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Factbox-Last-minute deal by U.S. railroads, unions shifts focus to road ahead

Stock Markets Sep 15, 2022 03:55PM ET
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© Reuters. FILE PHOTO: A cargo train is seen near the border between the U.S. and Mexico, in Laredo, Texas U.S. June 3, 2019. REUTERS/Carlos Jasso/File Photo
 
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(Reuters) - Major U.S. freight railroads and unions representing 115,000 workers secured a tentative deal after 20 hours of intense talks brokered by the Biden administration to avert a shutdown.

A stoppage would have been a major hit to the U.S. economy already grappling with high inflation, a labor shortage and supply-chain disruptions.

The tentative deal between the National Carriers' Conference Committee (NCCC), which represented the railroads, and unions was announced by President Joe Biden on Thursday.

Here are some details about the agreement, a brief timeline and what lies ahead:

WHAT THE AGREEMENT CONTAINS?

The tentative agreement as announced by two unions calls for an immediate wage increase of 14% once compounded, with an additional 4% increase on July 1, 2023, and a 4.5% increase on July 1, 2024.

The deal also includes annual lump-sum bonus payments totaling $5,000, said the Brotherhood of Locomotive Engineers and Trainmen and the International Association of Sheet Metal, Air, Rail, and Transportation Workers.

HOW LONG DID THE NEGOTIATIONS LAST?

Negotiations between the companies and a dozen unions had stretched for more than two years.

WHO WERE THE PARTIES INVOLVED?

The NCCC represented railroads including Berkshire Hathaway (NYSE:BRKa)'s BNSF, CSX Corp (NASDAQ:CSX), Kansas City Southern (NYSE:KSU), Norfolk Southern (NYSE:NSC) and Union Pacific Corp (NYSE:UNP).

The committee was locked in negotiations with the following 12 unions:

1) Transportation Communications Union/IAM.

2) Brotherhood of Railway Carmen.

3) International Association of Machinists and Aerospace Workers.

4) International Brotherhood of Electrical Workers.

5) American Train Dispatchers Association.

6) Brotherhood of Maintenance of Way Employees Division of the International Brotherhood of Teamsters.

7) International Brotherhood of Boilermakers.

8) International Association of Sheet Metal, Air, Rail and Transportation Workers – Mechanical Department.

9) National Conference of Firemen & Oilers, SEIU.

10) Brotherhood of Locomotive Engineers and Trainmen Division of the International Brotherhood of Teamsters.

11) International Association of Sheet Metal, Air, Rail and Transportation Workers – Transportation Division.

12) Brotherhood of Railroad Signalmen.

WHAT WAS THE DEADLINE FOR A DEAL?

The parties had until a minute after midnight on Friday to reach an agreement.

WHAT WAS THE MAIN POINT OF CONTENTION BETWEEN RAILROAD WORKERS AND COMPANIES?

Dispute involved pay and working conditions. Unions were pushing back on work rules that would require employees to be on-call and available to work most days.

WHAT WOULD HAVE HAPPENED IF NO AGREEMENT WAS REACHED?

A rail shutdown could have frozen almost 30% of U.S. cargo shipments by weight, stoked inflation, cost the economy as much as $2 billion per day and unleashed a cascade of transport woes affecting the country's energy, agriculture, manufacturing, healthcare and retail sectors.

The impact would have stretched beyond U.S. borders because trains link the United States to Canada and Mexico and provide vital connections to massive ships that ferry goods from around the globe.

WHAT WAS THE ROLE OF WHITE HOUSE?

With talks at an impasse, Biden in July signed an executive order creating an emergency board to help resolve the dispute.

Work stoppages are prohibited for 30 days following the issuance of the presidential emergency board (PEB) report to give the two sides time to reach a voluntary settlement. If employers or unions reject the board's recommendations, Congress can intervene.

With the deadline approaching, officials hosted labor contract talks into the night on Wednesday.

Biden himself called Labor Secretary Marty Walsh and negotiators around 9 p.m. on Wednesday and told them "once again to recognize the harm" that the failure to reach a deal would have on families, farmers and businesses, Reuters reported.

On Thursday, Biden hailed the deal as "an important win for our economy and the American people."

WHAT HAPPENS NEXT?

The unions will now put the deal to a vote by their members, who can reject the agreement. Two unions - Transportation Communications Union/IAM and the Brotherhood of Railway Carmen - have ratified the deal. Another union's members have rejected the deal.

Factbox-Last-minute deal by U.S. railroads, unions shifts focus to road ahead
 

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