Biden, unions and railroad executives struggle to bargain as shutdown approaches

DETROIT/LAS ANGELES (Reuters) – Biden administration officials hosted labor contract talks late Wednesday to avert a potential rail shutdown that could disrupt freight deliveries and hamper food and fuel supplies, but one small union rejected the deal and Amtrak canceled everyone. Long-distance passenger flights.

Railroads including Union Pacific (UNP.N)Berkshire Hathaway, (BRKa.N) BNSF and Southern Norfolk (NSC.N) They have a minute after midnight Friday to reach deals with three dismissive unions representing about 60,000 workers before a business shutdown affecting shipping can start Amtrak.

Talks between labor unions and the railroad, which began at 9 a.m., were still underway more than 12 hours after 9 p.m. ET on Wednesday at the US Department of Labor headquarters in Washington.

The talks are being overseen by Labor Secretary Marty Walsh, with input from other US officials. The parties ordered Italian food for dinner on Wednesday in order to continue discussions.

“Everyone is going to have to move a little bit in order to come to an agreement,” Buttigieg told reporters on the sidelines of the Detroit Auto Show.

A union representing about 4,900 mechanics, mechanics and maintenance workers said on Wednesday that its members had voted to reject an initial agreement.

Railroad workers spent three years without a bonus increase amid a contract dispute, while rail companies posted solid profits.

In current conversations, the industry has offered annual wage increases from 2020 to 2024, equivalent to a twofold increase of 24%. Three unions out of the 12, representing about half of the 115 thousand workers affected by the negotiations, are demanding better working conditions.

The NCCC, which negotiates on behalf of the railroad, said Wednesday that two of those 12 unions, which represent more than 11,000 workers, have approved the deals.

Unions are enjoying a wave of public support and workers in the wake of the pandemic, when “essential” employees risked exposure to COVID-19 to keep goods moving, and employers reaped huge profits, labor and business experts say.

The shutdown could freeze nearly 30% of US cargo shipments by weight, stoke inflation, cost the US economy up to $2 billion a day and set off a series of transportation problems affecting the US energy, agriculture, manufacturing and retail sectors.

White House spokeswoman Karen-Jean-Pierre told reporters aboard Air Force One that shutting down the freight rail system would be an “unacceptable outcome for our economy and the American people, and all parties must act to avoid it.”

Big gains for Biden

The administration of President Joe Biden has begun developing contingency plans to ensure that critical goods are delivered in the event of a shutdown.

The stakes are high for Biden, who has vowed to rein in rising consumer costs ahead of the November elections that will determine whether fellow Democrats retain control of Congress.

US Senator John Cornyn, a Republican and Biden critic, said: “Unless they find a breakthrough soon, railroad workers will strike on Friday. If you don’t think that’s going to have a negative impact on our economy…Think again.” .

Senator Bernie Sanders late Wednesday vetoed Republicans’ attempt to unanimously pass legislation to prevent a rail strike, citing profits made by the rail industry.

If agreements are not reached, employers can also fire workers. Railroads and unions may agree to remain at the negotiating table, or the Democratic-led US Congress can intervene by extending the talks or setting the terms of a settlement. Read more

It was unclear whether Congress would intervene, House Speaker Nancy Pelosi said, noting that the main issue is workers not getting sick leave.

Amtrak, which uses routes maintained by railroads for freight, said it would cancel all long-haul flights Thursday and some additional state-subsidized trains. Read more

Rail hubs in Chicago and Dallas were already clogged and experiencing equipment shortages before facing the contract. These bottlenecks support shipments at US seaports by up to a month. Once the goods reach railroad hubs in locations like Chicago, Dallas, Kansas City, and Memphis, Tennessee, it can take another month or longer.

United Parcel Service Co. (UPS.N)one of the largest US rail customers, and US seaports said they are working on contingency plans.

Meanwhile, factory owners are concerned about idle machines while automakers fear the shutdown will lengthen waiting times for vehicle buyers. Elsewhere, food and energy companies are warning that additional disruptions to service could lead to sharp price hikes.

Additional reporting by David Shepardson and Lisa Bertlin. Additional reporting by Jeff Mason on Air Force One. Joe White in Detroit; Chris and Jasper from Chicago and Abhijith Ganabavaram in Bengaluru; Editing by Will Dunham, Jonathan Otis, Bill Bercrot and Michael Berry

Our criteria: Thomson Reuters Trust Principles.