May 21st, 2024

Canadian Pacific girds for potential rail strike next month

By Christopher Reynolds, The Canadian Press on April 24, 2024.

A Kansas City Southern locomotive is shown in this undated photo. Canadian Pacific Kansas City reported its first-quarter profit fell compared with a year ago.THE CANADIAN PRESS/HO-Kansas City Southern MANDATORY CREDIT

Canadian Pacific Kansas City Ltd. is preparing for the possibility of a strike by some 3,300 workers next month.

“The way I see it, the positions have not changed a lot,” chief executive Keith Creel told analysts on a conference call Wednesday.

“Obviously hope for the best, but you have to make sure you plan for the worst as well.”

The potential work stoppage helps account for what Creel called a “responsibly conservative” forecast that predicts only a slight uptick in cargo volumes this year.

“If the strike isn’t as long as what we might think would be – or if we don’t have a strike at all – then sure, we’ve got some upside,” the CEO said.

With 6,000 workers at rival Canadian National Railway Co. in talks with their employer as well, there is a possibility of two work stoppages at rail companies this spring, which combined could grind virtually all freight rail traffic in Canada to a halt.

In February, CPKC and CN asked the federal labour minister to appoint a conciliator for the bargaining process over a new collective agreement for train conductors, engineers and yard workers. The notice of dispute started the clock on a possible strike or lockout, which could occur as soon as May 22.

The Teamsters Canada Rail Conference has said safety is at stake, claiming that the country’s two main railways aim to eliminate all “safety-critical rest provisions” from their collective agreements.

“This is just not true, to be very clear,” CN chief network operating officer Patrick Whitehead said Tuesday.

Creel said Canadian Pacific has offered workers a “win-win scenario.”

“But it takes change. It takes leaders that are willing to see the wisdom in it, the benefit in it. And at this point that has not happened,” he said.

On Wednesday, CPKC reported its first-quarter profit fell compared with a year ago.

The Calgary-based operator said it earned net income attributable to controlling shareholders of $775 million or 83 cents per diluted share for the quarter ended March 31. That is down from a profit of $800 million or 86 cents per diluted share a year earlier.

Canadian Pacific completed its acquisition of Kansas City Southern in December 2021, but had to wait to combine operations until April last year following regulatory approval of the deal.

CPKC said revenue for its most recent quarter totalled $3.52 billion, up from $2.27 billion in the same quarter last year before the railways combined operations.

The railway said its core adjusted combined diluted earnings per share amounted to 93 cents in its latest quarter, up from 90 cents a year earlier.

This report by The Canadian Press was first published April 24, 2024.

Companies in this story: (TSX:CP)

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