Talks continue in effort to avert crippling freight rail strike
White House races to avoid railroad strike as Amtrak suspends serviceReplayMore Videos ... (16 Videos)White House races to avoid railroad strike as Amtrak suspends service'Both a warning and a threat': Economics professor decodes Fed chair's commentsFed chair lays out the 'unfortunate costs of reducing inflation'Biden's student loan forgiveness plan: Who it helps, who it doesn'tMiddle class Black Americans react to economy under BidenEngineer says she 'quiet quit' her job. Hear what that meansFed official on recession talk: When we look at the data, I feel relievedInflation is cooling but prices are still painfully high'It didn't get worse': Romans breaks down key inflation dataOnline shopping prices are starting to ease. Here's why that's significantHere's how the Inflation Reduction Act could affect you'Jaw-dropping number:' Ex Obama economic adviser on the jobs reportJuly jobs report doubles expectationsWhat is a recession?'I don't want to go bankrupt': High inflation leaves little room for unexpected costsFood bank demand skyrockets as cash-strapped Americans seek help over inflationNew York (CNN Business)Talks continued throughout Wednesday in hopes of averting a freight railroad strike set for early Friday that could cripple the nation's struggling supply chain and send prices higher for goods from gasoline to food to cars.
Two rail unions, representing more than 50,000 engineers and conductors who make up the two-person crews that make the trains run, are threatening the first rail strike in 30 years as of 12:01 am ET Friday. Union leaders and the railroads' labor negotiators were meeting throughout the day with Labor Secretary Marty Walsh at his Washington, DC, office. The talks were still continuing as of 6:30 pm ET, which was taken as a hopeful sign that perhaps progress was being made. In fact a person familiar with the discussions said the negotiators had just ordered an Italian dinner to be delivered, which could be seen that there are no plans to break off talks in the near term.A Labor Department spokesperson said Wednesday that the unions and railroad officials are "negotiating in good faith" and "committed to staying at the table" as discussions continue.On Wednesday morning, White House press secretary Karine Jean-Pierre told reporters aboard Air Force One that "all parties need to stay at the table, bargain in good faith to resolve outstanding issues and come to an agreement. A shutdown of our freight rail system is unacceptable outcome for our economy and the American people, and all parties must work to avoid just that."Read MoreThe Labor Department asked both management and labor not to comment on the state of the talks, and neither responded to a request for comment.Here's how the freight rail strike could affect youNearly 30% of the nation's freight moves on the nation's railroads. Many vital sectors — including oil refining, agriculture, auto and other manufacturing, plus the imports of consumer goods — depend on the railroads to operate. While a short strike would have a limited effect, economists say a strike lasting a week or more could have severe economic consequences.The railroads announced last Friday that they had stopped accepting shipments of hazardous material, including fertilizer, as well as security-related materials, due to concerns that trains will immediately stop wherever they are once the strike begins. On Wednesday many stopped accepting shipments of agricultural products.Members of Union Pacific (UNP) train crews were informed by the railroad late Tuesday that if they're in the middle of a trip when the strike begins at 12:01 am EST Friday they should park and secure their train and wait for transportation. Freight railroad Norfolk Southern (NSC) is planning to use management employees to operate a limited number of trains in the event of a strike Friday. That could allow critical materials to reach their destinations, like chlorine to water treatment plants. "We'll have some capability. Not a very good capability, but we'll have some if it comes to that," Norfolk Southern spokesman Connor Spielmaker told CNN Business Wednesday. "How we're going to utilize them is still being planned out." Spielmaker said the railroads still hope to reach a deal with the unions and avert such a situation. Freight railroads CSX, BNSF and Union Pacific declined to say if they'll be using management employees to operate trains in the event of a strike. Strike threat has White House under pressureThe effort to avert a strike is a major test for President Joe Biden and his White House, which has positioned itself as one of the most pro-labor administrations ever. At the same time, it also wants to avoid any potential shocks to the economy, especially with the midterm elections just seven weeks away.Railroad workers are governed by a different labor law than most workers, one that limits their freedom to strike and allows for more governmental intervention. In July Biden issued an order that prevented a strike at that time and created a panel, known as a Presidential Emergency Board, to try to find a solution to the dispute. It also imposed a 60-day cooling off period during which the unions could not strike and management could not lock out workers.But Biden cannot order the railroads to keep operating once the cooling off period ends Friday. Only Congress can act to keep workers on the job if there is no deal. Sen. Richard Durbin, the second highest ranking member of the Democrats' Senate leadership, told CNN this week that Congressional action is unlikely, despite business groups calling on Congress to act. The Senate is in recess on Friday, and many members of Congress are flying to London to attend Queen Elizabeth's funeral.Fight not over wagesThe PEB's recommendations called for workers to get an immediate 14% pay raise, plus back pay dating back to 2020. It also called for a 24% increase in pay during the five-year life of the contract from 2020 to 2024, and cash bonuses of $1,000 a year.But it did not address the staffing shortages and scheduling rules that have become the key sticking point in the dispute. The engineers' and conductors' unions say the railroads are requiring their members to be "on call" and ready to report to work on short notice as often as seven days a week. Leadership of the two unions say their members would not accept a contract without changes to those work rules.There are more than 50,000 other unions members at the railroads who maintain tracks, operate signals, dispatch trains and work as mechanics, among other jobs. But they are not subject to the same work rules, and those unions already accepted tentative deals with the railroads based on the PEB's recommendations.One of those unions, the Machinists, announced Wednesday that its members voted to reject its tentative labor deal. There are about 5,000 members of the union at the railroads working as locomotive machinists, track equipment mechanics and facility maintenance personnel. Their rejection of the proposed contract is not an immediate setback in efforts to avoid the strike. The union said it will not go on strike before the end of the month, as it tries to reach a change in the tentative agreement that its members will accept. But it is a sign of the complexity the railroads are facing in reaching deals with a dozen different unions that are also acceptable to rank-and-file membership. Two other unions, the Brotherhood of Railway Carmen and the Transportation Communications Union, which between them have 11,000 members, ratified deals on Wednesday.CNN's Matt McFarland, Ali Zaslav, Kate Sullivan, Phil Mattingly and Maegan Vazquez contributed to this reportClick Here To Get Funded!