CN Asks Federal Government to Order Binding Arbitration to Protect Canada’s Economy
CN (TSX: CNR) (NYSE: CNI) has formally requested government intervention under section 107 of the Canada Labour Code due to a lack of progress in negotiations with the Teamsters Canada Rail Conference (TCRC). The company is seeking binding arbitration to resolve the labour conflict and protect Canada's economy from prolonged uncertainty.
CN warns of a potential phased network shutdown starting August 22nd if no progress is made. The company has made four offers to the TCRC since January, including proposals on wages, rest, and labour availability, all of which were rejected. CN emphasizes the need for predictability in supply chains and highlights the potential impact on consumers and workers across Canada.
CN (TSX: CNR) (NYSE: CNI) ha formalmente richiesto l'intervento del governo ai sensi della sezione 107 del Codice del Lavoro canadese a causa della mancanza di progressi nelle trattative con il Teamsters Canada Rail Conference (TCRC). L'azienda sta cercando un arbitrato vincolante per risolvere il conflitto sindacale e proteggere l'economia canadese da un'incertezza prolungata.
CN avvisa di una potenziale chiusura progressiva della rete a partire dal 22 agosto se non si registrano progressi. L'azienda ha presentato quattro offerte al TCRC da gennaio, comprese proposte su stipendi, riposo e disponibilità lavorativa, tutte rifiutate. CN sottolinea la necessità di prevedibilità nelle catene di approvvigionamento e mette in evidenza il potenziale impatto su consumatori e lavoratori in tutto il Canada.
CN (TSX: CNR) (NYSE: CNI) ha solicitado formalmente la intervención del gobierno bajo la sección 107 del Código Laboral de Canadá debido a la falta de avances en las negociaciones con el Teamsters Canada Rail Conference (TCRC). La empresa busca un arbitraje vinculante para resolver el conflicto laboral y proteger la economía canadiense de una incertidumbre prolongada.
CN advierte sobre un posible cierre progresivo de la red a partir del 22 de agosto si no se logran avances. La empresa ha hecho cuatro ofertas al TCRC desde enero, incluyendo propuestas sobre sueldo, descanso y disponibilidad laboral, todas rechazadas. CN enfatiza la necesidad de previsibilidad en las cadenas de suministro y destaca el impacto potencial en consumidores y trabajadores en todo Canadá.
CN (TSX: CNR) (NYSE: CNI)는 Teamsters Canada Rail Conference (TCRC)와의 협상에서 진전이 없음을 이유로 캐나다 노동법 제107조에 따라 정부의介入을 공식 요청했습니다. 회사는 노동 갈등을 해결하고 캐나다 경제를 장기적인 불확실성으로부터 보호하기 위해 구속력 있는 중재를 요구하고 있습니다.
CN은 아무런 진전이 없을 경우 8월 22일부터 시작되는 잠재적인 단계적 네트워크 중단 가능성을 경고하고 있습니다. 이 회사는 1월 이후 TCRC에 대해 네 번의 제안을 했으며, 여기에는 임금, 휴식 및 노동 가능성에 대한 제안이 포함되어 있었지만 모두 거부되었습니다. CN은 공급망의 예측 가능성이 필요하다고 강조하며 캐나다 전역의 소비자와 근로자에게 미칠 잠재적인 영향에 대해 강조하고 있습니다.
CN (TSX: CNR) (NYSE: CNI) a formellement demandé l'intervention du gouvernement en vertu de l'article 107 du Code canadien du travail en raison d'un manque de progrès dans les négociations avec le Teamsters Canada Rail Conference (TCRC). L'entreprise cherche un arbitrage contraignant pour résoudre le conflit de travail et protéger l'économie canadienne d'une incertitude prolongée.
CN met en garde contre un potentiel arrêt progressif du réseau à partir du 22 août si aucun progrès n'est réalisé. L'entreprise a fait quatre offres au TCRC depuis janvier, incluant des propositions sur les salaires, le repos et la disponibilité du travail, qui ont toutes été rejetées. CN souligne la nécessité de prévisibilité dans les chaînes d'approvisionnement et met en avant les impacts potentiels sur les consommateurs et les travailleurs à travers le Canada.
