President Joe Biden on Thursday hailed a tentative deal reached between the rail companies and unions to avert a strike that could exacerbate inflationary pressure.
“This is a great deal for both sides,” Biden said in brief remarks in the White House Rose Garden, flanked by Labor Secretary Marty Walsh and other officials. “I thank the unions and the rail companies for negotiating in good faith.”
The president called the deal “a big win for America” and said workers would receive better pay, while calling the agreement a “victory” for companies, as well.
A deal had to be reached by midnight to avert a shutdown.
The agreement will go to union members for a vote after a post-ratification cooling-off period of several weeks.
The National Carriers’ Conference Committee, which represents the railroads, said terms call for a 24% wage increase in the five-year period from 2020 to 2024, including a 14.1% increase immediately. The deal also calls for five annual $1,000 lump-sump payments.
The railroads initially proposed a 16% wage increase over those years; the unions had asked for a 28% wage boost.
Announcing the deal early Thursday, Walsh said talks had stretched for more than 20 hours straight.
U.S. stock-market futures
didn’t initially react strongly to the news, after a brief upward feint. Railroads, however, gained ground: Union Pacific UNP and Norfolk Southern NSC were lately up 2% and 1%, respectively, while CSX CSX fell 1.6%.
Stocks dropped later Thursday morning, with the S&P 500
off about 25 points and the Dow Jones Industrial Average
down 55 points.
Market Pulses: Railroad stocks rally after strike averted, to provide a big boost to the Dow transports
Without the deal that was reached among the 12 unions, a stoppage could have begun as early as Friday and could have halted shipments of food and fuel at a cost of $2 billion a day.
Far more was at stake than sick leave and salary bumps for 115,000 unionized railroad workers. The ramifications could extend to control of Congress and to the shipping network that keeps factories rolling, stocks the shelves of stores and stitches the U.S. together as an economic power.
The Associated Press contributed to this report.