Biden, unions and railroad leaders fight for deal as shutdown looms

DETROIT/LOS ANGELES, Sept 14 (Reuters) – Biden administration officials held labor contract talks on Wednesday evening to avoid a possible rail shutdown that could disrupt freight shipments and hamper food supplies and fuel, but a small union rejected a deal and Amtrak called it all off. long-distance passenger travel.

Railroads including Union Pacific (UNP.N), Berkshire Hathaway (BRKa.N) BNSF and Norfolk Southern (NSC.N) have until one minute after midnight Friday to strike deals with three holdout unions representing around 60,000 workers before a work stoppage affecting freight and Amtrak could begin.

Talks between the unions and the railroads, which began at 9 a.m., were still ongoing more than 12 hours later after 9 p.m. ET Wednesday at the U.S. Department of Labor headquarters in Washington.

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

“Everyone is going to have to move a bit to get a deal done,” Buttigieg told reporters on the sidelines of the Detroit auto show.

A union representing about 4,900 machinists, mechanics and maintenance workers said on Wednesday its members had voted to reject a tentative agreement.

Railway workers went three years without a raise amid a contract dispute, while rail companies posted strong profits.

In ongoing talks, the industry has proposed annual salary increases from 2020 to 2024, equivalent to a compound hike of 24%. Three of the 12 unions, representing around half of the 115,000 workers involved in the negotiations, are demanding better working conditions.

Two of those 12 unions, representing more than 11,000 workers, have ratified agreements, the National Carriers Conference Committee (NCCC), which negotiates on behalf of the railways, said on Wednesday.

Unions are enjoying renewed public and worker support in the wake of the pandemic, as ‘essential’ employees risked exposure to COVID-19 to keep goods moving and employers reaping big profits, according to labor and business experts.

A shutdown could freeze nearly 30% of U.S. freight shipments by weight, fuel inflation, cost the U.S. economy up to $2 billion a day, and trigger a cascade of transportation problems affecting U.S. sectors of the world. energy, agriculture, manufacturing and retail.

White House spokeswoman Karine Jean-Pierre told reporters aboard Air Force One that a shutdown of the freight rail system would be “an unacceptable outcome for our economy and that the American people and all parties must work to avoid this”.

HIGH STAKES FOR BIDEN

President Joe Biden’s administration has begun developing contingency plans to ensure deliveries of essential goods in the event of a shutdown.

The stakes are high for Biden, who has pledged to rein in soaring consumer costs ahead of the November election that will determine whether his fellow Democrats maintain control of Congress.

“Unless they achieve a breakthrough soon, the railway workers will go on strike this Friday. If you don’t think this will have a negative impact on our economy… think again,” said U.S. Senator John Cornyn, a Republican and spokesman for Biden. .

Senator Bernie Sanders on Wednesday night opposed a Republican bid to unanimously approve legislation to prevent a railroad strike, noting profits made by the railroad industry.

If agreements are not reached, employers could also lock out workers. The railroads and unions could agree to stay at the negotiating table, or the Democratic-led U.S. Congress could step in by extending talks or setting settlement terms. Read more

House Speaker Nancy Pelosi said it was unclear whether Congress would intervene, noting the main issue is a lack of sick leave for workers.

Amtrak, which uses track maintained by freight railroads, said it would cancel all long-distance trips Thursday and some additional state-backed trains. Read more

Railroad hubs in Chicago and Dallas were already congested and suffering from equipment shortages before the contract showdown. These bottlenecks delay cargo in US seaports for up to a month. And, once freight arrives at rail hubs in places like Chicago, Dallas, Kansas City and Memphis, Tennessee, it can wait another month or more.

Package delivery company United Parcel Service (UPS.N), one of the biggest US rail customers, and US seaports said they were working on contingency plans.

Meanwhile, factory owners worry about machinery idling while automakers fear a shutdown could extend wait times for vehicle buyers. Elsewhere, food and energy companies are warning that further service disruptions could create even steeper price hikes.

Reporting by David Shepardson and Lisa Baertlein; Additional reporting by Jeff Mason aboard Air Force One; Joe White in Detroit; Chris Walljasper in Chicago and Abhijith Ganavaram in Bangalore; Editing by Will Dunham, Jonathan Oatis, Bill Berkrot and Michael Perry

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