US railroads, unions reach tentative pact on eve of deadline

US railroads and unions representing more than 100,000 workers reached a tentative deal, the government said, a breakthrough that looks to avert a labour disruption that risked adding supply chain strains to the world’s largest economy.

After 20 straight hours of talks, the companies and union negotiators reached a tentative agreement balancing the needs of workers, businesses and the economy, according to a Labor Department statement early on Thursday (Sep 15).

It was a “hard-fought, mutually beneficial deal”, the statement said. “Our rail system is integral to our supply chain, and a disruption would have had catastrophic impacts on industries, travellers and families across the country.”

The deal extends the so-called cooling off period, during which the 2 sides have been negotiating, until union members can ratify it, an administration official said.

Aside from the disruption to key freight from corn to cars, the prospect of a strike put US President Joe Biden in a political bind: push explicitly for a deal and risk undermining his pro-union campaign promises, or side with labour during a strike and risk getting blamed for hurting an economy beset with soaring inflation and supply chain snarls.

“These rail workers will get better pay, improved working conditions and peace of mind around their health care costs: all hard-earned,” Biden said in a statement.

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The tentative resolution was announced a day before a Friday deadline that could have seen rail workers walk off the job or be locked out by the companies, freezing critical infrastructure that transports about 40 per cent of all long-haul cargo in the US and threatening a fresh wave of supply chain chaos.

The breakthrough to cap day-and-night negotiations came after a Biden-appointed board last month issued a set of recommendations to resolve the dispute, including wage increases and better health coverage.

That proposal did not include terms on scheduling, attendance and other issues important to 2 major unions that held out of a deal accepted by others: affiliates of the Teamsters union and of the International Association of Sheet Metal, Air, Rail and Transportation Workers. BLOOMBERG