(Bloomberg News circulated the following article by Rob Delaney on April 2.)
TORONTO — Maintenance workers at Canadian Pacific Railway Ltd. may strike this month after their union failed to reach an agreement with the country’s second-biggest railway on a new contract.
The union, representing 3,000 workers, will be able to strike as early as April 25 after negotiators failed to reach an agreement to replace a four-year labor contract that expired Dec. 31, said William Brehl, president of Teamsters Canada Rail Conference, Maintenance of Way Employees Division. Talks ended March 30.
“I don’t consider us far apart, but the railroad considers us miles apart,” Brehl said in a telephone interview. The workers, who inspect rails to prevent accidents, want a 4 percent wage increase annually over four years, he said.
The Calgary-based railroad is offering 3 percent a year for 2007, 2009 and 2010, and a 4 percent increase in 2008, which four unions representing more than 4,000 employees have accepted in their current contracts, company spokesman Mark Seland said.
A strike may hamper sales, which were hurt in the first quarter by avalanches and rock slides. The railroad was counting on increased coal shipments to make up for damage-related losses and boost income by as much as 6 percent this year, Chief Executive Officer Fred Green, 50, said at a JPMorgan Chase & Co. conference in New York on March 22.
No further discussions have been scheduled with the union on this matter, the company said in a release today.
“We need to prepare ourselves to maintain the railroad if a difficult situation arises” in terms of labor action, Green said March 22.
Shares of Canadian Pacific rose 28 cents to C$65.23 at 4:10 p.m. in Toronto Stock Exchange composite trading. The stock gained 12 percent in the past year.
Canadian Pacific on March 21 affirmed its 2007 earnings forecast of C$4.30 to C$4.45 ($3.72 to $3.85) a share after Fording Canadian Coal Trust said it will increase coal shipments this year.