Railroads, unions avoid strike that threatened car deliveries

U.S. railroad companies and unions representing more than 100,000 workers reached a tentative agreement, the government said, a breakthrough that looks to avert a labor disruption that risked adding supply-chain strains to the world’s largest economy.

A strike would have created major logistical problems for car shipments and auto parts suppliers.

“Following 20 consecutive hours of negotiations at the Department of Labor, rail companies and union negotiators came to a tentative agreement that balances the needs of workers, businesses, and our nation’s economy,” according to a Labor Department statement early Thursday.

It was a “hard-fought, mutually beneficial deal,” the statement said. “Our rail system is integral to our supply chain, and a disruption would have had catastrophic impacts on industries, travelers and families across the country.”

The tentative resolution was announced just a day before a Friday deadline that could have seen rail workers walk off the job or be locked out by the companies, freezing critical infrastructure that transports about 40 percent of all long-haul cargo in the U.S. and threatening a fresh wave of supply chain chaos.

The breakthrough to cap day-and-night negotiations came after a Biden-appointed board last month issued a set of recommendations to resolve the dispute, including wage increases and better health coverage.

That proposal did not include terms on scheduling, attendance and other issues important to two major unions that held out of a deal accepted by others: affiliates of the Teamsters union and of the International Association of Sheet Metal, Air, Rail and Transportation Workers.