White House braces for possible nationwide rail strike
US could lose $2B of daily economic output from work stoppage
Possible rail strike poses new issues for supply chain
Market Gauge Group managing director Michele Schneider and Fox News contributor Jonathan Hoenig discuss the possible impacts of a nationwide rail strike and the slip in bond yields ahead of key inflation reports.
The White House is preparing for a possible nationwide rail strike as two major unions that have not agreed to a new contract accuse railroad companies of "corporate terrorism."
A White House official told FOX Business that President Biden is personally tracking the issue, and Labor Secretary Marty Walsh is involved in talks.
"The fact that we are already seeing some impacts of contingency planning by railways again demonstrates that a shutdown of our freight rail system is an unacceptable outcome for our economy and the American people, and all parties must work to avoid that," a Labor Department spokesperson told FOX Business.
A BNSF rail terminal worker monitors the departure of a freight train, on June 15, 2021, in Galesburg, Ill. ((AP Photo/Shafkat Anowar, File) / AP Newsroom)
The American Association of Railroads estimates a work stoppage could cost more than $2 billion per day in lost economic output by idling more than 7,000 long-distance Class I trains per day – in addition to short line, passenger and commuter trains.
A strike could come as early as just after midnight Friday.
The leaders of the Sheet Metal, Air, Rail and Transportation Workers (SMART) Transportation Division and the Brotherhood of Locomotive Engineers and Trainmen (BLET) Teamsters Rail Conference said over the weekend that major railroad firms "began warning major shippers" late last Friday "that they are declaring an embargo on certain types of new shipments five days in advance of the end of the federally mandated cooling off period."
"The railroads are using shippers, consumers, and the supply chain of our nation as pawns in an effort to get our Unions to cave into their contract demands knowing that our members would never accept them." the unions said. "Our Unions will not cave into these scare tactics, and Congress must not cave into what can only be described as corporate terrorism."
A Union Pacific rail car is parked at the Canadian Pacific Railway (CP Rail) Toronto Yard in Scarborough, Ontario, Canada March 20, 2022. (Reuters/Chris Helgren)
PLAN TO GET RAILROAD CONTRACT DISPUTE MOVING INVOLVES 24% RAISES
SMART and BLET are two of the four unions that have not agreed to the current deal proposed by a Presidential Emergency Board (PEB) appointed by President Biden. If an agreement is not reached by the deadline, a strike or lockout could occur, in which case, Congress is expected to get involved.
"The parties continue to negotiate, and last night Secretary Walsh again engaged to push the parties to reach a resolution that averts any shutdown of our rail system. This followed on dozens of calls from the President’s Cabinet and top Administration officials, and months of Administration efforts. All parties need to stay at the table, bargain in good faith to resolve outstanding issues, and come to an agreement," a Labor Department spokesperson told FOX Business.
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The PEB is proposing a deal that would provide 24% cumulative raises and thousands in additional bonuses over a five-year contract covering some 115,000 rail workers. The rail companies and eight out of 12 unions have agreed to the plan, but the holdouts argue that it does not go far enough to protect railroad employees and address their working conditions.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| CNI | CANADIAN NATIONAL RAILWAY CO. | 110.80 | -2.56 | -2.26% |
| CP | CANADIAN PACIFIC KANSAS CITY | 77.59 | -1.22 | -1.55% |
| CSX | CSX CORP. | 36.00 | +0.44 | +1.24% |
| NSC | NORFOLK SOUTHERN CORP. | 271.64 | +0.76 | +0.28% |
| UNP | UNION PACIFIC CORP. | 241.68 | -0.87 | -0.36% |
FOX Business' Jacqui Heinrich and Breck Dumas contributed to this report.