(The following article by Gregory Richards was posted on the Virginian-Pilot website on March 1.)
NORFOLK, Va. — Seven rail unions representing 46 percent of rail employees reached a tentative labor agreement Wednesday with the country’s major freight railroads, including Norfolk-based Norfolk Southern Corp.
The unions, representing 66,000 workers, have been negotiating since 2004 with the railroads over wages, health care and other issues. Specific details of the agreement were not released pending votes by members of the unions, one of which is the Brotherhood of Locomotive Engineers and Trainmen, the second largest.
However, the five-year deal includes wage increases and caps on health care co payments, according to the International Brotherhood of Teamsters, of which the engineers’ union is a division.
“It’s a major breakthrough,” George Francisco, chairman of the Rail Labor Bargaining Coalition, which represents the seven unions, told Bloomberg News. “The key to getting it done was the Democrats taking control of the House and Senate,” which put the railroads in a less advantageous position if talks broke down and Congress intervened.
Because of the importance of railroads to the national economy, Congress can step in as a last resort to legislate terms if contract talks fail.
Railroads wanted to hold down labor costs to help boost revenue. Though the big railroads reported strong 2006 earnings last month, the outlook for at least the first half of this year is more muted.
“We are certainly glad we reached an agreement,” said Joanna Moorhead, general counsel for the National Carriers’ Conference Committee, which represents the railroads, in an interview.
It will take 30 to 45 days for the union votes to occur, Francisco told Bloomberg.
The railroads have yet to strike deals with six of their unions, including the largest, the United Transportation Union. Talks between the railroad committee and the United Transportation Union collapsed in January, but Moorhead said the committee hasn’t yet taken the next step by asking the federal government to formally declare an impasse.
That could lead to the appointment of an emergency board by President Bush to make non binding recommendations. If those are rejected, Congress may intervene.
The deal reached Wednesday might set a pattern for reaching agreements with the remaining unions, Moorhead said.
“Usually the first agreements give a road map for the other contracts,” she said. “That’s been true historically in the rail industry.”