(Reuters distributed the following article on November 6.)
MONTREAL — Canadian National Railway Co. expects to cut 122 jobs once it completes its takeover of Great Lakes Transportation LLC, CN said on Wednesday in a filing to the U.S. Surface Transportation Board.
CN, Canada’s largest railway and North America’s No. 5, said most of the layoffs, which represent 12 percent of Great Lakes total workforce, will be among administrative workers.
Machinists, electricians and train dispatchers will also lose some jobs, but train and engine service employees should not be affected, the company said.
Montreal-based CN, which has more than 23,000 employees in total, agreed last month to pay $380 million (C$500 million) to buy Great Lakes to boost its rail link between western Canada and the United States and forge new ties with the U.S. steel industry.
CN had said earlier it expected the integration of Great Lakes to add C$285 million to its annual revenues of more than C$6 billion.
CN also said the acquisition would boost its annual profit by 10 Canadian cents a share in the first three years, and then by 20 Canadian cents once all the cost cuts have been made.
Under the deal, CN will acquire two small railroads, a switching company and a fleet of Great Lakes vessels from Monroeville, Pennsylvania-based Great Lakes. Great Lakes is controlled by private equity investment firm Blackstone Group.
The deal, expected to be completed by the middle of 2004, includes the small Duluth, Missabe and Iron Range Railway Co. which carries pelletized iron ore in the United States, and the Bessemer and Lake Erie Railroad Co., which carries coal, iron ore and limestone between Lake Erie and steel mills in the Pittsburgh, Pennsylvania, area.