Update (1056ET):
President Biden is expected to deliver remarks around 1100 ET on the tentative railway labor agreement reached by rail freight companies and labor unions, averting a supply chain disaster ahead of the pivotal midterm elections.
The Biden administration was locked in “20 consecutive hours” of discussions with railroads and unions to resolve the labor dispute.
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Update (0908ET):
CBS News Kris Van Cleave sheds more light on the tentative deal by railroads and unions to avoid a strike Friday.
“There is a tentative deal to avoid a rail strike. Railroads say tentative agreements include a 24% wage increase during over by 2024 — w/14.1% bump effective immediately — and 5 annual $1,000 bonuses. Unions get their sick time demand. Deal followed a 20 hour negotiating session,” Van Cleave tweeted.
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Update (0751ET):
WSJ noted the White House didn’t provide details of the tentative agreement between freight rail companies and unions.
The latest headlines show the tentative agreement goes back to unions for a vote:
- RAIL PARTIES AGREE TO COOLING OFF PERIOD AS PART OF DEAL, A STANDARD PART OF RATIFICATION PROCESS IN CASE VOTE FAILS IN ORDER TO AVERT ANY SHUTDOWN -SOURCE
- TENTATIVE U.S. RAIL DEAL GOES BACK TO UNIONS FOR A VOTE -SOURCE FAMILIAR WITH THE SITUATION
Some more good news is Amtrak “is working quickly to restore canceled long-distance trains” following the announcement of the tentative deal this morning, avoiding a rail strike Friday.
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A rail stoppage that threatened to unleash widespread economic damage by snarling critical supply chains appears to have been averted after freight rail companies and union leaders reached a tentative agreement.
“Following 20 consecutive hours of negotiations at the Department of Labor, rail companies and union negotiators came to a tentative agreement that balances the needs of workers, businesses, and our nation’s economy,” according to a Labor Department statement Thursday morning.
Moments ago, following more than 20 consecutive hours of negotiations at @USDOL, the rail companies and union negotiators came to a tentative agreement that balances the needs of workers, businesses, and our nation’s economy. (1/2)
— Secretary Marty Walsh (@SecMartyWalsh) September 15, 2022
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, travelers, and families across the country.”
President Biden commented on the agreement between railroads and unions:
“The tentative agreement reached tonight is an important win for our economy and the American people.”
This is a win for the economy and for the American people.
Rail workers will get better pay, improved working conditions, and peace of mind around their health care costs.
I thank both the unions and rail companies for negotiating in good faith. https://t.co/9JNtLynsch
— President Biden (@POTUS) September 15, 2022
A White House statement said:
“These rail workers will get better pay, improved working conditions, and peace of mind around their health care costs: all hard-earned. The agreement is also a victory for railway companies who will be able to retain and recruit more workers for an industry that will continue to be part of the backbone of the American economy for decades to come.”
The breakthrough tentative agreement was announced one day before more than 100,000 rail workers were set to strike. Even though most rail unions already agreed on labor contracts, multiple unions holding out represented a large swath of rail workers. Such a disruption would’ve cost the US economy $2 billion per day, shuttering about 30% of domestic freight traffic and stoking inflationary pressures.
Railroad companies are moving higher premarket on the news.
Norfolk Southern is up 1.5%, with shares in Union Pacific surging nearly 5%. CSX is up about 2%.
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