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Everchem Updates
VOLUME XXI
September 14, 2023
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September 13, 2022
Three More Unions Reach Tentative Agreements With Freight Railroads
by Tyler Durden
Monday, Sep 12, 2022 – 05:40 PM
By Noi Mahoney of FreightWaves
Three more railroad unions have reached tentative agreements with U.S. freight railroads on a new labor contract, announced the National Carriers’ Conference Committee (NCCC).
The tentative agreements announced Sunday include the Brotherhood of Maintenance of Way Employes Division of the International Brotherhood of Teamsters; the International Brotherhood of Boilermakers; and the International Association of Sheet Metal, Air, Rail and Transportation Workers-Mechanical Department.
“The tentative agreements … include a 24% wage increase during the five-year period from 2020 to 2024 — with a 14.1% wage increase effective immediately — and five annual $1,000 lump sum payments. Portions of the wage increases and lump sum payments are retroactive and will be paid out promptly upon ratification of the agreements by the unions’ membership,” said the NCCC, the group representing Class I railroads in the contract negotiations.
The tentative agreement also adds an additional paid day off that can be used as a personal day, vacation day or on the employee’s birthday.
The three unions represent more than 86,000 freight rail employees. Eight unions have accepted tentative deals they will be taking to their members for ratification. Altogether, there are over 140,000 employees at the bargaining table employed by the U.S. operations of Class I railroads.
A new labor deal has been in the works since January 2020, but the negotiations had failed to progress. A federal mediation board took up the negotiations but released the parties from those efforts earlier this summer.
Per the Railway Labor Act, the remaining unions would be able to legally stage a work stoppage or strike after a cooling-off period ends Sept. 16.
Unions respond to potential hazardous shipments embargo
The heads of two rail unions said Sunday that the freight railroads’ decision to begin delaying shipments of security-sensitive and hazardous material ahead of this week’s looming strike deadline is only an attempt to get shippers to increase pressure on Congress to intervene and block a work stoppage.
Several major Class I railroads said Friday they would begin curtailing shipments of hazardous materials and other chemicals in the event loads could be left unattended on a rail network. A strike or lockout is not allowed until Friday.
“This completely unnecessary attack on rail shippers by these highly profitable Class I railroads is no more than corporate extortion,” the heads of the unions that represent engineers and conductors — Jeremy Ferguson, president of the Sheet Metal, Air, Rail and Transportation Workers-Transportation Division union, and Dennis Pierce, president of the Brotherhood of Locomotive Engineers and Trainmen union — said in a joint statement.
“Our unions remain at the bargaining table and have given the rail carriers a proposal that we would be willing to submit to our members for ratification, but it is the rail carriers that refuse to reach an acceptable agreement. In fact, it was abundantly clear from our negotiations over the past few days that the railroads show no intentions of reaching an agreement with our unions, but they cannot legally lock out our members until the end of the cooling-off period. Instead, they are locking out their customers beginning on Monday and further harming the supply chain in an effort to provoke congressional action.”
https://www.zerohedge.com/economics/three-more-unions-reach-tentative-agreements-freight-railroads
September 12, 2022
US Railroads Enact “Contingency Plans,” Preparing For Labor Strike As Union Talks Fail
by Tyler Durden
Monday, Sep 12, 2022 – 08:45 AM
Railroads and labor unions worked through the weekend to make a deal. There were little signs of progress, and rail companies are now taking steps Monday to secure shipments of hazardous and security-sensitive materials “in light of the possibility of a rail labor strike,” the Association of American Railroads (AAR) wrote in a statement.
On Sunday, Norfolk Southern released a statement detailing it had “begun enacting its contingency plans for a controlled shut down of our network at 00:01 on Friday, Sept. 16.” The railroad said two labor unions are holding out on new contracts, “we still do not have a commitment not to strike and must act accordingly,” adding, “Our goal is to ensure that in the event of a work stoppage, crews, equipment, and freight safely reach their destinations with minimal disruption.”
Union Pacific and CSX also announced contingency plans for a possible work stoppage. BNSF told customers to call Congress so lawmakers on Capitol Hill can “intervene to prevent or quickly resolve the service disruption” if a labor strike materializes on Friday. The railroad also said: “We will begin to take steps to manage and secure the shipments of hazardous and security-sensitive materials as early as Monday.”
Rail freight networks are the arteries of the US economy.
