CP unions want answers
No breakdown yet on coming 4,500 job cuts
As news of Canadian Pacific’s aggressive cost-cutting plan drove shares in the railroad to a 52-week high Wednesday, unions representing CP employees said they want to know exactly who is being targeted by the announced job losses.
At an investor conference in New York on Tuesday, Canadian Pacific said it would eliminate 4,500 jobs — nearly a quarter of its workforce — by 2016. About 1,700 of those jobs, some of which have been eliminated already, are expected to be gone by yearend.
CP has not provided a breakdown of what positions will be eliminated or where they are located. Spokesperson Ed Greenberg said the majority will be accomplished through not replacing retiring employees and by hiring fewer contractors.
On Wednesday, several of the unions representing CP employees complained they are still in the dark about what’s happening.
“We found out through the newspaper, so that’s our chief concern,” said Nathalie Lapointe, staff representative for United Steelworkers, which represents approximately 800 clerical and intermodal CP employees. “That’s not the way we used to deal with CP. We used to know ahead of time when stuff like that was happening.”
Doug Finnson, vice-president of the Teamsters Canada Rail Conference — which represents nearly 5,000 conductors, yardmen, locomotive engineers, and railway traffic controllers — said he wished the announcement had been made in Calgary and not New York.
“If they were here, I’d be downtown sitting at the front door of (CP headquarters) Gulf Canada Square,” Finnson said. “First of all, asking, ‘Who are you talking about, and have you talked to their union?’ ... If it’s anything to do with the Teamsters Union, they have an obligation to sit down and negotiate with us.”
Both Finnson and Lapointe said they believe the majority of cuts won’t involve their unions but will instead affect middle managers, many of whom are close to retirement age. But they said without hearing directly from the company, they don’t know for sure.
“They (employees) are stressed out. Nobody knows if they’ll still have a job tomorrow,” Lapointe said.
While speaking at the investor conference, company CEO Hunter Harrison said CP has an older workforce with an attrition rate of eight to nine per cent. He said over the course of his four-year plan, there’s potential for 5,700 people to leave the organization and not be replaced.
“We do not want to lose good people. When you’ve got talent, you protect it,” Harrison said. “We’ve said to people this: If you’re willing to be cross-trained in another discipline, if you’re mobile as far as being able to move, we’ve got work for you and hopefully they will be able to take advantage of that.”
About seven employees at the vice-president level and above have left already and Harrison said he does not see having to fill those positions.
“One of my evaluations initially was that we were clearly, in my view, top heavy,” Harrison said.
The cuts are part of a plan to increase annual revenue growth between four and seven per cent from 2012 levels as well as reduce the railroad’s full-year operating ratio — a closely watched measure of how much revenue is required to run the business — to the mid-60s range by 2016.
The company also plans to move its headquarters out of downtown Calgary and to the nearby Ogden rail yard by 2014.
The strategic moves are the latest for the railway since a new board of directors installed Harrison — a veteran railroader and the former top boss at rival Canadian National Railway Co. — as its chief executive in the summer following a bitter proxy fight with the company’s largest shareholder.
Shares in Canadian Pacific closed up about four per cent to $96.82 on the Toronto Stock Exchange, marking a new 52-week high as investors responded positively to the announcements.