CP Rail won’t be ‘held hostage’ in union talks, CEO says
With a strike deadline just days away, Canadian Pacific Railway Ltd. chief executive Keith Creel said the company will not be “held hostage” in negotiations and is willing to experience the shortterm pain of a strike in order to ensure long-term sustainability.
“CP cannot be put in a position where we’re held hostage,” Creel told analysts on a conference call Wednesday following the release of the company’s first quarter results.
“We can’t take a position that’s going to destroy our long-term ability to be on solid financial footing, to be able to run this company. … If it means that we have to experience short-term pain to avoid that long-term damage, then that’s my fiduciary responsibility to all stakeholders, and we’re going to uphold that.”
Two unions representing around 3,400 CP workers served the company with a 72-hour strike notice on Wednesday, citing a lack of progress at the bargaining table.
Teamsters Canada Rail Conference (TCRC), which represents around 3,000 conductors and locomotive engineers, said negotiations with CP were set to resume on Wednesday. If the two parties cannot reach a settlement, the union said about 3,000 workers will go on strike at 12:01 a.m. on April 21. CP could also see 366 members of the International Brotherhood of Electrical Workers (IBEW ) walk off the job on Saturday. On April 12, 98.3 per cent of the IBEW’s members voted to authorize strike action.
Creel’s comments came as CP saw its net profit fall nearly 20 per cent in the three month period ending March 31, due to what the railroad said was unexpected demand growth and harsh weather conditions.
CP’s net profit fell 19.3 per cent from $431 million, or $2.93 per diluted share, in the three-month period ending March 31 to $348 million, or $2.41 per diluted share.
CP’s operating ratio — a measure of railway efficiency that calculates operating costs as a percentage of revenues — increased 510 basis points from the same time last year to 67.5 per cent, due to demand and weather-related challenges.
Canadian railways have been working to alleviate a grain backlog that has infuriated farmers and prompted government scrutiny. Many organizations, including the Alberta Wheat and Barley Commission, are concerned that a strike “could cause devastating consequences.”
“If a strike were to take place, farmers who can only access the CP line would have no other options to move their grain and would have to wait until rail is moving again to be paid,” said AWC chair Kevin Bender in a statement.
Alberta Barley Chair Jason Lenz called for immediate government intervention “to make sure that an already difficult situation with grain movement by rail does not worsen.”
Creel told investors that he had spoken with Minister of Labour Patricia Hajdu and Transport Minister Marc Garneau about the ongoing negotiations on Wednesday, and said both ministers “expressed commitment to the collective bargaining process” and were “encouraging the parties to reach a settlement.”