UPDATE: Late Thursday night, the Brotherhood of Locomotive Engineers and Trainmen and the American Train Dispatchers Association reached a tentative agreement with the nation’s major freight railroads. The agreement was reached after mounting congressional pressure urged a settlement, to avoid a strike that could have cost the economy billions.
The Brotherhood of Maintenance of Way Employees, the final remaining union without an agreement, has agreed to extend talks until February 8, 2012.
Railroad traffic could grind to a halt as early as next week, as union rail workers on the nation’s freight railroads decide whether to walk off the job.
A potential December 7 strike date looms, one day after a “cooling off period” set by the Obama-appointed Presidential Emergency Board (PEB) expires. As of Thursday, negotiations between unions and the railroads had all but broken down.
A strike could cost the U.S. economy $2 billion a day — almost 5 percent of the daily GDP — according to the National Carriers’ Conference Committee (NCCC), the bargaining representative for more than 30 of the nation’s largest railroads.
Thirty percent of the nation’s grain harvest would be stranded and some might spoil. Retailers’ ability to stock their shelves could be jeopardized during the holiday season. One-third of all U.S. exports — about $190 billion — could be stranded instead of shipped to buyers around the globe.
In The Hill on Thursday, U.S. Chamber of Commerce Vice President of Government Affairs Bruce Josten warned that a strike “would severely disrupt commerce across the country, wreak havoc on supply chains, and inhibit the export of U.S. goods and even disable intercity and commuter rail service.”
A rail strike could also disrupt the coal supply to much of nation’s power-plant infrastructure, since two-thirds of U.S. coal movements are made by railroads and 46 percent of U.S. electricity is generated from coal.
For almost two years, 13 unions representing 132,000 employees have been in negotiations with the largest U.S. railroads. The unions originally demanded a wage increase of 19 percent over five years. The railroads countered with a 17 percent increase over six years. During mediation, the PEB recommended an 18.6 percent increase over six years.
The railroads and most of the unions involved have already agreed to PEB’s recommendations. But the American Train Dispatchers Association and the Brotherhood of Locomotive Engineers and Trainmen have completely rejected a deal with the NCCC.
All bargaining units are set to strike if any unions fail to reach an agreement. More than 80 percent of U.S. rail workers are unionized.
On November 29, House Speaker John Boehner, Majority Leader Eric Cantor and Majority Whip Kevin McCarthy pledged to act to avert a strike. In a joint press release, the Republican House leaders said that “the House is prepared to take legislative action in the days ahead to avert a job-destroying shutdown of our nation’s railroads, in the event such legislation proves necessary.”
Congress has the authority to intervene with the nation’s railways to preserve interstate commerce under Article 1, Section 8 of the Constitution, and has done so on 19 previous occasions.
On December 1, Senate Majority Leader Harry Reid and House Transportation and Infrastructure Committee Chairman Rep. John Mica, a Florida Republican, introduced bills designed to prevent a strike by rail employees.
Reid’s resolution would extended the “cooling off period” deadline until February 8, 2012, while Mica’s would make the PEB’s recommendations binding through 2014.
In a press release, Pennsylvania Republican Rep. Bill Shuster, who chairs the House Railroads, Pipelines and Hazardous Materials Subcommittee, warned that “[s]hutting down our nation’s railways as we enter the busy holiday season would cripple a vital transportation sector at the worst possible time.”
The National Retail Federation is one of many trade associations calling on Congress to act to avert a strike, which it says would be “devastating” during the holiday shopping season.
Russ Brown contributed reporting.