Trade groups representing chemical and agricultural companies in Michigan on Tuesday called on Congress to get involved to avert a rail freight shutdown caused by a possible strike that would cause serious disruption to multiple industries and services that serve are of vital importance to the state.
Her plea came as President Joe Biden on Monday also called on lawmakers to step in and block a strike before a key Dec. 9 deadline in stalled contract negotiations between the largest rail freight companies and several unions representing their workers.
“A rail strike would be devastating to Michigan’s economy and must not be allowed,” said Chuck Lippstreu, president of the Michigan Agri-Business Association, noting the potential disruption to grain and fertilizer transportation and access to export markets.
“Rural businesses rely on rail to transport grain, fertilizer and many other products.
The chemical industry also relies on rail to ship chemicals to manufacturers, including those involved in water treatment, refining and power generation, added Michigan Chemistry Council executive director John Dulmes.
“The chemical business would be among the first and hardest hit in the event of a rail network closure, and we are counting on Congress to act,” Dulmes said in a statement Tuesday.
Other industries, including auto manufacturing, would also be affected as three-quarters of finished automobiles leave the state by rail, according to the Michigan Rail Association. Industry groups have also warned that the possibility of a rail strike could see railroads halting shipments of hazardous chemicals, grain and other goods as early as this weekend to prevent those products from being stranded on the tracks.
Passenger service in Michigan would also be disrupted in the event of a strike, since Amtrak’s three routes in the state, including between Chicago and Detroit, use track owned and operated by freight railroads.
Biden has asked lawmakers to accept a tentative labor agreement reached between the railroads and unions in September. House Speaker Nancy Pelosi said late Monday that the House will not change the terms of that September deal and will vote on the bill this week and send it to the Senate.
“We are reluctant to bypass the standard ratification process for the interim agreement — but we must act to prevent a catastrophic nationwide railroad strike that would shut down our economy,” Pelosi said in a statement.
If Congress intervenes, this process will finalize talks between the railroads and the four railroad unions that voted to reject the deals that the Biden administration helped broker ahead of the original September strike date. Eight other unions agreed to five-year contracts with the railroads and are in the process of getting their workers’ wages back for the 24 percent hike backdated to 2020, according to the Associated Press.
Railroads and unions have largely clashed over rules on attendance policies, which workers say make it difficult to take time off for doctor appointments or family emergencies. The September agreement added three unpaid days off per year for engineers and conductors to attend to doctor’s appointments, provided they made at least 30 days’ notice. The railroads also said in September they would not penalize workers who are hospitalized.
Biden said Monday that as a “proudly pro-worker president” he was unwilling to override the views of workers who voted against the deal. “But in this case — where the economic impact of a shutdown would hurt millions of other working people and families — I think Congress needs to use its powers to adopt this deal.”
The American Association of Railroads said a statewide railroad shutdown could stall nearly 7,000 freight trains and cost more than $2 billion a day in lost economic activity.
Four of the seven largest railcars operate in Michigan, with the state’s rail network carrying about 17% of the state’s freight tonnage and 21% of goods by value, according to state data. In 2020, Michigan transported $140.6 billion worth of goods by rail.
Industries from plastics to lumber and energy to agriculture rely on rail transportation to move across the state every day, with some traveling to or from Canada through tunnels under the Detroit River or the St. Clair River in Port Huron.
According to Michigan Department of Transportation data, the state’s top rail input product in 2020 (10.5 million tons) was coal (10.5 million tons), and the top input product was “transportation equipment.” This $35.6 billion category includes finished automobiles, automotive parts and bodies, and railroad equipment.
General Motors Co. CEO Mary Barra told the Washington Post in September that a rail strike would have been “very difficult” for automakers.
“Some plants would have closed pretty quickly,” she said, in some cases on the same day. Rail is critical for delivering frames to car factories and for delivering finished vehicles to distribution centers and dealerships.
Dulmes said chemical manufacturers in Michigan depend on regular rail shipments to operate and supply industries like auto, semiconductor and steel production, which account for 4% of GDP. Those manufacturers would likely face disruption “within days” of a rail strike, Dulmes said, noting that companies already grappling with existing rail service problems would be a major setback and would greatly compound existing problems on the network,” he said dulmes “We count on Congress to act promptly and avert such a disruption.”
The Associated Press contributed to this.
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