Canadian Pacific (TSX:CP)(NYSE:CP) is disappointed to announce that negotiations with Teamsters Canada Rail Conference-Running Trades (TCRC) have broken down without an agreement. As a result, the TCRC have indicated they will strike as of 12:01 a.m. on February 15, 2015. TCRC represents CP's approximately 3,000 active locomotive engineers and conductors.
CP proposed thoughtful, compelling and fair options including wage increases and improved benefit plans. Furthermore, CP proposed changes to work schedules to improve the quality of life for engineers and conductors. TCRC leadership claims that lack of time off is at the heart of its reluctance to negotiate, yet 72 percent of all engineers and conductors do not take the time off they are entitled to. Furthermore, 60 percent of the conductors and engineers at CP make between $80,000 and $160,000, while working an average of 31 to 35 hours a week.
"We have wanted to make a deal for more than a year, and have been presenting the TCRC leadership with dynamic options and choices to improve the quality of life for employees while driving efficiencies in our business," said E. Hunter Harrison, CP's Chief Executive Officer. "Our conductors and engineers have plenty of options for time off, but the vast majority don't take full advantage of those opportunities. We want to implement a model that allows us to properly schedule crews while maintaining the highest standards of safe railroading."
While CP would have preferred a negotiated settlement, at the urging of the Minister of Labour, the railroad agreed to immediate mediation and arbitration to avoid a work disruption. Unfortunately, the TCRC did not agree.
"Strikes have serious and lasting impacts on individuals, families, communities and the overall economy," Mr. Harrison said. "While we are disappointed with where we are and the timing of this strike – during a downturn in the Canadian economy – we will continue to forge ahead. I want to personally thank the Minister of Labour, Kellie Leitch, and the federal mediation service for their hard work in trying to break this logjam."
CP will implement its extensive contingency plan by deploying qualified management employees to operate reduced freight service on its Canadian network. CP is working with its customers to advise them as to how this work stoppage will affect them. Customers should contact their account managers and CPs customer station for information about shipments.
On February 14, CP announced a tentative four-year agreement with its Unifor employees. Details of the tentative agreement are being withheld pending ratification by the Unifor membership.
This news release contains certain forward-looking information within the meaning of applicable securities laws relating, but not limited to, purchases of common shares for cancellation under CP's share repurchase program and future sources of capital. This forward-looking information also includes, but is not limited to, statements concerning expectations, beliefs, plans, goals, objectives, assumptions and statements about possible future events, conditions, and results of operations or performance. Forward-looking information may contain statements with words or headings such as "financial expectations", "key assumptions", "anticipate", "believe", "expect", "plan", "will", "outlook", "should" or similar words suggesting future outcomes.
Undue reliance should not be placed on forward-looking information as actual results may differ materially from the forward-looking information. Forward-looking information is not a guarantee of future performance. By its nature, CP's forward-looking information involves numerous assumptions, inherent risks and uncertainties that could cause actual results to differ materially from the forward-looking information, including but not limited to the following factors: changes in business strategies; general North American and global economic, credit and business conditions; risks in agricultural production such as weather conditions and insect populations; the availability and price of energy commodities; the effects of competition and pricing pressures; industry capacity; shifts in market demand; changes in commodity prices; uncertainty surrounding timing and volumes of commodities being shipped via CP; inflation; changes in laws and regulations, including regulation of rates; changes in taxes and tax rates; potential increases in maintenance and operating costs; uncertainties of investigations, proceedings or other types of claims and litigation; labour disputes; risks and liabilities arising from derailments; transportation of dangerous goods; timing of completion of capital and maintenance projects; currency and interest rate fluctuations; effects of changes in market conditions and discount rates on the financial position of pension plans and investments; and various events that could disrupt operations, including severe weather, droughts, floods, avalanches and earthquakes as well as security threats and governmental response to them, and technological changes. The foregoing list of factors is not exhaustive.
These and other factors are detailed from time to time in reports filed by CP with securities regulators in Canada and the United States. Reference should be made to "Management's Discussion and Analysis" in CP's annual and interim reports, Annual Information Form and Form 40-F. Readers are cautioned not to place undue reliance on forward-looking information. Forward-looking information is based on current expectations, estimates and projections and it is possible that predictions, forecasts, projections, and other forms of forward-looking information will not be achieved by CP. Except as required by law, CP undertakes no obligation to update publicly or otherwise revise any forward-looking information, whether as a result of new information, future events or otherwise.
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