Jawboning Intensifies Ahead of Rail Stoppage

With a potential national railroad strike and/or lockout a week away, a war of words has ensured in various quarters ahead of the Sept. 16 expiration of a 30-day cooling off period.

The Association of American Railroads said this week that a railroad stoppage could cost the U.S. economy more than $2 billion a day.

In a related development, U.S. Labor Secretary Marty Walsh has joined negotiations being supervised by the National Mediation Board with eight railroad unions that have not yet reached tentative agreements.

One report indicated that Walsh told both sides they should avoid messing with the nation’s fragile economy weeks ahead of elections because neither Congress nor the Biden Administration will like it.

He reportedly warned the two sides that they should not expect Congress to act to head off a railroad stoppage by approving a settlement or extending negotiations.

Five of the 12 railroad labor unions have reached tentative agreements with the National Carriers Conference Committee, which represents railroad management in labor contract negotiations.

The AAR report said a work stoppage would halt more than 7,000 trains a day and “trigger retail product shortages, widespread manufacturing shutdowns, job losses and disruptions to hundreds of thousands of passenger rail customers.”

The $2 billion impact of a work stoppage on the economy was an update of a 1992 Federal Railroad Administration econometric study to quantify the potential effects of a national rail shutdown on employment and economic output.

Railroad executives fear that a work stoppage could lead some shippers to use other modes of transportation to move freight and some of that lost business might not return to the rails.

The AAR report said that Congress might have to intervene to avert a work stoppage if negotiations fail to resolve the matter.

Some industry observers have suggested that as the Sept. 16 deadline approaches, the parties in the negotiations might voluntarily extend the deadline.

The cooling off period by federal law began upon the Aug. 16 release of the recommendations of a presidential emergency board, which was appointed by President Joseph Biden earlier this summer.

The recommendations of the PEB are not binding on the parties to the negotiations.

An analysis published on the website of Railway Age noted that one factor favoring giving negotiations more time is “outside political duress and internal financial pressure on all stakeholders, which serves to refocus reasonable minds and chill wonderfully even the most pugnacious of negotiators.”

The Railway Age report, though, said that the NCCC indicated on Thursday that railroad management is reluctant to extend the negotiating period in light of how five unions agreeing to tentative contract has set a pattern.

Any tentative contract agreements must be ratified by union members.

Union leadership has been hinting that a strike could strain the finances of the unions if they have to pay their members strike benefits that could exceed $12 million a day.

Some union members have been actively calling for a strike and may be underestimating how much it could cost them.

Strike benefits provide at best a fraction of what workers earn through regular wages and benefits.

Unions have told their members recently that during a strike they could expect no more than $100 a day in strike benefits and $1,200 maximum per month.

Strike benefits would not be paid for the first three days of a strike.

A memo sent to members of the SMART Transportation Division said the cost of paying its 37,000 members strike benefits would be more than $3.7 million per day.

SMART-TD leadership warned that strike benefits could be suspended if needed to protect the financial interests of the union.

Union workers who are away from home when a strike begins would face having to make their own arrangements to return home.

If carriers cut off health care benefits during a strike, workers would be faced with doing without health care insurance for the duration of a work stoppage or having to pay thousands of dollars a month to buy insurance at market rates.

In the meantime the website Politico.com said some of the eight unions still at the bargaining table have reached tentative agreements with the NCCC, but those have yet to be announced.

The Politico report said the unions representing locomotive engineers and conductors and the NCCC continue to be at stalemate over certain issues, including following the terms of agreements reached with the NCCC by other unions.

Leaders of T&E unions said their members have “borne the brunt of inept crew management, life-changing attendance policies, and working conditions over the past years that are making it all but impossible for rail carriers to hire and retain operating employees.”

The leaders of the SMART-TD and the Brotherhood of Locomotive Engineers and Trainmen called on Congress to stay out of the dispute.

“We are confident that the rail carriers will move from their current positions and settle with their employees in a fashion that could be ratified,” if Congress remains on the sidelines, the union leadership said.

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