CN (TSX: CNR) (NYSE: CNI) hat formell um die Intervention der Regierung gemäß Abschnitt 107 des kanadischen Arbeitsgesetzbuchs gebeten, da es keine Fortschritte in den Verhandlungen mit der Teamsters Canada Rail Conference (TCRC) gibt. Das Unternehmen strebt ein verbindliches Schiedsverfahren an, um den Arbeitskonflikt zu lösen und die kanadische Wirtschaft vor langanhaltender Unsicherheit zu schützen.
CN warnt vor einem möglichen stufenweisen Shutdown des Netzwerks, der am 22. August beginnen könnte, wenn es zu keinen Fortschritten kommt. Das Unternehmen hat seit Januar vier Angebote an die TCRC unterbreitet, einschließlich Vorschlägen zu Löhnen, Ruhezeiten und Verfügbarkeit der Arbeitskräfte, die alle abgelehnt wurden. CN betont die Notwendigkeit von Vorhersehbarkeit in den Lieferketten und hebt die potenziellen Auswirkungen auf Verbraucher und Arbeitnehmer in ganz Kanada hervor.
- CN's proactive approach in seeking government intervention to resolve the labour dispute
- Company's willingness to engage in binding arbitration for a fair resolution
- Multiple offers made to TCRC, demonstrating flexibility in negotiations
- Current average earnings for conductors ($121,000) and locomotive engineers ($150,000) in 2023
- Lack of progress in negotiations with TCRC, potentially leading to a labour disruption
- Possible phased shutdown of CN's network starting August 22nd
- Risk of supply chain disruptions and economic impact across Canada
- Rejection of all CN's offers by the union, including the binding arbitration proposal
Insights
The ongoing labor dispute between CN and the TCRC is reaching a critical point, with significant implications for Canada's economy. CN's request for government intervention through binding arbitration signals a breakdown in negotiations and heightened risk of a work stoppage.
Key points to consider:
- CN's willingness to accept binding arbitration suggests confidence in their position and desire to avoid disruption.
- The union's rejection of multiple offers, including arbitration, indicates a strong stance on their demands.
- A potential lockout on August 22nd could have severe economic consequences, particularly for industries reliant on rail transport.
- Current average earnings (
$121,000 for conductors,$150,000 for engineers) are substantial, which may impact public perception of the dispute.
This situation poses significant risks to CN's operations and potentially its stock price in the short term. Investors should closely monitor developments, as a resolution or escalation could lead to volatility in CN's stock.
The potential shutdown of CN's network poses a significant threat to Canada's economy. Rail transportation is important for many industries and disruptions could lead to widespread supply chain issues. Key economic impacts to consider:
- Increased costs for businesses relying on rail transport, potentially leading to higher consumer prices.
- Possible job losses in affected industries if the dispute continues.
- Negative impact on Canada's GDP growth if the shutdown occurs.
- Potential loss of international trade competitiveness due to logistics disruptions.
The government's intervention could be seen as a positive step towards resolution, but uncertainty remains. Investors should consider the broader economic implications beyond CN itself, as this dispute could affect multiple sectors and the overall Canadian market sentiment.
This labor dispute highlights the critical role of rail infrastructure in Canada's transportation network. Key industry implications include:
- Potential shift to alternative transportation modes (e.g., trucking), benefiting companies in those sectors.
- Increased focus on automation and technology to reduce reliance on labor disputes.
- Possible regulatory changes to prevent future disruptions in essential transportation services.
- Long-term impact on CN's relationships with customers and its competitive position.
While CN faces short-term challenges, the company's strong market position and essential role in Canada's economy suggest long-term resilience. However, investors should consider the potential for market share loss to competitors and the costs associated with resolving the dispute. The outcome may set precedents for future labor negotiations in the transportation sector.
Absence of Progress at the Negotiating Table Requires Immediate Action
MONTREAL, Aug. 09, 2024 (GLOBE NEWSWIRE) -- Following the Canada Industrial Relations Board’s (CIRB) decision that does not bring the labour conflict any closer to a resolution, CN (TSX: CNR) (NYSE: CNI) is formally requesting the Minister of Labour’s intervention under section 107 of the Canada Labour Code to protect Canada’s economy from the impacts of prolonged uncertainty.
Negotiations with the TCRC resumed on Wednesday. However, no progress has been made as the TCRC has not engaged meaningfully at the negotiating table.
