‘Biden Had to Put the Country First’

As Transportation Division president of the International Association of Sheet Metal, Air, Rail and Transportation Workers (SMART), Jeremy R. Ferguson represents 28,000 workers in the nine rail unions whose members work for the railroad freight hauling companies.  

In early December President Joe Biden pushed forward a bill in Congress preventing railroad workers from striking against the rail companies with which they had been negotiating for months. A strike, coming right before Christmas, “would have devastated our economy,” Biden said.  Biden and Congress drew heavy criticism for not including paid sick leave for railroad workers in the bill, a key demand of some of the unions. But Biden declared that the fight for sick leave “was not over.”  

Many labor activists were disappointed that Biden did not frame the conflict differently. The president, they argued, should have contrasted the massive profits of railroad companies with the brutal job conditions that railroad workers face.

The history of the railroads in the United States has been a history of intense and bloody labor conflict and the continuous intervention of the federal, state and local governments on behalf of the large railroad owners.  

Ferguson spoke to Capital & Main from his office in Cleveland about his view of President Biden’s actions, the difficult working conditions of his members and the complexities of the Railway Labor Act. 

This interview was edited for clarity and brevity.

 
Capital & Main: How do you view President Biden’s handling of this situation?

Jeremy Ferguson: He did the right thing in view of the cards that were left to play. Nobody could see either political party letting us walk out on strike and shutting the economy down right before Christmas. This all was made clear to us in September when we almost went on strike at that time. We could foresee this coming. Of the options left to play, the president and Congress imposing the contract was the best option.
 
Well, you have many people commenting that Biden “betrayed” the labor movement and so on. This doesn’t seem to be your view.
 
I don’t blame  Biden. He had to put the country first and the economy first. We wouldn’t have got a Presidential Emergency Board without Joe Biden. And that was the next step in the resolution of our impasse and our members not having a pay raise for three years. We weren’t getting anywhere with the freight carriers as they wanted givebacks on wages and health care.  Biden supported us by invoking the Presidential Emergency Board.  

I wanted to sit back down at the table and continue to negotiate. As president of the union, I have to support the majority of my membership. So, I made it clear to the railroads that come Dec. 9, we were going out on strike. The railroads concluded correctly that the president and Congress were going to intervene so they didn’t have to worry about our guys striking. They ran down the clock.
 
Explain what a day in the life of one of your members looks like, particularly the scheduling issues.
 
They have no predictability in their life. So, if a doctor’s office calls and says, “Can you come in three weeks from Tuesday to get your heart checked,” you have to respond, “I don’t know. I’m a railroader. I don’t know where I’ll be, I don’t know when I’ll be home.” Nobody has a calendar where the railroad tells them where they will work from day to day or the days you will be off. They can’t even give adequate forecasts for any 24-hour period, so our members don’t even know when they can sleep or when they will have to get up to go to work.  They are constantly trying to judge whether to lay down and sleep or not. You get a call to tell you to come in at midnight and help operate a train for 12 hours. This is really unsafe. In the new contract, everyone now has the ability to take two days off per week. 
 
Congress imposed the agreement that your members voted down, but you, as president of the union, had recommended that your members vote to ratify. Why did the membership reject it?
 
What was near and dear to our heart was the right for our road guys [those who travel on the trains] to have two voluntary days off a week. One of the key negative issues was also the bidding system on how seniority works on access to jobs. That’s where the controversy started.  There were some rules in the job bidding system where our members feared they might lose what they already had or that management could manipulate how the system worked.  Members were also concerned about how day-to-day operations might be changed. So, they voted against the unknown, so to speak. We had a record turnout on the vote — we have about 28,000 members — and the contract was voted down by about 500 votes.
 
Were many media outlets wrong to focus reports on the issue of sick leave?
 
Absolutely. Carrier absentee policies were one of our big sticking points in negotiations, and paid sick leave was one thing we argued for at the Presidential Emergency Board to combat these ridiculous policies. I’m the one that argued for the paid sick days at the PEB, but I did not hear from our members that the absence of sick leave was why they were voting no.  
 
