AFL-CIO Transportation Trades Department President Greg Regan joins Yahoo Finance Live to weigh in on how the union contract negotiations with railroads are proceeding, the issues at stake including wages and benefits, and the potential for work stoppage.
BRIAN CHEUNG: Train operators and the workers that keep them going remain at odds in labor negotiations. All of that as freight demand remains high. The latest deadline of Monday passed without a resolution that raises concerns over a possible strike. Here's what Lance Fritz, the CEO of Union Pacific Railroad, one of the major railroad companies, had to say yesterday about current negotiations. Take a listen.
LANCE FRITZ: I wish we could have gotten an agreement earlier in the process, but the railroads and the union leadership are pretty far apart right now in terms of what we think is an appropriate settlement on wages. So what's going to happen now is the presidential emergency board is going to hear both sides. And then they're going to propose what they think is a reasonable agreement. Then we'll have 30 days to negotiate off that and reach agreement. I'm hopeful we will do that. If not, a strike or a lockout could occur.
BRIAN CHEUNG: Well, joining us with more on the union side of things, Greg Regan, AFL-CIO, Transportation Trades Department president, joins us live now. Appreciate you taking the time this morning. You heard what Union Pacific CEO said in that clip that we just played that it seems like there's still a lot of friction on both sides. Where do you feel the union stands on those negotiations, as the president starts to get involved?
GREG REGAN: Well, I think what Lance said is right. The sides are pretty far apart. And I think, in large part, it's because the railroads are not coming to the table with a reasonable proposal. We are looking at a situation reality right now where the railroads have made over $140 billion in pure profit since 2015. And during that same time, they've laid off over 45,000 employees.
So when you look at what they're expecting out of the current workforce and what the pure profits are making, we need to make sure that these workers are being paid what their work and what they're worth and what they're delivering for the economy and for these companies.
BRIAN CHEUNG: Well, Greg, I mean, on that point, Lance says that it is the wage bit of these negotiations that's kind of creating that chasm there. It can't just be a number, though, that you're trying to land on, right? What are other things that the union is flagging in terms of things they'd like to see the railroad companies address?
GREG REGAN: Well, certainly, healthcare benefits are another major component of this negotiation. At its core, what the presidential emergency board that Lance mentioned, what they're going to address are wages and benefits. There are, obviously, other issues that we care about here. There are work rules. There are attendance policies and things like that that need to be worked out. But right now, we're focused on wages and benefits, the core economic issues in any collective bargaining agreement.
AKIKO FUJITA: What are you willing to move on? I mean, these are negotiations, right? Obviously, it sounds like you don't think that the railroad side has really come to the table. But where's the compromise? Where is the union willing to move on?
GREG REGAN: Well, certainly, I think if you look at the opening proposals that both sides came with, I think the unions have moved quite a bit, actually. The railroads have not. So I'm looking forward to seeing what the presidential emergency board comes up with and what they recommend as a reasonable agreement and a resolution to this because, quite frankly, I think the facts are on our side here.
Just, if you look at the underlying economics, what they're offering, what they have offered what would be a net pay cut for our employees, for their employees, for our members, that is simply not acceptable when you look at the profits they're bringing in, the rate of inflation we have right now. These people are being asked to suffer while the corporate side are making money hand over fist and doing stock buybacks and all that stuff. Their employees are the ones delivering these profits. They deserve to have a fair and equitable share in this.
AKIKO FUJITA: These drawn out negotiations certainly have shined a light on all the supplies move using the country's rail system. What kind of disruptions are we talking about if this drags on?
GREG REGAN: Well, I think, certainly, we do have a spotlight. I think people are starting to understand that goods don't just show up on their store shelves. They don't just show up at their doorstep. People are moving all of this. And our supply chain is vital, especially when we saw during the pandemic, vital to making sure that our economy continued to move during that difficult time. These are truly essential workers.
So, and what we're seeing right now, the way the railroads are operating, just from a-- on their skeletal staffing system-- they've been mothballing equipment-- they're not functioning in a very good way right now. The agricultural community, the energy community, the chemical companies, they've all come and publicly said that the railroads are not performing up to the standards that they need.
And so if we actually want to fix our supply chain issues and start having-- building a more resilient and sustainable supply chain, it starts by giving these people a contract that they deserve. Then we can start hiring up. Then we can start expanding services and meeting what our economy demands, quite frankly.
So, you know, I don't-- I wouldn't focus on what the upcoming disruptions are. I think it's more important to focus on what the current disruptions are and the fact that we are not-- the railroads are not meeting the needs of the port system, of the shippers, of the agricultural community. And that needs to change. And we need to do it with-- by supporting the workers.
BRIAN CHEUNG: Greg, my understanding is that the president, having stepped into this, extended the period by which you have that cooling off, where you wouldn't strike now. 60 days from now, though, would you then go on strike to make that point clear to the companies here? Because that could further exacerbate the disruptions. But it could also give you a little bit more, I guess, leverage in those discussions.
GREG REGAN: Well, I'm hopeful that we do have a good recommendation that's something that can be the basis of a negotiated and ratified agreement on all sides. That's the goal that the unions have had from the beginning here. It's not about trying to prove a point or have a work stoppage for the sake of a work stoppage.
What we want right now is to make sure we get a good agreement. And hopefully, the PV, the recommendation will be the basis to achieve that. And we're going to work closely. We're going to be diligent and disciplined and make sure that we can deliver for our members.
BRIAN CHEUNG: Well, I guess the important thing, too, is also to remind our viewers that this is a negotiation that's been going on for 2 and 1/2 or three years now. So that further kind of kicks the can down the road. Could you see Congress getting involved now that the presidential order does give them the power to intervene in these negotiations if they have to?
GREG REGAN: That is certainly a possibility. And we would not want to be in that situation. Nobody wants Congress to have to resolve a contract dispute. But we're doing our best to inform people to make sure they understand what's at stake in this negotiation, what their role could be down the road.
Certainly, from our perspective, you made a really good point. It's been three years since we started this negotiation, which, by the way, was during the teeth of the pandemic. And these workers have not received a raise, not a single penny of a raise in that three-year period. And so right now, I think there is a basic fairness issue at stake here.
AKIKO FUJITA: AFL-CIO Transportation Trades Department President Greg Regan, it's good to talk to you today. Appreciate the time.