(Reuters circulated the following story by Charles Grandmont on March 2.)
MONTREAL — Canadian National Railway Co. said Tuesday it will resume contract talks with the union representing 5,000 striking workers Wednesday at the request of government mediators.
About a quarter of CN’s workforce went on strike on Feb. 20 after rejecting an offer for an annual 3 percent pay increase.
CN, Canada’s biggest railway and No. 5 in North America, upped its offer on Friday with an incentive plan and a one-time signing bonus.
The Canadian Auto Workers union, which represents the striking maintenance, clerical and container yards workers, is currently conducting informal consultations with its members on the latest proposals from the company.
But the union said it could not submit the offer to a vote because it did not address key issues such as management treatment of workers on disciplinary questions, improvements to retirement and social benefits, and shift premiums.
The strike has caused delays across CN network, especially in the intermodal yards where containers are loaded between trains and trucks.
“We believe CN’s network is running at 85 percent of capacity, although this number is likely to deteriorate as the strike drags on,” said Merrill Lynch analyst Ken Hoexter in a research note Tuesday.
“The domestic intermodal business is witnessing the greatest impact as it posted a 24 percent decrease in carloads as we believe a majority of the intermodal business is being diverted to truck,” said the analyst, who has a “buy” recommendation on CN stock.
Grain shippers said Tuesday the strike was having little impact on their operations.
“Grain is moving,” said Louise Waldman, a spokeswoman for the Canadian Wheat Board, the country’s largest grain shipper.
CN has addressed concerns of shippers, including those of agribusiness company Cargill Ltd., which said the strike had complicated a shortfall of railcars experienced through the winter.
“They’re working really hard for us, late yesterday and today, to get some cars in those spots to start satisfying some of those contracts,” Cargill spokesman Robert Meijer said.
“They’re in the process of walking backwards with us to fix the problem so that we’re current, which is great news,” Meijer said.
CN stock slipped 79 cents to C$52.45 on the Toronto Stock Exchange Tuesday and fell 72 cents to $39.02 in New York.
(Additional reporting by Roberta Rampton in Winnipeg)