(Reuters circulated the following article by Robert Melnbardis on February 18.)
MONTREAL –Canadian National Railway Co. and the union for 5,000 of its workers held contract talks on Wednesday with the help of a federal mediator in efforts to reach a wage agreement and avert a strike set for early Friday.
“Nothing has changed in the situation as of now, but the discussions will continue,” Abe Rosner, national representative with the Canadian Auto Workers (news – web sites) union, told Reuters.
Union and company officials said they expect discussions to resume Wednesday evening.
The union, Canada’s largest private sector bargaining unit, has set a midnight Thursday deadline to reach a tentative pact or begin a strike that analysts say will affect CN’s ability to transport goods.
“A walkout by 5,000 employees in key areas such as car and locomotive maintenance and intermodal operations would, in all likelihood, eventually have a meaningful, adverse impact on CN’s operational capabilities,” Lazard Freres & Co. analyst Jordan Alliger wrote in a research report on Wednesday.
A strike would also likely hurt CN’s earnings, but Alliger said it was too early to offer a forecast on the impact.
The union, which represents shopcraft, clerical and intermodal yard workers at CN, said its members in each of those groups had rejected tentative agreements reached in January, mainly because of monetary issues.
The union members include mechanics who maintain and repair locomotives and other rolling stock, customer service workers and employees who transfer intermodal traffic such as trucking containers from railcars to truck railers.
The proposed three-year contract deals offered yearly salary increases of 3 percent, the union said. The average union member makes about C$45,000 ($34,000) a year.
CN, Canada’s largest railway and No. 5 in North America by revenues, has said that if there is a strike it hopes to maintain freight services through the use of management personnel.
The Montreal-based railway, whose network stretches across Canada and through the United States to the Gulf of Mexico, is a major transporter of grain, minerals and automobiles.
Mark Hallman, spokesman for CN, said the company has not declared “force majeure” on grain or other shipments and does not expect to do so.
Canadian Pacific Railway Ltd., the country’s No. 2, said on Wednesday it will stand by its decision to cancel some shipments without recourse after its lines were hit by severe cold and snow.
Via Rail Canada, the federally owned passenger train service, said on Wednesday it expects its national services to operate normally despite the possibility of a strike at CN. Via runs mainly on CN tracks.
CN shares rose 11 Canadian cents to C$79.35 on the Toronto Stock Exchange, but slipped 45 cents to $59.93 in New York on Wednesday. The stock has risen 25 percent over the past year on solid profits, but is off 1 percent over the past month.
($1=$1.31 Canadian)