Deal reached to avoid rail strike

After marathon talks, Labor Department negotiators, rail operators and union representatives reached a tentative agreement early this morning that may avert a debilitating nationwide train strike. S&P 500 futures ticked up initially on the news.

With less than 24 hours left, Labor Secretary Marty Walsh tweeted at 5:08 a.m. Eastern that a crisis had been avoided. “Our rail system is integral to our supply chain, and a disruption would have had catastrophic impacts on industries, travelers and families across the country,” he said.

Rail unions had been negotiating for more pay, sick leave and safer working conditions; their members must still approve the deal.

The White House feared disaster if a strike went ahead tomorrow, further snarling America’s already-battered supply chain and potentially exacerbating inflation. A railroad trade group warned that a work stoppage could have cost as much as $2 billion a day.

Advertisement

Preparations for a strike were well underway. Companies had scrambled to find alternative transportation for goods and components, though trucks and airplanes could handle only a fraction of rail freight. Amtrak, which uses some of the same tracks as freight shippers, had announced yesterday that it would cancel all long-distance service starting today.

Even Warren Buffett was drawn into the fray. Tax justice advocates and Senator Bernie Sanders, independent of Vermont, criticized the billionaire — whose Berkshire Hathaway owns BNSF, the giant freight railway operator — for not doing more to avert a strike. At least some union officials had blamed BNSF for holding up talks.

“Billionaire railroad owners like Buffett extract their personal wealth directly from the exploitation of other human beings,” said Erica Payne, the president of the advocacy group Patriotic Millionaires. (The Washington Post reported that Greg Abel, one of Buffett’s top lieutenants, had been in talks with the administration.)