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Biden announces tentative deal to avert rail strike that threatened massive disruption

The White House has struck a tentative deal to avoid a rail strike that threatened massive disruption across the United States, President Joe Biden announced early Thursday.

Business groups and political officials had been growing increasingly concerned about the possibility that a strike could cripple the country’s supply chains and disrupt passenger services.

The tentative deal will represent a relief for Biden ahead of the midterm elections, after days of mounting fears that a union contract dispute might not be resolved by then.

“For the American people, the hard work done to reach this tentative agreement means that our economy can avert the significant damage any shutdown would have brought,” Biden said in a statement.

The president said the deal was also “a win for tens of thousands of rail workers who worked tirelessly through the pandemic.”

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

The president said it was also a victory for railway companies “who will be able to retain and recruit more workers for an industry that will continue to be part of the backbone of the American economy for decades to come.”

The statement did not expand on the details of the deal struck. As of early Thursday morning, neither the labor unions or railway companies appeared to have commented on the tentative deal.

A source familiar with the negotiations described the “tentative” language as “a standard part of the ratification process,” which will now go to the union membership for a vote. As part of the agreement reached last night, there will be a “cooling off” period of several weeks to ensure that if a vote doesn’t succeed for any reason, there still would not be an immediate rail shutdown.

Biden made “a crucial call” at around 9 p.m. ET last night to Labor Secretary Marty Walsh and the negotiators representing railroad unions and companies, the source said.

Both sides met at the Department of Labor in Washington yesterday, with 20 hours of negotiations ultimately leading to the tentative deal, the source added.

Rail strike could have had ‘catastrophic impacts’

Walsh said in a tweet that a disruption to the rail system would have had “catastrophic impacts on industries, travelers and families across the country.”

In addition to affecting travel, a rail strike could severely impact a range of industries, from the auto industry to agriculture and retail, with around 40% of goods that are shipped long-distance in the U.S. relying on the rail system.

It could also impact the energy industry if consumers ended up having to pay more for gasoline, natural gas and electricity.

A 30-day moratorium suspending the possibility of a strike was set to end Friday for members of the two largest freight rail unions in the U.S., the Brotherhood of Locomotive Engineers and Trainmen, or BLET, and SMART Transportation Division. 

In a sign of what was to come, Amtrak had preemptively canceled three long-distance train routes running on lines operated by freight railroads.

The two unions say quality-of-life concerns — primarily carriers’ scheduling practices that leave many workers on call 24/7 every week of the year — remain a major obstacle to an agreement and one they are willing to strike over.

“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’ presidents, Jeremy Ferguson of SMART-TD and Dennis Pierce of BLET, said in a joint statement.

The Biden administration was able to temporarily avert a strike this summer after convening a three-person board to study the issue and freeze negotiations in July under labor laws applying to the rail system.

The panel recommended last month that workers be given raises amounting to a 24% increase over a five-year period ending in 2024, with a 14% raise backdated to 2020 to be made available immediately.

Workers, however, said increasingly punitive scheduling practices remained an issue in the industry due to a shrunken labor force.

Back in July, more than 10 current and former workers spoke with NBC News about the conditions on the rails, with all current workers saying they supported a stoppage.

“The company keeps making working conditions worse,” a conductor with Union Pacific in the Midwest, who asked that his name be withheld for fear of reprisal, told NBC News at the time.

“They’re making billions per quarter and they’re only paying those dividends out to shareholders, when it’s the workers who are moving freight and making sure this country keeps the supply chain moving,” they said.

NBC News has reached out to BLET, SMART-TD, TCU and IAM District 19 for comment.

Chantal Da Silva

Chantal Da Silva is a breaking news editor for NBC News Digital based in London. 

Mike Memoli

Mike Memoli is an NBC News correspondent. 

Eli M. Rosenberg

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