UpdateUS president intervenes to prevent railroad strike

07 October 2011 00:20  [Source: ICIS news]

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HOUSTON (ICIS)--US President Barack Obama created a Presidential Emergency Board on Thursday to avert a potential rail strike.

The board will have 30 days to recommend solutions, then the rail companies and unions will have 30 days to approve them.

“It’s in our national interest to make sure our freight rail system runs smoothly, since a disruption could affect businesses across the country and cause unnecessary damage to our already-fragile economy,” Obama said.

Without Obama’s intervention, union members would have been allowed to initiate a work stoppage, picketing and other strike measures, and the rail operators would have authority to lock out workers.

Coming at a time when the US economy is already struggling to recover from the 2007-2009 recession, a rail strike could have major economic consequences.

US petrochemical producers and downstream chemical makers are heavily dependent on freight rail service for both delivery of feedstocks and movement of their product output.

For the overall US economy, railroads account for more than 40% of all freight.

Joanna Moorhead, spokeswoman for the National Railway Labor Conference (NRLC), said while NRLC and the United Transportation Union (UTU) have a ratified agreement, the other 11 unions involved have not yet agreed to the same deal.

The agreement ratified with UTU, she said, offers above-market wages, freezes employee healthcare contributions and makes design changes in the healthcare plan. UTU is the largest among the 12 unions involved.

The 11 unions that have not settled want higher wages and no changes to the existing health plan, she said.

Additional reporting by Joe Kamalick

Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy

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