Chemicals trade group warns rail strike would slam industry
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3M (NYSE:MMM), Dow (NYSE:DOW), Dupont (NYSE:DD) and Exxon Mobil (NYSE:XOM) are among the companies that would be negatively affected by a possible rail strike, a report suggests. A U.S. chemicals industry trade group that represents those companies on Wednesday said a work stoppage also could trigger a recession.
âChemical manufacturers are one of the first industries impacted by the threat of rail strike. To prepare for a shutdown, railroads stop accepting security-sensitive shipments,â according to the American Chemistry Council. âThese shipments include chemicals that are critical to safe drinking water and support industries that account for almost four percent of the U.S. gross domestic product.â
U.S. chemical makers are one of the biggest users of freight rail, shipping more than 33,000 carloads a week valued at $2.8 billion, the council said. It forecast that the U.S. economy would lose anywhere from $156 billion to $379 billion if the strike is one to two months long. Job losses could number from 700,000 to 2 million, according to its analysis.
âA rail strike would broadly curtail production for ACC members within days,â the report said. âFacilities will cut production to delay a shutdown for as long as possible, but by 5-7 days, many sites would face full shutdowns.â
The council is among the organizations including the U.S. Chamber of Commerce that have warned about the consequences of a rail strike.
Union Pacific (NYSE:UNP), CSX (NASDAQ:CSX) and other freight railroads have been negotiating with a dozen labor unions that represent about 115,000 workers. President Biden last summer named an emergency board to help reach an agreement to avert the first national strike in three decades.
The two biggest unions -- the transportation division of the International Association of Sheet Metal, Air, Rail and Transportation Workers and the Brotherhood of Locomotive Engineers and Trainmen â are in the process of voting to ratify a deal. Theyâre expected to announce the tally on Monday.
Seven unions have approved five-year deals that offer 24% raises and $5,000 in bonuses, while three unions -- the International Brotherhood of Boilermakers, the Brotherhood of Railroad Signalmen and Railroad Workers United â have rejected the agreements.
All 12 rail unions must ratify the contracts to avert a strike. A strike isnât currently scheduled because the unions have agreed to continue talks even when members vote against the labor agreements before a deadline in early December.