Two months ago, the Biden administration imposed a two-month cooling-off period is set to expire at 12:01 am ET on Sept. 16 — after that — President Biden didn’t have the power to prevent a strike among two labor unions that had yet hammered out a deal with railroads. Only Congress can intervene after the cooling period expires.
Bloomberg said the two unions include the Brotherhood of Locomotive Engineers and Trainmen and the International Association of Sheet Metal Air, Rail and Transportation Workers, accounting for more than 90,000 rail employees. Ten of the other unions have already struck a deal with railroads.
Association of American Railroads warned that a railroad strike could cost the US economy upwards of $2 billion per day, while disruption wouldn’t be good optics for the Biden administration ahead of the midterm elections in November.
Bloomberg Intelligence analyst Lee Klaskow pointed out that BNSF and Union Pacific account for 45% of Class I intermodal traffic, while CSX and Norfolk Southern has 31%.
According to government data, about 29% of all US freight moves on the rails. Half the cargo is bulk commodities, such as energy, food, chemicals, metals, and wood productions — the other half is shipping containers of consumer goods.
“Even a temporary interruption would create a devastating ripple effect” across US supply chains, American Bakers Association, a Washington-based trade group representing more than 300 companies, warned.
Even if there’s no strike, rail networks are already clogged. Shipping line Maersk recently suspended import bookings through Fort Worth, Texas, due to “severe congestion” in railyards.
Railroads are preparing for possible work stoppages at the end of the week if the two unions can’t formulate a deal. There’s the possibility Congress could intervene before the cooling period expires. If not, then expect a flare-up in snarled supply chains.
September 12, 2022
US Railroads Enact “Contingency Plans,” Preparing For Labor Strike As Union Talks Fail
by Tyler Durden
Monday, Sep 12, 2022 – 08:45 AM
Railroads and labor unions worked through the weekend to make a deal. There were little signs of progress, and rail companies are now taking steps Monday to secure shipments of hazardous and security-sensitive materials “in light of the possibility of a rail labor strike,” the Association of American Railroads (AAR) wrote in a statement.
On Sunday, Norfolk Southern released a statement detailing it had “begun enacting its contingency plans for a controlled shut down of our network at 00:01 on Friday, Sept. 16.” The railroad said two labor unions are holding out on new contracts, “we still do not have a commitment not to strike and must act accordingly,” adding, “Our goal is to ensure that in the event of a work stoppage, crews, equipment, and freight safely reach their destinations with minimal disruption.”
Union Pacific and CSX also announced contingency plans for a possible work stoppage. BNSF told customers to call Congress so lawmakers on Capitol Hill can “intervene to prevent or quickly resolve the service disruption” if a labor strike materializes on Friday. The railroad also said: “We will begin to take steps to manage and secure the shipments of hazardous and security-sensitive materials as early as Monday.”
Rail freight networks are the arteries of the US economy.
Two months ago, the Biden administration imposed a two-month cooling-off period is set to expire at 12:01 am ET on Sept. 16 — after that — President Biden didn’t have the power to prevent a strike among two labor unions that had yet hammered out a deal with railroads. Only Congress can intervene after the cooling period expires.
Bloomberg said the two unions include the Brotherhood of Locomotive Engineers and Trainmen and the International Association of Sheet Metal Air, Rail and Transportation Workers, accounting for more than 90,000 rail employees. Ten of the other unions have already struck a deal with railroads.
Association of American Railroads warned that a railroad strike could cost the US economy upwards of $2 billion per day, while disruption wouldn’t be good optics for the Biden administration ahead of the midterm elections in November.
Bloomberg Intelligence analyst Lee Klaskow pointed out that BNSF and Union Pacific account for 45% of Class I intermodal traffic, while CSX and Norfolk Southern has 31%.
According to government data, about 29% of all US freight moves on the rails. Half the cargo is bulk commodities, such as energy, food, chemicals, metals, and wood productions — the other half is shipping containers of consumer goods.
“Even a temporary interruption would create a devastating ripple effect” across US supply chains, American Bakers Association, a Washington-based trade group representing more than 300 companies, warned.
Even if there’s no strike, rail networks are already clogged. Shipping line Maersk recently suspended import bookings through Fort Worth, Texas, due to “severe congestion” in railyards.
Railroads are preparing for possible work stoppages at the end of the week if the two unions can’t formulate a deal. There’s the possibility Congress could intervene before the cooling period expires. If not, then expect a flare-up in snarled supply chains.
