Members of one union rejected a tentative deal with the largest U.S. freight railroads Wednesday, while two ratified agreements and three others remained at the bargaining table just days ahead of a strike deadline, threatening to intensify snarls in the nation’s supply chain that have contributed to rising prices.
About 4,900 members of the International Association of Machinists and Aerospace Workers District 19 voted to reject the tentative agreement negotiated by IAM leadership with the railroads, the union said Wednesday. But the IAM agreed to delay any strike by its members until Sept. 29 to allow more time for negotiations and to allow other unions to vote.
Railroads are trying to reach an agreement with all their other unions to avert a strike before Friday’s deadline. The unions aren’t allowed to strike before Friday under the federal law that governs railroad contract talks, which include BNSF, Union Pacific, Norfolk Southern, CSX, Kansas City Southern and the U.S. operations of Canadian National.
Government officials and a variety of businesses are bracing for the possibility of a nationwide rail strike that would paralyze shipments of everything from crude and clothing to cars, a potential calamity for businesses that have struggled for more than two years due to COVID-19 related supply chain breakdowns.
There are 12 unions — one with two separate divisions — representing 115,000 workers that must agree to the tentative deals and then have members vote on whether to approve them. So far, nine had agreed to tentative deals and three others are still at the bargaining table.
Of the nine that agreed to the deals, two — the Transportation Communications Union and the Brotherhood of Railway Carmen unions — voted to ratify their contracts Wednesday. But IAM members voted to reject their deal. Votes by the other six unions that approved tentative deals are pending.
All the tentative deals are based closely on the recommendations of a Presidential Emergency Board Joe Biden appointed this summer that called for 24% raises and $5,000 in bonuses in a five-year deal that’s retroactive to 2020. Those recommendations also includes one additional paid leave day a year and higher health insurance costs.
The key unions that represent the conductors and engineers who drive trains are holding out in the hope that railroads will agree to go beyond those recommendations and address some of their concerns about unpredictable schedules and strict attendance policies that they say make it difficult to take any time off. They say the job cuts major railroads have made over the past six years — eliminating nearly one-third of their workers — have made a difficult job ever harder although the railroads maintain their operations have just become more efficient as they rely on fewer, longer trains.
The unions want the railroads to provide unpaid leave time that workers could use to attend doctors appointments or attend to other personal business without being penalized.
Ron Kaminkow, general secretary of the Railroad Workers United labor group that includes workers from all the rail unions, said he left the freight industry for an Amtrak engineer job in Nevada years ago because of the grueling working conditions that have only gotten worse in recent years. He’s seen many other workers make that switch even though it often comes with lower pay and means giving up seniority.
“Everyone knows you can get more money in the freight industry. But it’s what we would call blood money,” Kaminkow said. “It’s almost impossible to predict when you are going to be off and when you can attend to various life issues like family, like children, like an appointment.”
Contract talks continued Wednesday with Labor Secretary Marty Walsh participating again to put pressure on both sides to reach a deal before Friday’s deadline.
Transportation Secretary Pete Buttigieg told reporters at the Detroit auto show Wednesday that the Biden administration remains focused on preventing a strike. Biden himself made calls earlier this week, but the administration is preparing to respond if a walkout does happen.
“We’ve been engaging with the parties, and our message continues to be that the labor unions and railroads need to find the deal space to avoid any kind of disruption,” he said. “The most important thing is to try to prevent that from happening in the first place.”
If the two sides can’t agree, Congress could step in to block a strike and impose terms on the railroads and unions, but it wasn’t clear Wednesday how quickly they could or would act because Democrats and Republicans can’t readily agree on a solution. A number of business groups have written letters to lawmakers over the past week urging them to be prepared to step in because of their concerns that a rail strike would be what the Business Roundtable called an “economic catastrophe.”
With the midterm elections just weeks away, politics will play a role if Congress has to settle this dispute. Democrats are wary of becoming crosswise with their allies in organized labor, as unions tend to be strong supporters in elections. At the same time, Republicans see an opportunity to put pressure on Biden and his party if the railroads teeter toward a strike. But it’s entirely possible that all sides would be blamed for a rail shutdown.
The many businesses that rely on railroads to deliver their raw materials and finished products say a rail strike would cause significant problems particularly for oil refineries, chemical businesses, auto makers, retailers and agricultural groups. The Association of American Railroads trade group estimated that a strike would cost the economy more than $2 billion a day.
Businesses would likely try to turn to trucks and other modes of shipping if the railroads do shut down, but there isn’t enough trucking capacity to take up all the slack. The railroad trade group estimated that 467,000 additional trucks a day would be required to deliver everything railroads handle now.
A freight rail strike would also disrupt passenger traffic because Amtrak and many commuter railroads operate on tracks owned by the freight railroads. Amtrak has already canceled a number of its long-distance trains this week, and it said the rest of its long-distance trains would stop Thursday ahead of the strike deadline.
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