It sounds like many issues that were kind of tied together.
 
Yes. Quality of life was our big theme. We needed to have scheduled time off. We needed to make sure that we had paid sick days so if people did become sick, because we just went through a pandemic and they tried to fire people because they had COVID. Our members were so pissed off about all the attendance policy problems.
 
Because of the congressional action you are prohibited from striking for how long?
 
Under the Railway Labor Act, the contract never expires, it is only amended or changed. But we have a moratorium period, and this moratorium period expires in January of 2025, which will begin a new negotiation process.
 
It seems like there is a de facto prohibition on striking if Congress is always going to intervene to stop them. If labor’s biggest weapon – the strike – has been taken away, there is no incentive for the employer to bargain in good faith. Why aren’t you calling for getting rid of the Railway Labor Act?
 
The de facto prohibition is not imposed by the RLA but by the president and Congress, who have the authority to stop any strike or lockout pursuant to the Commerce Clause of the Constitution. The railroads also have taken advantage of this clause by attempting to handle all matters at a national level instead of each carrier handling their own negotiations and agreements. Congress would not be overly concerned if we struck just one of the seven carriers while the rest of the railroads continued operating. But if we engaged in selective strikes, all the other carriers would more than likely lock us out everywhere, like they did in 1991, forcing congressional intervention. The railroads can handle a long strike much more easily than our members, who would exhaust their savings very quickly.
 
A number of presidents have intervened in railroad labor relations. Why has the railroad freight industry consistently needed this kind of federal intervention?
 
Have you ever heard the phrase “getting railroaded?” The railroads rightfully earned that phrase because of the way they have treated their employees, their customers and the public.  Prior to the passing of the Railway Labor Act in 1926 there was strike after strike after strike.  Today we have to arbitrate most of our disputes so strikes have declined. We can strike on what are called “major disputes,” like a unilateral pay cut, for instance, unless Congress intervenes, but we arbitrate minor disputes.
 
Since the 1980s, there’s been a deregulation of railroad shipping. What have been the consequences?
 
Primarily, the railroads have become super profitable. They set their own rate hikes, and they now choose which freight they wish to haul that benefits them, not the customer. They have become super arrogant and very difficult to deal with because of their greed. Currently, there is one engineer on a train and one conductor, and the companies want to take conductors off the train to save money.
 
Explain the role of hedge funds and how they became involved in the industry.
 
JF:  Hedge funds have come in and put certain CEOs in the industry that have drastically changed how railroads operate. They implemented precision scheduled railroading, which gutted every railroad that they touched. They reduced employee headcounts (including management), reduced customers, reduced boxcars, they reduced online locomotives so the employees have to do more with less in one of the most profitable businesses in the country.  They push stock prices through the roof, sell the stock and then disappear like locusts. The railroads now have an operating ratio — which is essentially profit margin — of 55% to 65%.
 
The rail freight industry is essentially a monopoly at this point. Is that correct?
 
It depends where you’re at geographically, but we call it a duopoly. West of the Mississippi you have Union Pacific and BNSF who run the freight.  And you have the CSX and NS (Norfolk Southern) in the east. Typically, this means higher shipping costs, because you’re either going to ship it by rail for the higher price that they can get due to little competition, or you’re going to pay even more to ship by truck. If I’m a shipper, I’m going to pass on the higher cost to the consumer.
 
Going forward, how can workers build more power and gain public support?
 
We didn’t get the strike, but all the positive media attention that we received both in September and during the past month will make the railroads think twice about all the negative publicity they got. I think they’re going to start cleaning their act up a little bit. I’m not looking at this through rose-colored glasses, but we’re already starting to see a few of them start to change.
 
What are you worried about for the future?
 
Technology and automation.  The railroads want to continue to cut their way to more profits.  They want to eventually run the rail system without people. 
 

 
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