National Railroads Strike in September?

I'm surprised they didn't ask for inflation indexing for the future years. Which makes me wonder, how does accounting deal with retroactive pay increases?

I would like to see a simple chart: Railroad ask vs Union ask vs Final contract
Anything that was not part of the negotiated contract should be listed separately (crew size, attendance policies, etc).

If the unions failed to ask for something important it would be good to know why.
Were they focused on something more important?

BandA wrote: ↑Sat Sep 17, 2022 12:46 pm How does accounting deal with retroactive pay increases?

Mr. B&A, "been there done that".

Retroactive pay is simply booked when paid. Such would likely be "immaterial" to any reportable Financial Statements, however there could be a footnote within the Notes.

Restated Financial Statements ALWAYS "raise the Red Flags".

Makes sense. But if labor cost is "immaterial" to profits why are they making such a fuss about it.

Mr. B&A, hardly is labor insignificant; the retroactive settlement only is what I understood your inquiry to address.

It certainly appears that this Journal columnist has no use for the Act - and for that matter, that Joe "dictated" the terms of the "tentative" agreement.

Fair Use:

A national crisis was spawned for no better reason than an 88-year-old legal throwback to a bygone era of (to borrow a recent Bidenism) semi-fascist corporatism, which is the exact flavor of the Railway Labor Act amendments of 1934.

This obsolete law forces big government, big labor and big business into bed in a way that hardly makes sense anymore in a mostly free-market economy. If not for the law’s legacy, a nationwide strike encompassing the whole of the rail transportation system (33 private companies) would be all but unthinkable, much less the industry’s leverage to force the White House to dance to the industry’s exceedingly penny-ante economic disputes....... This is genuinely ridiculous, though it’s hardly surprising that, with the midterms coming up, the Biden administration felt the better part of valor was to award workers some additional sick days. Yet this week’s outcome almost guarantees that next time the railroads and the unions will be even less likely to reach terms without taking the economy and the occupant of the White House hostage.

Gilbert B Norman wrote: ↑Sat Sep 17, 2022 2:55 pmMr. B&A, hardly is labor insignificant; the retroactive settlement only is what I understood your inquiry to address.

I believe that he was referring to derogatory comments made by railroad management about their workers. As if the workers had no value when it came to whether or not the company made a profit. A work stoppage would show the value that those workers add to the company.

As to the question ... yes, they will list the retroactive wages and bonuses paid and add some text to the quarterly report explaining why the cost of humans was high that quarter. I agree that restating the previous quarters would be troublesome but there may be an attempt to make it clear that the huge spike in pay covers several past years and a prediction of how next quarter will look with the wage increases in effect. Giving the employees a 14% raise won't cause profits to drop 14% but it should have some minor impact.

(For example, UP reported $1.092 billion in compensation and benefits for the 2nd Q 2022 ... $3.774 billion total expenses against total operating revenue of $6.269 billion. It will be interesting to see how much is owed in back pay.)

Mr. Lurker, in the case of the UP, the 10-K is the Annual Report. No longer is there a "coloring book" part of such printed on heavy gauge glossy paper, as there once was for any listed concern.

But on each page of the 10-K where the Financial Statements are reported is the reference "The Accompanying Notes Are An Integral Part Of These Financial Statements".

For Ready Reference:

https://www.up.com/cs/groups/public/@up ... 042022.pdf

Finally, if there is any doubt that UP "cares about its people" the propagandist who designed the current home page at their site sure hasn't gotten that message :

www.up.com

disclaimer: author long UNP

I went with the 10-Q since it was more current.

https://www.npr.org/2022/09/17/11236296 ... d-a-strike

NPR interviewed with BLET president Dennis Pierce on their Weekend Edition Saturday program this weekend. Transcript is on the page but it's worth listening to the audio. It's not over until the rank-and-file vote for it.

Gilbert B Norman wrote:

BandA wrote: ↑Sat Sep 17, 2022 12:46 pm How does accounting deal with retroactive pay increases?

Mr. B&A, "been there done that".

Retroactive pay is simply booked when paid. Such would likely be "immaterial" to any reportable Financial Statements, however there could be a footnote within the Notes.

Restated Financial Statements ALWAYS "raise the Red Flags".

Would there be any benefit to doing an accrual for retro if you know it's likely?

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Second verse, same as the first:

Maintenance of Way Union rejects deal, renewing strike possiblity

The third largest railroad union rejected its deal with freight railroads Monday — renewing the possibility of a strike that could cripple the economy — but before that could happen both sides will return to the bargaining table.

About 56% of the track maintenance workers represented by the Brotherhood of Maintenance of Way Employes Division union who voted opposed the five-year contract even though it included 24% raises and $5,000 in bonuses. Union President Tony Cardwell said the railroads didn’t do enough to address worker concerns about the lack of paid time off — particularly sick time — and demanding working conditions after the major railroads eliminated nearly one-third of their jobs over the past six years.

“Railroaders are discouraged and upset with working conditions and compensation and hold their employer in low regard. Railroaders do not feel valued,” Cardwell said in a statement. “They resent the fact that management holds no regard for their quality of life, illustrated by their stubborn reluctance to provide a higher quantity of paid time off, especially for sickness.”

Even though there are tentative agreements with four of the smaller groups, if one strikes, all 12 go on strike. Less clear if they'd lock-out anyone with an agreement or just the BMWED and anyone else who hasn't settled.

By rejecting the deal, the BMWED will return to negotiations with railways, entering a “status quo” period where unions cannot strike until Nov. 19, five days after Congress reconvenes, the BWMED stated.

Conveniently, this is after the elections. A lame duck House might be willing to do what they weren't willing to do in the lead up to the mid-terms 28 days from now.

1. Did the BMWED leadership think that their workers were going to agree to the tentative contract? Did they do an informal poll? 1st rule is to not call the vote until you are sure of the result.
2. So everyone else has a signed contract - that's what they get even if the BMWED get something sweeter?
3. If the RR thinks they can operate without BMWED they might not lock out the other unions, but it is a risk that pickets, job actions, wildcat job actions, occupations, even sabotage might occur on premises, so they would probably just lock everyone out.
4. A 39 day bargaining period until Nov 19 seems like a generous length of time... i'm guessing the union bylaws allow the leadership to offer it, that it's not part of some federal law.

It's also possible that BMWED continues to negotiate without taking action at this time.

Taking this to a strike and a likely imposed settlement by Congress might undo whatever gains the smaller contracts were able to attain that were unique and valuable to those smaller workgroups.