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Major rail unions reject contract, a strike may be looming

The SMART Transportation Division voted down the deal brokered by the White House

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Locomotives are coupled to railway cars in the Selkirk rail yard Wednesday, Sept. 14, 2022, in Selkirk, N.Y.

Locomotives are coupled to railway cars in the Selkirk rail yard Wednesday, Sept. 14, 2022, in Selkirk, N.Y. A threat of a national freight strike rose this weekend after railroad workers unions rejected a labor deal, sources say.

Hans Pennink, Associated Press

One of the biggest railroad workers unions rejected a labor deal on Monday. According to CNN, the threat of a national freight rail strike is looming.

The SMART Transportation Division, or SMART-TD, which represents rail conductors, voted down the “Biden-brokered labor deal,” previously touted as a big win for the White House, per Axios. This organization represents those in transportation divisions of the sheet metal, air and rail industries.

Meanwhile, the BLET, the second largest union, voted to ratify the agreement, per NPR. The BMWED, the third largest union, voted down the contract last month, according to Axios.

What do the contracts entail?

The agreement currently provides a 24% raise over five years, sets limits on health care costs and relaxes strict attendance policies, allowing workers to tend to medical needs without facing any penalties.

Per the report, this contract, previously deemed “the most generous” in modern history by the railroads, ultimately wasn’t enough for the union workers, who pointed to record profits in recent years.

“SMART-TD members with their votes have spoken, it’s now back to the bargaining table for our operating craft members,” said SMART-TD President Jeremy Ferguson in a statement. “This can all be settled through negotiations and without a strike. A settlement would be in the best interests of the workers, the railroads, shippers and the American people.”

A statement from BMWED said that if paid sick leave for all employees isn’t agreed upon, then “there is either a strike or lockout or both, then the railroads will be responsible for the imposition of a shutdown of their operations and the economic harms to its customers, the country’s economic supply chain and the entire U.S. economy.”

As for the other union, BLET President Dennis Pierce said that they “stood shoulder to shoulder with our brothers and sisters in SMART-TD.”

Will rail unions strike?

A potential strike on Dec. 9 would decline the GDP, exacerbate inflation and impact nearly $2.8 billion worth of chemicals transported through cargo in a single week, per CNBC.

Overall, the report estimates a $2 billion loss each day, affecting agriculture, retail and more. However, UPS, one of the largest customers, said it will be able to manage the situation through its integrated network.