(Reuters circulated the following on August 7.)
CHICAGO — Norfolk Southern Corp. said on Tuesday it reached a tentative agreement with a union representing locomotive engineers at the U.S. railroad that will continue to link their compensation to the company’s performance.
The agreement with the Brotherhood of Locomotive Engineers and Trainmen that runs through to 2014 would cover about 5,100 locomotive engineers. It also includes work rule changes defining engineers’ job responsibilities that should help the railroad run more efficiently, Norfolk said in a statement.
The agreement has to be ratified by employees.
Other highlights of the new agreement include general wage increases, improved incentive pay for weekend and holiday work, increased matching pension contributions, plus new vacation arrangements linked to qualifying requirements that will improve engineers’ availability for work.
Negotiations between the U.S. railroads and their unions have been ongoing for more than two years. The railroads have been on a major hiring spree for several years as a large portion of their work force is due to retire over the next decade.
They have also expanded as business has boomed on the back of rising demand from utilities for coal and soaring U.S. imports from developing nations such as China.
Freight volumes have declined this year, slowing but not halting hiring as the railroads still have to account for attrition.
Analysts have been keeping a close eye on union contract negotiations, as a failure to reach an agreement could raise the risk of a strike by the unions.
In trade on the New York Stock Exchange, Norfolk Southern shares were up 28 cents at $50.57.