New labor pact, new CSX leader in place

By Jeff Stagl, Managing Editor

Two major rail industry developments came to light only hours apart in the wee hours of Sept. 15. 

First, President Joe Biden announced a tentative labor agreement had been reached between the National Carriers’ Conference Committee (NCCC) — which bargains for the major freight railroads — and the Brotherhood of Locomotive Engineers and Trainmen, Brotherhood of Railroad Signalmen and International Association of Sheet Metal, Air, Rail and Transportation Workers-Transportation Division. The agreed-upon pact averted a potential nationwide strike the unions had threatened to launch on Sept. 16. 

Then, CSX Corp. announced its President and CEO James Foote would retire Sept. 26 and be succeeded by Ford Motor Co. executive Joseph Hinrichs — the first high-level executive to come from an industry outside the rail sector and immediately assume a Class I’s reins. 

Now subject to ratification votes at the three major unions, the tentative labor agreement includes wage increases and bonuses, as well as no increases to insurance copays and deductibles. 

The settlement calls for annual lump-sum bonus payments totaling $5,000 and an immediate wage increase of 14% compounded with an additional 4% on July 1, 2023, and 4.5% on July 1, 2024. Workers also would receive retroactive pay hikes of 3%, 3.5% and 7% for 2020, 2021 and 2022, respectively. 

The agreement is a win for tens of thousands of rail workers who worked tirelessly through the pandemic to help deliver goods, Biden said in a prepared statement. 

“These rail workers will get better pay, improved working conditions and peace of mind around their health-care costs: all hard-earned,” he said. “The agreement is also a victory for railway companies who will be able to retain and recruit more workers for an industry that will continue to be part of the backbone of the American economy for decades to come.” 

Since late August, the NCCC had reached tentative labor pacts with nine other rail labor unions, including the Brotherhood of Railway Carmen, Brotherhood of Maintenance of Way Employes Division and American Train Dispatchers Association. The 12 unions bargaining with the NCCC represent about 115,000 rail workers. 

New position in transition

Meanwhile, Foote — CSX’s leader since December 2017 — will continue to serve the railroad as an adviser through March 31, 2023, to help with the leadership transition. Most recently president of Ford’s $160 billion automotive business, Hinrichs, 55, has more than 30 years’ experience in the global automotive, manufacturing and energy sectors. 

He previously served the automaker as president of global operations, president of the Americas and president of Asia Pacific and Africa, and held various executive roles in global manufacturing, materials planning and logistics. 

During his 30-year Ford career, Hinrichs garnered experience with product development, purchasing, manufacturing, labor and government affairs, marketing and sales, information technology, sustainability, safety and environmental engineering. 

Hinrichs had helmed Ford for much of its transformation, producing record operating and financial results, and championing sustainability and safety, CSX officials said in a press release. 

“Joe’s great strength is operational excellence. He enabled Ford to execute world-class manufacturing on a global scale, including prioritizing exceptional customer service,” said Foote. “In addition to leading complex businesses … he has proven that he understands how to prioritize safety and efficiency in an industry with dynamics that are similar to those we are navigating today in rail.”