ADDING and REPLACING BNSF reaches tentative collective agreements with two additional labor unions

Rhea-AI Summary

BNSF Railway, in partnership with Norfolk Southern (NYSE: NSC), has reached tentative five-year collective bargaining agreements with The International Brotherhood of Boilermakers (IBB) and The National Conference of Firemen and Oilers (NCFO). This announcement comes four months before the next collective bargaining round, covering 17% of BNSF's union-represented workforce.

The agreements include:

• A 3.5% average annual wage increase over five years
• More vacation time earlier in employees' careers
• Enhancements to health care benefits

This move demonstrates BNSF's commitment to employee well-being and collaborative labor relations, potentially setting a new standard for future negotiations in the railroad industry.

Positive

• Tentative agreements reached with two additional labor unions, covering 17% of BNSF's union-represented workforce
• 3.5% average annual wage increase over five years
• Enhanced vacation benefits for employees earlier in their careers
• Improvements to health care benefits package
• Early agreements provide certainty for employees and potentially improve labor relations

Negative

• None.

Insights

Labor Relations Expert

This news is moderately positive for BNSF and the rail industry. The early agreement with two additional unions, covering 17% of BNSF's union workforce, demonstrates proactive labor management. Key benefits include:

• A 3.5% average annual wage increase over five years, providing stability and predictability for both the company and employees.
• Enhanced vacation benefits, potentially improving employee satisfaction and retention.
• Improved healthcare benefits, addressing a critical concern for workers.

This agreement sets a positive precedent for future negotiations and may help BNSF maintain operational stability. However, investors should note that increased labor costs could impact profitability in the short term, balanced against potential gains in productivity and reduced labor disputes.

Financial Analyst

From a financial perspective, this agreement presents a mixed outlook for BNSF and its parent company, Berkshire Hathaway. The 3.5% annual wage increase is significant and will increase operating costs. However, the early settlement provides several advantages:

• Improved budget forecasting and cost management for the next five years.
• Potential reduction in labor-related disruptions, enhancing operational efficiency.
• Possible competitive advantage in attracting and retaining skilled workers.

Investors should monitor how these increased labor costs impact BNSF's operating ratio and overall profitability. The long-term benefits of labor stability may outweigh short-term cost increases, but this will need to be closely evaluated in future financial reports.

Agreement comes months before next collective bargaining round, giving covered employees early assurances on significant future improvements to pay, health care, and vacation

FORT WORTH, Texas--(BUSINESS WIRE)-- Add after second paragraph of release: With this most recent announcement, 17 percent of BNSF’s union-represented workforce is covered by a pending tentative agreement.

The updated release reads:

BNSF REACHES TENTATIVE COLLECTIVE AGREEMENTS WITH TWO ADDITIONAL LABOR UNIONS

Agreement comes months before next collective bargaining round, giving covered employees early assurances on significant future improvements to pay, health care, and vacation

BNSF Railway, one of North America’s leading transportation companies, in partnership with Norfolk Southern Corporation (NYSE: NSC), today announced it has reached tentative, five-year collective bargaining agreements with The International Brotherhood of Boilermakers (IBB) and The National Conference of Firemen and Oilers (NCFO).

The news comes days after the railroad announced tentative agreements with four other labor unions, and four months before the opening of the next collective bargaining round, giving covered employees unprecedented certainty about upcoming enhancements to their pay, health care, and vacation.

With this most recent announcement, 17 percent of BNSF’s union-represented workforce is covered by a pending tentative agreement.

“We are pleased to come to tentative agreements with two more of our unions ahead of the scheduled bargaining round,” said BNSF President & CEO Katie Farmer. “The well-being of our people is key to our collective success, and this swift collaboration is indicative of our commitment to working together to continue delivering exceptional freight service to our customers. Thank you to our team of negotiators and labor leaders for prioritizing this agreement.”

The tentative agreements provide a 3.5-percent average wage increase per year over the next five years. They also offer railroaders more vacation earlier in their career and meaningful enhancements to an already robust suite of health care benefits.

“The International Brotherhood of Boilermakers is excited to have a tentative agreement with BNSF as it is a whole package with wage increases, vacation and insurance,” said IBB Director of Railroad Lodge Services John Mansker. “Katie Farmer and BNSF have really stepped the game up for negotiating contracts for rail labor before their contracts are up. All the unions hope this will be a standard practice in the future.”

“I want to thank President & CEO Katie Farmer on tasking the Vice President of Labor Relations Sam Macedonio and General Director of Labor Relations Derek Cargill to work on this,” said NCFO President Michael Pistone. “The NCFO welcomed the opportunity to roll up our sleeves at the bargaining table to reach this solid tentative agreement that will improve the overall quality of life for the NCFO membership and their families.”

About BNSF Railway

BNSF Railway is one of North America’s leading freight transportation companies. BNSF operates approximately 32,500 route miles of track in 28 states and also operates in three Canadian provinces. BNSF is one of the top transporters of consumer goods, grain and agricultural products, low-sulfur coal, and industrial goods such as petroleum, chemicals, housing materials, food and beverages. BNSF’s shipments help feed, clothe, supply, and power American homes and businesses every day. BNSF and its employees have developed one of the most technologically advanced, and efficient railroads in the industry. We work continuously to improve the value of the safety, service, energy, and environmental benefits we provide to our customers and the communities we serve. You can learn more about BNSF at www.BNSF.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240830947249/en/

Kendall Kirkham Sloan

Director of External Communications

Media@BNSF.com

Source: BNSF Railway

FAQ

What labor unions did BNSF reach tentative agreements with in 2023?

BNSF reached tentative agreements with The International Brotherhood of Boilermakers (IBB) and The National Conference of Firemen and Oilers (NCFO).

What is the duration of the tentative collective bargaining agreements BNSF reached with IBB and NCFO?

The tentative collective bargaining agreements BNSF reached with IBB and NCFO are for a five-year period.

What wage increase is offered in BNSF's tentative agreements with IBB and NCFO?

The tentative agreements offer a 3.5% average wage increase per year over the next five years.

How does the timing of these agreements relate to the next collective bargaining round for BNSF?

These agreements were reached four months before the opening of the next collective bargaining round, providing early certainty for covered employees.

What percentage of BNSF's union-represented workforce is covered by pending tentative agreements as of this announcement?

With this announcement, 17% of BNSF's union-represented workforce is covered by pending tentative agreements.