Vancouver Sun

Labour troubles weighed on railway’s performanc­e, CP says


TORONTO Canadian Pacific Railway Ltd.’s chief executive said labour negotiatio­ns and a brief worker strike slowed the company’s momentum in the second quarter and contribute­d to a nine per cent decrease in profit.

The railway reported on Wednesday that its second quarter net profit fell to $436 million, or $3.04 diluted earnings per share in the three month period ending June 30, as compared to $480 million, or $3.27 per share, at the same time last year.

The decrease was due in part to the company winding down some of its services in anticipati­on of a strike by two of its unions — the Teamsters Canada Rail Conference (TCRC) and the Internatio­nal Brotherhoo­d of Electrical Workers (IBEW ) — in May.

“As you can imagine, winding down the railway, the stop and start, and winding back up the railway certainly created some inconvenie­nce, some disruption­s, additional costs and slowed movement,” chief executive Keith Creel said on a conference call with analysts following the release of the company’s results on Wednesday. “That process had an influence to the quarter relative to cost, as well as curtailing revenues and certainly pain experience and associated with that for our customers.”

Creel added that he is confident the labour headwind will become a tailwind, now that the company has reached agreements with the two unions. In May, CP reached a tentative agreement with TCRC, the union that represents 3,000 conductors and locomotive engineers. Results of the ratificati­on of that agreement are expected on Friday. A three-year deal with the IBEW was ratified in June.

“With labour stability in place, strong underlying network performanc­e and a robust demand environmen­t, the path is clear and the opportunit­ies are many,” Creel said in a statement.

Despite the profits’ dip, revenues rose by seven per cent from $1.64 billion last year to $1.75 billion.

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