(The following story by Nicolas Van Praet appeared on The Montreal Gazette website on March 20.)
MONTREAL — A four-week strike that crippled container traffic at Canadian National Railway Co., triggered layoffs at crop producers and caused widespread uncertainty for exporters, is over.
Striking CN workers approved a new deal during ratification votes this week, the Canadian Auto Workers union confirmed yesterday. They’ll be back at work starting today, exactly one month after they walked off the job.
“We want to put this strike behind us and get on with running the railroad,” said CN spokesperson Mark Hallman.
The 5,000 cargo loaders, clerical workers and mechanics approved a deal that will give them a $1,000 back-to-work bonus and wage increases of three per cent per year over three years. The agreement also temporarily scrapped a new disciplinary system. Workers had been off the job since Feb. 20. Their strike slowed cargo delivery from coast-to-coast along CN’s rail network.
Almost all the damage was felt at the firm’s so-called intermodal terminals where cargo is switched between trucks and trains. Managers and retired workers filled in for strikers. But truckers endured lengthy waits to enter the yards.
In some places, like Manitoba, intermodal traffic was slowed so much that CN clients such as specialty-crop growers couldn’t get their products out and were forced to initiate partial shutdowns of their operations and lay off staff.
Some importers and exporters had trouble shipping goods. Food companies were also affected because the railway could not guarantee food would be shipped at the right temperature. One Montreal manufacturer reportedly lost $100,000 worth of business a week because it couldn’t transport its product.
“Concern continued to grow over the life of the strike,” said Bob Ballantyne, president of the Canadian Industrial Transportation Association, which represents a wide variety of shippers from paper producers to margarine makers. “Everybody’s obviously pleased that there’s a settlement.”
Hallman said CN has no traffic backlog and is focused on ramping back up to full operation. He said the railway has no immediate plans to indicate how much it was hurt financially by the walkout.
CN’s stock price did not change much throughout the strike, declining three per cent. Investors appear more concerned with the longer-term earnings potential of the company. CN shares closed yesterday at $51.67, down 25 cents.
Morgan Stanley analyst John Valentine said in a research note the strike could poke a 13-cents-per-share hole in CN earnings for 2004. He changed his earnings estimate to $3.85 per share for the year. Another analyst pegged the loss at between 15 and 30 cents a share.
The big question is just how many of CN’s container customers that ditched the railway will return and how quickly.
The strike started after CAW members, representing nearly one-third of the railway’s Canadian work force, rejected an earlier offer by CN despite a recommendation by union leaders that they accept it. One union official acknowledged labour leaders had underestimated the workers’ resolve to fight for better working conditions, particularly changes to the disciplinary system.