(The following article by Rip Watson was distributed by Bloomberg News. It was posted on the Montreal Gazette website on November 12.)
MONTREAL — Canadian National Railway Co., Canada’s biggest railway, expects to boost earnings per share at least 10 per cent next year and revenue by as much as 5 per cent, chief executive Hunter Harrison said.
Harrison, speaking at an investor conference, said Canadian National “was targeting double-digit (earnings per share) growth” without elaborating. Canadian National, based in Montreal, is forecast to earn $5.21 Canadian a share this year, and $6.05 next year, the average of analysts polled by Thomson Financial.
The revenue growth estimate excludes the effect of currency- exchange rates, Harrison said.
As much as 60 per cent of Canadian National’s revenue is in U.S. dollars, which have fallen 20 per cent this year against their Canadian counterpart.
Canadian National expects a decision in two to three weeks on whether it won the bidding for BC Rail Ltd., which is owned by the province of British Columbia, Harrison said.
The other bidders are Canadian Pacific Railway Ltd. and a venture of Burlington Northern Santa Fe Corp. and closely held Omnitrax Inc.
Harrison also said Canadian National is in talks with unions that represent Canadian train-crew workers to change the basis of pay for workers from miles travelled, an industry standard for a century, to hours worked.
Changing the pay basis could allow Canadian National to cut its crew workforce by 30 per cent to 35 per cent, he said, because trains move faster today.
The company has about 4,700 train crew workers in Canada, spokesman Mark Hallman said.
The railway changed to hourly pay in contracts that cover about 1,800 workers on its U.S. lines over the past year and is in talks with unions representing an additional 525 U.S. workers to change the work standard from miles to hours.
Gilles Hallé, Canadian director for the Brotherhood of Locomotive Engineers, which represents CN workers, said the railway has to convince the union that its plan to switch from a mileage-based system to an hourly system would benefit workers.
“We told them we’re not interested,” Hallé said in an interview. “We will not work 12 hours a day, 6 days a week.”