Biden, unions, rail executives scramble for deal as shutdown looms

Biden, unions, rail executives scramble for deal as shutdown looms
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DETROIT/LOS ANGELES, Sept 14 (Reuters) – Biden administration officials held labor contract talks late on Wednesday to avert a possible rail shutdown that could disrupt cargo shipments and disrupt food and fuel supplies, but a small union rejected a deal and Amtrak canceled all. Long distance passenger travel.

Railroad with Union Pacific (UNP.N)Berkshire Hathaway (BRKa.N) BNSF and Norfolk Southern (NSC.N) Three holdout unions representing about 60,000 workers had until a minute after midnight Friday to reach an agreement before a work stoppage that could affect freight and Amtrak.

More than 12 hours of negotiations between labor unions and the railroad have been underway since 9 p.m. Wednesday at the U.S. Labor Department headquarters in Washington.

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Labor Secretary Marty Walsh is overseeing the negotiations, with input from other US officials. The teams ordered Italian food for dinner on Wednesday to continue the discussion.

“Everybody has to move a little bit to get a deal done,” he told reporters on the sidelines of the Detroit auto show.

A union representing about 4,900 machinists, mechanics and maintenance workers said Wednesday that its members had voted to reject a tentative contract.

Rail workers have gone three years without a contract extension, while rail companies have disputed strong profits.

In the current negotiations, the industry has proposed annual wage increases from 2020 to 2024, which equates to a 24% compound increase. Three of the 12 unions, representing about half of the 115,000 workers affected by the talks, are asking for better working conditions.

Two of those 12 unions representing more than 11,000 workers approved the contract, the National Carriers Conference Committee (NCCC), which is negotiating on behalf of the railroad, said Wednesday.

Unions are enjoying a surge of public and worker support in the wake of the pandemic, when “essential” employees risked COVID-19 exposure to keep products running and employers reaped huge profits, labor and corporate experts said.

A shutdown could freeze about 30% of US cargo shipments by weight, raise inflation, cost the US economy as much as $2 billion a day and unleash a cascade of transportation problems affecting the US energy, agriculture, manufacturing and retail sectors.

White House spokeswoman Karin Jean-Pierre told reporters aboard Air Force One that shutting down the freight rail system was an “unacceptable outcome for our economy and one that the American people and all parties must work to avoid.”

Stocks high for Biden

President Joe Biden’s administration has begun developing contingency plans to ensure supplies of critical goods in the event of a shutdown.

The stakes are high for Biden, who has pledged to rein in rising consumer spending ahead of a November election that will determine whether his fellow Democrats retain control of Congress.

“If they don’t get a breakthrough soon, rail workers will go on strike this Friday. If you don’t think this is going to have a negative impact on our economy… think again,” said US Senator John Cornyn, a Republican and Biden critic. John Cornyn, a Republican, and Biden. .

Senator Bernie Sanders late Wednesday objected to a Republican bid to unanimously approve legislation to prevent rail strikes, citing rail industry profits.

If an agreement is not reached, employers can also lock out workers. Railroads and unions could agree to stay at the bargaining table, or the Democratic-led U.S. Congress could intervene by extending negotiations or establishing settlement terms. Read more

House of Representatives Speaker Nancy Pelosi said it was unclear whether Congress would act, noting that the main issue was the lack of sick leave for workers.

Amtrak, which uses tracks maintained by the freight railroad, said it would cancel all long-distance trips and some additional state-supported trains Thursday. Read more

Rail hubs in Chicago and Dallas were already gridlocked and suffering equipment shortages before the contract showdown. These disruptions are backing up cargo at US seaports for as much as a month. And, once cargo reaches rail hubs in places like Chicago, Dallas, Kansas City and Memphis, Tennessee, it can sit for another month or more.

Package delivery company United Parcel Service (UPS.N)One of the largest US rail customers, and US seaports said they were working on contingency plans

Meanwhile, factory owners worry about idling machinery while automakers worry that shutdowns could increase wait times for car buyers. Elsewhere, food and energy companies warn that additional service disruptions could lead to sharper price increases.

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Reporting by David Shepardson and Lisa Bertlin; Additional reporting by Jeff Mason on Air Force One; Joe White in Detroit; Chris Waljasper in Chicago and Abhijith Ganapavaram in Bangalore; Editing by Will Dunham, Jonathan Otis, Bill Berkrot and Michael Perry

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