CN Rail Downgrades Financial Outlook as Result of Strike
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Canadian National Railway is making a quick recovery from the eight-day strike by 3,200 Teamsters Canada Rail Conference conductors and yard crews, according to the Montreal-based railroad.
鈥淥ur discipline on our recovery plan is delivering results,鈥 CEO JJ Ruest said. 鈥淲hile we expect to take some time and we remain dependent on favorable weather, we are pleased by how things are progressing. Safety is at the heart of everything we are doing as we bring our Canadian operations back on line, and we have not experienced any significant setbacks at this point.鈥
Ruest
But the Class 1 railroad downgraded its financial picture for the rest of the year because of the walkout.
In late October, CN said it was expected its adjusted diluted earnings per share growth to be in the high-single-digit range. Now, the company says, as a result of the strike, EPS growth will be in the low- to mid-single-digit range.
The company said the impact of the strike is estimated at (C) 15 cents of EPS.
The sides reached a tentative agreement to end the strike Nov. 26.
Workers began returning almost immediately. The strike began Nov. 19 in a dispute over working conditions and benefits. Details of the tentative deal have not been made public, and a Canadian National official told Transport Topics they will let the union release details on its timetable.
It is expected the ratification process via secret ballot could take as long as eight weeks to complete. This was the first walkout in a decade at the largest railroad in Canada. Workers have been without a contract since July when the previous agreement expired.
As the strike dragged on, the economic impact was felt. Some industry groups were publicly urging newly re-elected Prime Minister Justin Trudeau to issue a back-to-work order, but Trudeau urged the sides to continue negotiations. The union issued a statement thanking him for respecting their right to strike.
Laporte
鈥淧revious governments routinely violated workers鈥 right to strike when it came to the rail industry,鈥 Teamsters Canada President Fran莽ois Laporte said in a statement. 鈥淭his government remained calm and focused on helping parties reach an agreement, and it worked.鈥
According to CN, the railroad carries an estimated C$250 billion in goods annually, including 180,000 barrels of oil a day in September. Before the agreement was finalized, the province of Quebec said in a statement it was facing a severe shortage of propane, which is used extensively in agriculture to dry harvest grain in kilns. Farmers also use propane to heat barns to keep livestock warm. It is estimated 85% of the province鈥檚 propane is shipped by rail.
As Canada鈥檚 only coast-to-coast railroad, CN handles some of Canada鈥檚 biggest exports including lentils, potash, canola, field peas, flax and oats. Much of the cargo is moved by rail from the country鈥檚 sprawling agriculture sector west to the Pacific and east to the Atlantic.
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