thoughtfully resolve the issues raised by both sides and have offered wage increases in line with labor market benchmarks and rewarded railway employees for their essential work,” the committee said in a statement.

Any prolonged rail strike could cripple the supply chain which is slowly recovering from the backlogs and delays that have become common during the pandemic due to worker shortages at ports, trucking companies and railroads as the import demand was increasing.

“It’s really in everyone’s interest to avoid a strike,” said Edward Jones analyst Jeff Windau.

The group that represents Union Pacific, BNSF, CSX, Norfolk Southern, Kansas City Southern and other railroads and unions expressed optimism that this new presidential council will be able to help them resolve the dispute that began there over two years ago.

Business groups had urged Biden to take the step to ensure the railroads would continue to operate. They worry about the consequences of a strike or lockout on the fragile supply chain, as the railways deliver all kinds of raw materials, finished products and imported goods that businesses rely on. A railway strike could jeopardize the health of the economy.

The arbitration board will hold hearings with both parties to learn more about their positions before issuing their recommendations in about a month. Unions and railroads will have 30 days to negotiate a new deal before a strike is allowed under federal law that governs railroad contract negotiations.

So far, the two sides have stayed away because workers want increases that will offset inflation and cover rising health insurance costs while reflecting current worker shortages nationwide. The railways argue that the double-digit raises they are offering on the five-year contract that would go back to 2020 are fair based on the kind of raises other companies gave their workers at the time.

Unions expect big increases because the railways have posted record profits in recent years as they cut nearly a third of their employees in the past six years as they overhauled their operations.

The unions also want the railways to drop their proposals to cut train crews from two to one and relax some of the strict workplace rules they have adopted in recent years and which workers say , make it difficult to take time off.

Agreeing to a new deal would likely help the railways hire more workers, something they are currently struggling to do. Major railroads said they each had to hire hundreds more workers to handle increased demand as the economy recovers and deal with the chronic delays and missed deliveries that have plagued their service this year.

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