US rail companies, unions reach 'tentative' deal to avert strike

·3-min read

A jubilant President Joe Biden announced a tentative deal Thursday to avoid a crippling strike by railroad unions following all-night talks as the clock ran down on threats to disrupt US supply chains in the run-up to midterm elections.

"It feels good!" Biden told a tired-looking group of negotiators invited into the Oval Office after their sleepless night. "They should be home in bed," he said.

Biden, who was personally calling into the negotiations as late as 9:00 pm on Wednesday, issued a pre-dawn statement announcing the preliminary resolution, which allows for a 24 percent wage increase between 2020 and 2024, including an immediate payout.

At a hastily organized celebration in the Rose Garden, Biden called the agreement "a big win for America" and said the "dignity" of railroad workers had been honored.

The deal was a relief after worries that a Friday deadline would trigger nationwide stoppages, snarling critical supplies to an economy in the midst of a jittery recovery from the Covid-era shutdown.

For Biden personally, a strike would have been politically damaging as he tries to steer his Democratic party's uphill bid to hold on to Congress in November, with Republicans focusing heavily on high inflation.

Biden, in his initial statement, said "the hard work done to reach this tentative agreement means that our economy can avert the significant damage any shutdown would have brought."

"These rail workers will get better pay, improved working conditions, and peace of mind around their health care costs: all hard-earned."

The Association of American Railroads, which represents the nation's freight railroads, welcomed the deal.

Major freight carrier Union Pacific said it "looks forward to the unions ratifying these agreements and working with employees as we focus on restoring supply chain fluidity."

- All-nighter -

In the West Wing, exhausted staffers recounted an all-nighter which saw cabinet secretaries huddle with union leaders and rail executives at the Labor Department building.

"There were 20 plus hours in negotiations. At no point did anyone ever get to go home," a senior official told reporters.

At 9:00 pm Wednesday, Biden called in and "his message was we have to get agreement -- a shutdown is unacceptable -- and that they need to respond in good faith to each other."

Agriculture Secretary Tom Vilsack and Transport Secretary Pete Buttigieg made calls "throughout the day and night" and at 2:00 am, Labor Secretary Marty Walsh "called the White House and said it looks like a deal is coming together," the official said.

Final details were ironed out, one of the union boards was woken at 3:00 am and two hours later the deal was announced.

"Failure was not an option," the official said.

- Inflation fears -

Polls show voters are worried about soaring prices in the post-pandemic economy, where supply chain issues have been a constant scourge and annual inflation has surged to a 40-year high.

The Association of American Railroads had warned that a strike would bring 7,000 trains to a halt, costing $2 billion a day.

Farmers and retailers had warned that a strike would hit US supply chains already battered by the Covid-19 pandemic.

"There is no real substitute for moving agricultural goods," warned American Farm Bureau Federation president Zippy Duvall.

Recognizing the danger, Biden had appointed an arbitration panel back in July to facilitate the negotiations. Asked by reporters in the Rose Garden what Americans should do about rapidly rising food prices and other inflation, he said the railroad deal would bring relief.

"Rail's moving and (inflation) is not going to go up," Biden said.

Amtrak, the US rail passenger operator, which had announced plans to cancel long-distance train services if freight workers went on strike, said it would immediately get trains rolling again.

"Amtrak is working to quickly restore canceled trains and reaching out to impacted customers to accommodate on first available departures," it said in a statement.