U.S. rail strike averted, ending threat to auto shipments
Photo credit: David Patch
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WASHINGTON (Bloomberg) -- Freight railroads won new labor agreements with two unions, averting a strike in the holiday shipping season and a disruption of auto shipments.
Seven auto-industry trade groups, including the Alliance of Automobile Manufacturers, had called on Congress Thursday to stave off a strike. U.S. lawmakers said they were prepared to intervene in the dispute. The Washington-based Alliance includes Ford Motor Co. and Chrysler Group LLC as members.
The Brotherhood of Locomotive Engineers and Trainmen and the American Train Dispatchers Association, representing 26,500 workers, reached tentative accords, the National Railway Labor Conference, a Washington-based group that bargains on behalf of railroads, said in an e-mailed statement last night.
Winning the contract agreements ended the threat of a walkout that could have occurred as soon as Dec. 6, the Association of American Railroads trade group said in a statement. Another union, the Brotherhood of Maintenance of Way Employes, extended a "cooling off" period to Feb. 8.
The House was ready to vote on legislation to prevent a "job-crushing railway labor strike," House Speaker John Boehner, an Ohio Republican, said Thursday before the union accords. A freight-rail work stoppage would have cost the U.S. economy about $2 billion a day, the Washington-based AAR said.
"I applaud all the stakeholders who worked to avert a work stoppage that would have hurt our nation's economy just as the holiday season gets underway," Senate Majority Leader Harry Reid, a Nevada Democrat, said in an e-mailed statement. "It is Congress' constitutional duty to ensure the unfettered flow of interstate commerce, and to protect the nation's economic well being."
The agreements call for raises of more than 20 percent over six years, A. Kenneth Gradia, a labor conference official, said in the group's statement.
Two ratified
Ten unions have tentative deals and two have ratified agreements. The maintenance-employees group said this week it plans to bargain into February. It speaks for 25,100 workers who build and maintain tracks, according to the labor conference.
Talks among 30 freight railroads, including Union Pacific Corp. and Warren Buffett's Burlington Northern Santa Fe, and unions representing 132,000 workers broke down in September after almost two years, triggering a 90-day strike ban under U.S. law.
Railroads carry 43 percent of the freight volume moved between cities, according to the railroad association. House transportation committee Chairman John Mica, a Florida Republican, and Senator Mike Enzi, a Wyoming Republican, on Nov. 30 proposed adopting the recommendations of a board President Barack Obama appointed in October to resolve the dispute.
Reid made a similar proposal and added one to extend the Dec. 6 bargaining deadline until Feb. 8. U.S. business groups urged Congress to prevent a strike if the companies and unions didn't resolve the dispute.
Congressional intervention
"We are not thrilled with Congress getting involved in settling labor disputes," Alex Herrgott, director of transportation and infrastructure for the U.S. Chamber of Commerce, said in an interview. "But we're more concerned about losing $2 billion a day without intervention."
One-third of U.S. exports and 70 percent of coal shipments travel by rail, Herrgott said in an e-mail.
A strike during the U.S. holiday shipping season could be "devastating," said Matthew Shay, president of the National Retail Federation, a Washington-based trade group.