September 12, 2022
Alarm Bells Sound As World’s Second Largest Appliance Company Reports Demand Plunge
by Tyler Durden
Monday, Sep 12, 2022 – 09:28 AM
Swedish appliance maker Electrolux AB announced a cost reduction program after reporting a plunge in demand for its home appliances across Europe and the US.
The world’s second-largest home appliances manufacturer after Whirlpool said, “market demand for core appliances in Europe and the US so far in the third quarter is estimated to have decreased at a significantly accelerated pace compared with the second quarter, driven by the impact of high inflation on consumer durables purchases and low consumer confidence.”
It noted: “High retailer inventory levels have amplified the impact of the slowdown in consumer demand.”
Remember, there’s a massive inventory glut of consumer goods at retailers.
Electrolux warned a combination of snarled supply chains had pressured the company, which is expected to report an even more significant operating loss in the third quarter.
“In combination with supply chain imbalances resulting in significant production inefficiencies and increased costs, the third quarter earnings for the Group are expected to decline significantly compared to the second quarter 2022 also excluding the one-time cost to exit the Russia market. This has been driven mainly by Europe and North America. Business Area North America is expected to report an operating loss in the third quarter exceeding the loss in the second quarter.”
Waning consumer demand, retailer inventory building, and mounting losses for the Swedish company forced its board to “initiate a Group-wide cost reduction program addressing both variable and structural costs.” Electrolux explained more about the cost reductions:
“The program, which starts immediately, will focus on reducing variable costs, with special attention to eliminating cost inefficiencies in our supply chain and production. The structural cost reductions will primarily take place in Europe and North America and include prioritization and efficiency measures leveraging recent organizational changes which took effect July 1. The measures include increasing productivity in operations as well as optimizing the R&D portfolio, administration, sales and marketing activities.”
The souring outlook for Electrolux initially sent shares down 7% but have since recovered most losses late in the European session.
Electrolux’s CEO Jonas Samuelson said consumer confidence is expected to stay depressed in Europe, adding, “I think people will hold on to their wallets quite hard.” The same is likely true in the US — consumers have backed off buying durables goods and focused on purchasing staple products as the highest inflation in decades has sent wage growth deeply negative for more than a year. Households on both sides of the Atlantic are struggling.
September 12, 2022
Alarm Bells Sound As World’s Second Largest Appliance Company Reports Demand Plunge
by Tyler Durden
Monday, Sep 12, 2022 – 09:28 AM
Swedish appliance maker Electrolux AB announced a cost reduction program after reporting a plunge in demand for its home appliances across Europe and the US.
The world’s second-largest home appliances manufacturer after Whirlpool said, “market demand for core appliances in Europe and the US so far in the third quarter is estimated to have decreased at a significantly accelerated pace compared with the second quarter, driven by the impact of high inflation on consumer durables purchases and low consumer confidence.”
It noted: “High retailer inventory levels have amplified the impact of the slowdown in consumer demand.”
Remember, there’s a massive inventory glut of consumer goods at retailers.
Electrolux warned a combination of snarled supply chains had pressured the company, which is expected to report an even more significant operating loss in the third quarter.
“In combination with supply chain imbalances resulting in significant production inefficiencies and increased costs, the third quarter earnings for the Group are expected to decline significantly compared to the second quarter 2022 also excluding the one-time cost to exit the Russia market. This has been driven mainly by Europe and North America. Business Area North America is expected to report an operating loss in the third quarter exceeding the loss in the second quarter.”
Waning consumer demand, retailer inventory building, and mounting losses for the Swedish company forced its board to “initiate a Group-wide cost reduction program addressing both variable and structural costs.” Electrolux explained more about the cost reductions:
“The program, which starts immediately, will focus on reducing variable costs, with special attention to eliminating cost inefficiencies in our supply chain and production. The structural cost reductions will primarily take place in Europe and North America and include prioritization and efficiency measures leveraging recent organizational changes which took effect July 1. The measures include increasing productivity in operations as well as optimizing the R&D portfolio, administration, sales and marketing activities.”
The souring outlook for Electrolux initially sent shares down 7% but have since recovered most losses late in the European session.
Electrolux’s CEO Jonas Samuelson said consumer confidence is expected to stay depressed in Europe, adding, “I think people will hold on to their wallets quite hard.” The same is likely true in the US — consumers have backed off buying durables goods and focused on purchasing staple products as the highest inflation in decades has sent wage growth deeply negative for more than a year. Households on both sides of the Atlantic are struggling.
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