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Railroads and labor unions reach tentative deal to avert strike

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  • Railroads and workers’ unions reached a tentative labor agreement early Thursday.
  • The deal averts a national rail strike that threatened to shut a major segment of the U.S. transportation network.
  • The new contracts provide 24% pay increases over five years from 2020 through 2024 and include immediate payouts averaging $11,000 upon ratification, in addition to an extra paid day off for workers.

NEW YORK : Railroads and workers’ unions reached a tentative labor agreement early Thursday to avert a national rail strike that threatened to shut a major segment of the U.S. transportation network.

The last-minute deal avoids massive disruptions to the flow of key goods and commodities around the country. About 40% of the nation’s long-distance trade is moved by rail. If the unions had gone on strike, more than 7,000 trains would have been idled, costing up to an estimated $2 billion per day.

The deadline for an agreement was midnight Friday morning. The parties spent 20 consecutive hours negotiating before reaching a deal.

“The tentative agreement reached tonight is an important win for our economy and the American people,” President Joe Biden said in a statement announcing the deal. “It is a win for tens of thousands of rail workers who worked tirelessly through the pandemic to ensure that America’s families and communities got deliveries of what have kept us going during these difficult years.”

The White House had been in talks with railroad workers’ unions and companies for several months, but negotiations were hung up over unpaid sick time.

Tentative agreements have been reached with the Brotherhood of Locomotive Engineers and Trainmen Division of the International Brotherhood of Teamsters, the International Association of Sheet Metal, Air, Rail and Transportation Workers – Transportation Division, and the Brotherhood of Railroad Signalmen, which collectively represent approximately 60,000 employees, the Association of American Railroads said in a press release.

The new agreement would improve rail workers’ pay and working conditions and give them “peace of mind around their health care costs,” Biden said. He thanked railroad unions and companies for negotiating “in good faith.”

The new contracts provide rail employees with a 24% wage increase during the five-year period from 2020 through 2024, including immediate average payouts of $11,000 upon ratification, according to the Association of American Railroads. The agreement also allows for an extra paid day off for workers, according to a joint statement by the labor unions.

A spokesman for the unions called it a historic win and said the deal paves the way to revisit attendance policies in the future, but cautioned that the tentative agreements are subject to ratification by the unions’ membership. That process that could take at least a week.

“I thank the unions and rail companies for negotiating in good faith and reaching a tentative agreement that will keep our critical rail system working and avoid disruption of our economy,” Biden said in a statement.

Negotiators from railroad carriers and unions had met in Labor Secretary Marty Walsh’s office Wednesday as the sides tried to negotiate a deal ahead of Friday’s strike deadline.

Norfolk Southern and other railroads had been ramping down operations to prioritize critical shipments. The rail company on Thursday said it was working to restore normal operations.

“Our goal from the beginning has been to provide our craft railroaders with pay and benefits that keep them among the highest compensated workers in the nation. We are pleased to have a path forward that accomplishes that goal and lets us get back to the work of running a customer-centric, operations-driven railroad,” Norfolk Southern said in a message to customers.

Union Pacific on Thursday canceled a previously set embargo on certain commodities and said it was working with customers to address backlogs.

Amtrak was also working to restore normal operations. The company on Wednesday announced it would cancel all long-distance trains in anticipation of a strike since many of its railways are maintained by freighters.

Amtrak said Thursday said it expected to fully restore operations by Friday.

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