While CN is willing to keep negotiating with the TCRC, the Company has lost faith in the process and is concerned that a negotiated deal is no longer possible without a willing partner. Therefore, the Company formally requests the Minister of Labour’s intervention.
Unless there is immediate and meaningful progress at the negotiating table or binding arbitration, CN will have no choice but to begin a phased and progressive shutdown of its network, starting with embargoes of hazardous goods, which would culminate in a lockout at 00:01 Eastern Time on August 22nd.
Since the beginning of the year, CN has made four offers to the TCRC. The offers included points on wages, rest, and labour availability while remaining fully compliant with the government-mandated rules overseeing duty and rest periods. None of CN's offers compromised safety in any way. The latest offer proposed third-party arbitration. The union rejected all offers and has made no counter-proposals.
Supply chains require predictability to function properly. Unfortunately, even the possibility of an unpredictable labour disruption and subsequent disorderly shutdown creates a safety risk and unacceptable uncertainty for industries that depend on rail. Prolonged uncertainty will impact consumers and workers across industries and across Canada.
Background on 2024 Negotiations and Offers
In January, CN offered the TCRC a modernized agreement that protected safety and acquired rights while improving work/life balance, which was refused.
The offer was then improved in April with a focus on better wages, job security, and guaranteed earnings for employees. The TCRC refused the improved offer.
In May, CN then presented a simplified offer within the framework of the existing agreement, which the TCRC also refused.
In the absence of a path forward, CN offered to submit to binding arbitration in June. Binding arbitration is a process where both parties empower a mutually agreed upon independent arbitrator to determine the terms of a settlement. It is an impartial approach that would achieve a resolution while avoiding a costly disruption to supply chains, Canadians, and the Canadian economy. The TCRC refused this offer.
All of the information regarding the offers, including details on the proposed wages, rest, and labour availability, is available here.
Current Rest and Wages
Rest:
- By combining Duty and Rest Period Rules (DRPR), paid sick days, personal leave days, and existing rest and vacation provisions in their collective agreements, conductors and locomotive engineers currently work approximately 160 days a year.
Wages:
- In 2023, the average conductor earned approximately
$121,000 , not including pension and medical benefits. - In 2023, the average locomotive engineer earned approximately
$150,000 , not including pension and medical benefits.
About Embargoes
Railroads issue embargoes when, in the judgement of the railroad, an actual or threatened physical or operational impairment, of a temporary nature, warrant restrictions against such movements. It is particularly critical in the event of labor disruption to prevent sensitive and dangerous goods to be stranded on the network. The embargoes are effective within 48 hours of being issued.
Any product coming to, leaving, or moving within Canada on rail will not be transported during a work stoppage. Only limited train movements within yards will be executed as there are not enough certified management train crews to ensure intercity train movements.
Should a settlement be reached, or arbitration be agreed to, CN will remove its embargoes and resume normal operations.
CN Forward-Looking Statements
Certain statements by CN included in this news release constitute “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and under Canadian securities laws. By their nature, forward-looking statements involve risks, uncertainties and assumptions. CN cautions that its assumptions may not materialize and that current economic conditions render such assumptions, although reasonable at the time they were made, subject to greater uncertainty. Forward-looking statements may be identified by the use of terminology such as “believes,” “expects,” “anticipates,” “assumes,” “outlook,” “plans,” “targets,” or other similar words. Forward-looking statements reflect information as of the date on which they are made. CN assumes no obligation to update or revise forward-looking statements to reflect future events, changes in circumstances, or changes in beliefs, unless required by applicable securities laws. In the event CN does update any forward-looking statement, no inference should be made that CN will make additional updates with respect to that statement, related matters, or any other forward-looking statement.
About CN
CN powers the economy by safely transporting more than 300 million tons of natural resources, manufactured products, and finished goods throughout North America every year for its customers. With its nearly 20,000-mile rail network and related transportation services, CN connects Canada’s Eastern and Western coasts with the U.S. Midwest and the Gulf of Mexico, contributing to sustainable trade and the prosperity of the communities in which it operates since 1919.
Contacts:
| Media | Investment Community |
| Jonathan Abecassis | Stacy Alderson |
| Director, Public Affairs and | Assistant Vice-President |
| Media Relations | Investor Relations |
| (438) 455-3692 media@cn.ca | (514) 399-0052 investor.relations@cn.ca |
FAQ
What action has CN (CNI) taken regarding the labour conflict with TCRC?
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