US supply chain under threat as railroad union rejects contract, raising possibility of strike

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OMAHA, Neb. – Railway engineers accepted their deal with the railways which will offer 24% raises, but conductors rejected theirs, threatening the health of the economy just before the holidays and casting more doubt on the industry’s ability to resolve the labor dispute by next month’s deadline without help from Congress.

Even the threat of a work stoppage could entangle the nation’s supply chain, as railroads will freeze shipments of chemicals and other goods that could create hazards if halted mid-stream. their destination.

A split vote Monday from the two largest railroad unions follows the rejection by three other unions of their deals with the railroads that the Biden administration helped negotiate before an initial strike deadline in September. Seven smaller unions approved the five-year deal which, in addition to the 24% increase, includes $5,000 in bonuses.

But many union members voted to reject the contracts because, they say, they fail to take into account the demanding schedules and quality-of-life issues of employees.

All 12 must approve contracts to prevent a strike that could cripple supply chains and hamper a stressed US economy still emerging from the pandemic.

The Retail Industry Leaders Association said a railroad strike would “tremendously disrupt the flow of goods across the country”, although retail stores are well stocked for the crucial holiday shopping season.

“Fortunately, this year’s holiday gifts have already landed on store shelves. But a disruption in rail transportation poses a significant challenge to the on-time delivery of items such as perishable food products and e-commerce shipments, and it will no doubt add to the inflationary pressures already plaguing the U.S. economy.” said Jess Dankert of the group which represents more than 200 major retailers.

Unions that rejected their agreements have agreed to return to the negotiating table to try to hammer out a new deal before a new strike deadline early next month. But those talks have stalled because the railroads refuse to consider adding paid sick leave to what was already offered.

It seems increasingly likely that Congress will have to step in to settle the dispute. Legislators have the power to impose contract terms if the two parties fail to reach an agreement. Hundreds of business groups have urged Congress and President Joe Biden to be ready to intervene if necessary.

Workers frustrated with demanding schedules and significant job cuts in the industry have pushed to reject these contracts because they do not address workers’ key quality of life concerns. The agreements for engineers and conductors included a promise to try to improve the scheduling of regular days off and to further negotiate the details of these schedules at each railway. Unions that represent engineers and drivers have also been given three unpaid days off a year to meet medical needs, provided they are scheduled at least 30 days in advance.

The railways also lost their offer to reduce crew sizes to one person as part of the negotiations. But conductors from the transport division of the International Association of Sheet Metal, Air, Rail and Transport Workers still narrowly rejected the deal with around 51% voting against. A smaller division of the SMART-TD union which represents about 1,300 yardmasters endorsed the deal.

“The ball is now in the railways’ court. Let’s see what they do. They can settle this at the bargaining table,” said SMART-TD President Jeremy Ferguson. “But, railroad executives who constantly complain about government interference and regularly nasty regulators and Congress now want Congress to do the negotiating for them.”

The railroads argue that agreements with unions should closely follow recommendations made this summer by a special panel of arbitrators appointed by Biden. That’s part of the reason they don’t want to offer paid sick leave. Additionally, the railroads say unions have agreed over the years to forego paid sick leave in favor of higher pay and strong short-term disability benefits.

Unions say it’s high time the railroads offered paid sick leave to workers, and the pandemic has underscored the need.

The group that bargains on behalf of the railroads said on Monday that unions that rejected their deals should not expect to receive more than the Presidential Emergency Board of Arbitrators has recommended. The National Carriers Conference Committee says businesses could start to be hit by the threat of a strike even before the deadline, as railroads begin to cut shipments of hazardous chemicals and perishable goods a few days before the deadline.

“A national railway strike would have serious repercussions on the economy and the public. Now, the continued, near-term threat of one will require freight railways and passenger carriers to soon begin to take responsible action to secure the network safely ahead of any deadline,” the railways said. iron.

It’s unclear what Congress might do given the deep political divisions in Washington DC and a single lawmaker could delay a resolution. But Association of American Railroads trade group chief Ian Jefferies said “if the remaining unions don’t accept a deal, Congress should be prepared to act and avert a disastrous $2 billion hit.” a day for our economy”.

Republicans may try to force through a deal that includes only what the Emergency Presidential Council has recommended, while Democrats who still tightly control the House and Senate during this lame time may be willing to force the paths of iron to make further concessions.

The unions who voted Monday represent more than half of the roughly 115,000 railroad workers involved in the contract dispute with Union Pacific, Norfolk Southern, BNSF, Kansas City Southern, CSX and other railroads.

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