(Bloomberg News circulated the following article by Reg Curren on May 13.)
CALGARY — The union representing 1,700 locomotive engineers at Canadian National Railway Co., the country’s biggest railroad, said it plans to strike on May 18.
Contract talks broke down yesterday, prompting the Teamsters Canada Rail Conference to set a strike date, the union said in a statement today.
Canadian National agreed in March to resume talks this month after the company and union agreed to postpone any work stoppage until at least May 12. The railway in February reached a tentative agreement with the United Transportation Union, whose 2,520 members work with engineers on trains.
“There is hope they can still reach an agreement,” said analyst Fadi Chamoun of UBS Ltd. in Toronto. “These are people that are very difficult to replace with administrative or management staff.”
A 28-day strike last year by 5,000 clerical and cargo terminal workers cost the company C$24 million ($19 million), or 8 cents a share.
Shares of Canadian National fell C$1.01, or 1.4 percent, to C$72.35 by 4:05 p.m. in trading on the Toronto Stock Exchange.
Unresolved contract issues include the company’s plan to eliminate a bonus plan based on efficiency gains made by engineers and work and rest rules, union President Gilles Halle said in a telephone interview.
“We may meet Monday or Tuesday,” Halle said. “The federal government appointed two mediators today who’ve asked us to meet.”
Separately, the company signed a new labor contract with 55 locomotive engineers who work in northern Quebec.
Canadian National also expects to receive later this month results of a rank-and-file vote on a tentative agreement with 644 electrical workers represented by the International Brotherhood of Electrical Workers, company spokesman Mark Hallman said in an interview.
The company, which employs 22,400 people in Canada and the U.S., has “contingency plans” in place, including using non- union staff who’re received engineer training, to keep its main cargo operation working, Hallman said.
“We’re optimistic we can reach a settlement with the union, without labor disruption,” Hallman said.
No new negotiations have been scheduled, Hallman said.