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Auto industry urges Congress to intervene to avoid rail strike

Auto industry urges Congress to intervene to avoid rail strike
Danielle Emerson
Automotive News | December 1, 2011 – 2:31 pm EST
UPDATED: 12/1/11 3:09 pm ET

DETROIT — Seven auto industry organizations, including the National Automobile Dealers Association and Specialty Equipment Market Association, sent a letter today to congressional leaders in a plea to prevent a rail strike from occurring next week.

“It is critical that Congress intervene to prevent a rail strike and significant economic disruption if railroad management and labor unions cannot reach agreement by the end of the statutory cooling-off period, which ends at 12:00 am on Tuesday, December 6,” the letter said.

Libby Krum, a spokeswoman with the American International Auto Dealers Association — which also signed the letter to Congress — said the organization is optimistic a resolution will be found.

“We’re hopeful that will happen,” she said. “And that the government and all Americans will … take the industry seriously and step in if necessary to reach a fair resolution for all parties involved.”

Krum said roughly 500,000 employees in the international manufacturer and dealer industry alone could be affected.

“This could really have a tremendous negative effect on the economy at a time when it’s not needed,” she said.

Previous media reports have said a national railroad strike would cost the U.S. economy as much as $2 billion a day.

A strike was first averted in mid-September when a 30-day delay was placed on workers. In October, President Barack Obama stepped in to prevent a strike from happening for at least 60 days and appointed a board to review the dispute between U.S. freight railroads and most of its unions.

The automobile organizations sent their letter to House Speaker John Boehner, R-Ohio; Senate Majority Leader Harry Reid, D-Nev.; House Minority Leader Nancy Pelosi, D-Calif.; and Senate Minority Leader Mitch McConnell, R-Ky., hoping Congress can this time impose the terms recommended by the Presidential Emergency Board to help avert a strike.

Resolutions were introduced today by Reid and House Transportation Committee Chairman Rep. John Mica, R-Fla. Reid’s resolution would extend the time of negotiations until Feb. 8, 2012, while Mica’s resolution would force sides to accept recommendations made by the president’s board through 2014.

General Motors Co. and Ford Motor Co. also have stepped in and sent letters to Congress urging action.

“A national disruption in rail delivery services would have a devastating impact on Ford and the auto industry’s ability to move critical parts into our plants,” Peter Lawson, Ford vice president for government relations wrote, The Detroit News reported.

In its letter to Congress, Robert Ferguson, GM’s vice president of global public policy, said his company alone ships about 9,000 vehicles daily in North America, most of which travel on U.S. railroads.

“A strike or partial strike would limit the ability to move parts and supplies into our assembly centers and could immediately begin to impact production at several high volume assembly plants,” he wrote.

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