Railroads, unions reach agreement

   The United States avoided a damaging railroad shutdown that would have disrupted shipments of autos, consumer goods, agricultural products, raw materials and other materials after the nation’s freight railroads Thursday night reached a tentative agreement with two holdout unions on a new labor deal, and agreed to extend negotiations with one remaining union.
   The Association of American Railroads announced that the rail industry had agreed to terms for a new contract with the Brotherhood of Locomotive Engineers and Trainmen (BLET) and the American Train Dispatchers Association, and that talks will continue through Feb. 8 with the Brotherhood of Maintenance of Way Employees.
   Details of the agreements were not disclosed, but BLET President Dennis R. Pierce said in an online message to members that the wage terms “are reasonable” and on par with the 2007 contract. The arrangement also mitigates many of the health and welfare concessions that railroads were seeking, he said. The result, he added, was better than having terms dictated by Congress that would have imposed more severe benefit cuts proposed by a federal panel.
   During the negotiations, the railroads claimed that unless rising health care costs were addressed they would have to pay as much as $3 billion for medical, dental and vision benefits for employees and their families, tripling their cost per employee since 1999.
   The deal must still be ratified by rank-and-file union members.  
   Auto manufacturers, retailers and other freight rail users had increased pressure in recent days for swift federal action to avert cancelation of rail service next week that could impair their ability to conduct business.
   Labor and railroad negotiators were operating under a Dec. 6 deadline to reach an agreement on a new contract. After 12:01 a.m. that day both sides would be allowed to take matters into their own hands, which could have resulted in a lockout or strike that shut down rail operations. Passenger railroads that operate on freight lines could also have been effected.

Obama

   President Barack Obama appointed a Presidential Emergency Board PEB on Oct. 7 to investigate the dispute between railroads represented by the National Carriers’ Conference Committee and 13 unions, represented by the National Railway Labor Conference, after a year of unsuccessful talks brokered by the National Mediation Board. 
   On Thursday a coalition of auto industry groups and the voice of the port industry followed earlier calls by the the Retail Leaders Industry Association and the National Industrial Transportation League for Congress to impose contract terms recommended by the PEB a month ago as the basis for a possible settlement. 
   Earlier last month the PEB offered recommendations on contract terms that could serve as a settlement between the Class I railroads as represented by the National Carriers’ Conference Committee and rail labor. A 30-day statutory cooling off period ends Dec. 6. On Wednesday evening, Rep. John Mica, chairman of the House Transportation and Infrastructure Committee, submitted legislation to resolve the labor dispute by implenting the PEB terms.
   Shippers and rail carriers said a rail stoppage would cost the economy $2 billion per day – equal to about 5 percent of daily Gross Domestic Product and worse than the average quarterly decline during the recession.
   “Rail is an essential component of the automotive industry’s national supply chain. Automanufacturers ship tens of thousands of vehicles daily in North America, primarily on U.S.railroads,” the seven auto manufacturers, dealers and equipment makers said in a letter to House and Senate leaders. “A strike, or partial strike, would limit the ability of auto manufacturers to move components to plants to enable assembly, and stop shipment of finished vehicles. Production at assembly plants and independent parts manufacturers throughout the country would be impacted immediately and inventory at dealers nationwide would quickly become constrained. Extended production shut downs would come at precisely the worst time and reverse the recovery in one of the few bright spots in a fragile U.S. economy.”
   Ten of 13 unions that represent rail workers previously agreed to new labor deals, but without agreement from all collective bargaining units a railroad shutdown was considered likely. The United Transportation Union, the largest railroad union with 40,000 members, was one of those that has reached an early agreement. Last week, the major freight railroads agreed with the Brotherhood of Maintenance of Way Employees to continue talks until February. The offer was not accepted by the two other unions that have not yet reached a settlement, accelerating fears of a shutdown.
   “We’re pleased that we have now settled with 12 of the 13 unions in this bargaining round. Everyone wins when we reach voluntary agreements,” Kenneth Gradia, chairman of the National Carriers’ Conference Committee, said in a written statement. “In a tough economy, these agreements offer a terrific deal for rail employees. They lock in well-above market wage increases of more than 20 percent over six years, far exceeding recent union settlements in other industries.”    
   A shutdown of the nation’s railways would be economically devastating to the country,” Mica said in a written statement.  “If this issue cannot be resolved by the parties involved, Congress must act to ensure there will be no shutdown of this critical component of the nation’s transportation system and the economy.”
   RILA warned that a rail stoppage would hurt its members’ efforts to get merchandise to stores during the critical holiday shopping season, raising the prospect that shippers will have to shift to truck transport at a time when the shippers are already experiencing tight capacity in the trucking industry.
   The retail association asked President Obama Thursday to use his influence on Capitol Hill to win passage of legislation resolving the dispute before a work stoppage begins.
   The American Association of Port Authorities also wrote congressional leaders to uphold their constitutional responsibility to protect interstate commerce, adding that railraods play a critical role moving imports and exports to and from seaports.  — Eric Kulisch