Update on TCRC collective bargaining negotiations

Rhea-AI Summary

Canadian Pacific Kansas City (CPKC) provided an update on its collective bargaining with the Teamsters Canada Rail Conference (TCRC) on May 16, 2024. The negotiations are set to resume on May 17, 2024, with the assistance of federal mediators. The Federal Minister of Labour’s referral to the Canada Industrial Relations Board (CIRB) has added uncertainty regarding potential work stoppages. Submissions from CPKC and TCRC are due by May 21, 2024, with replies by May 31, 2024. A legal strike or lockout cannot occur until the CIRB makes a decision. CPKC proposed maintaining certain services during strikes or lockouts to avoid the CIRB process, which the TCRC declined. CPKC committed to providing regular updates.

Positive

• Negotiations will resume on May 17, 2024, showing ongoing dialogue.
• CPKC is committed to the collective bargaining process, aiming for agreements beneficial to employees, customers, and the supply chain.
• Submissions and replies have clear deadlines, which could expedite decision-making.
• CPKC proposed maintaining essential services during potential strikes or lockouts, aiming to minimize disruption.

Negative

• Uncertainty regarding the timing of potential work stoppages due to CIRB involvement.
• TCRC declined CPKC’s offer of binding arbitration, which could prolong negotiations.
• Potential risk of service interruptions if no agreement is reached on maintaining services during strikes or lockouts.

CALGARY, AB, May 16, 2024 /PRNewswire/ - Canadian Pacific Kansas City (TSX: CP) (NYSE: CP) (CPKC) today published the following update on collective bargaining with the Teamsters Canada Rail Conference (TCRC):

CPKC and the TCRC leadership will resume meeting on May 17, 2024 with the assistance of federal mediators in an effort to achieve new collective agreements for our Train and Engine (T&E) and Rail Traffic Controller (RCTC) employees.

As we have said since these negotiations began, CPKC is firmly committed to the collective bargaining process and our objective remains to negotiate renewed agreements that are in the best interests of our employees, their families, our customers, the Canadian economy and North America's supply chains.

We recognize that the Federal Minister of Labour's referral to the Canada Industrial Relations Board (CIRB) has created uncertainty regarding the timing of a potential work stoppage and corresponding interruption of rail service on our Canadian network. While it remains unclear how long it will take for the CIRB to issue a decision, this is what we know today:

• The CIRB has requested submissions from CPKC and the TCRC as well as other interested stakeholders by May 21, 2024. The parties will have until May 31, 2024 to file replies.
• A legal strike or lockout cannot occur until the CIRB renders a decision. Notice (72 hours) pursuant to the Canada Labour Code is required before any legal strike or lockout could begin. 
• Recognizing our supply chains require certainty, now more than ever, CPKC has proposed to the TCRC that both parties agree on the services that should be maintained in the event of a strike or lockout. We believe this would eliminate the need for the CIRB referral process and bring much needed clarity regarding the timing of any potential strike or lockout.
• If no maintenance of services agreement is reached, based on precedent, it is unlikely the parties will be in a position to initiate a legal strike or lockout within the next 60 days.
• On Wednesday, CPKC voluntarily offered to enter binding arbitration to avoid a work stoppage, however, the TCRC declined.  

We are committed to keeping all stakeholders updated as this process unfolds and will provide updates at least every two weeks or more frequently as necessary.

Forward looking information
This news release contains certain forward-looking information within the meaning of applicable securities laws in both the U.S. and Canada. This news release contains forward-looking information relating, but not limited to, collective bargaining between CPKC and its labour unions, potential work stoppage and CPKC's business, operations and service. This forward-looking information also includes, but is not limited to, statements concerning expectations, beliefs, plans, goals, objectives, assumptions and statements about possible future events, conditions, and results of operations or performance.  Forward-looking information may contain statements with words or headings such as "financial expectations", "key assumptions", "anticipate", "believe", "expect", "plan", "will", "outlook", "should" or similar words suggesting future outcomes.   

Undue reliance should not be placed on forward-looking information as actual results may differ materially from the forward-looking information. Forward-looking information is not a guarantee of future performance. By its nature, CPKC's forward-looking information involves numerous assumptions, inherent risks and uncertainties that could cause actual results to differ materially from the forward-looking information, including but not limited to the following factors: changes in business strategies; general North American and global economic, credit and business conditions; risks in agricultural production such as weather conditions and insect populations; the availability and price of energy commodities; the effects of competition and pricing pressures; industry capacity; shifts in market demand; changes in commodity prices; uncertainty surrounding timing and volumes of commodities being shipped via CPKC; inflation; changes in laws and regulations, including regulation of rates; changes in taxes and tax rates; potential increases in maintenance and operating costs; uncertainties of investigations, proceedings or other types of claims and litigation; labour disputes; risks and liabilities arising from derailments; transportation of dangerous goods; timing of completion of capital and maintenance projects; currency and interest rate fluctuations; effects of changes in market conditions and discount rates on the financial position of pension plans and investments; and various events that could disrupt operations, including severe weather, droughts, floods, avalanches and earthquakes as well as security threats and governmental response to them, and technological changes. The foregoing list of factors is not exhaustive.  These and other factors are detailed from time to time in reports filed by CPKC with securities regulators in Canada and the United States. Reference should be made to "Item 1A - Risk Factors" and "Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations - Forward-Looking Information" in CPKC's annual and interim reports on Form 10-K and 10-Q. Readers are cautioned not to place undue reliance on forward-looking information. Forward looking information is based on current expectations, estimates and projections and it is possible that predictions, forecasts, projections, and other forms of forward-looking information will not be achieved by CPKC. Except as required by law, CPKC undertakes no obligation to update publicly or otherwise revise any forward-looking information, or the foregoing assumptions and risks affecting such forward-looking information, whether as a result of new information, future events or otherwise.

About CPKC
With its global headquarters in Calgary, Alta., Canada, CPKC is the first and only single-line transnational railway linking Canada, the United States and México, with unrivaled access to major ports from Vancouver to Atlantic Canada to the Gulf of México to Lázaro Cárdenas, México. Stretching approximately 20,000 route miles and employing 20,000 railroaders, CPKC provides North American customers unparalleled rail service and network reach to key markets across the continent. CPKC is growing with its customers, offering a suite of freight transportation services, logistics solutions and supply chain expertise. Visit cpkcr.com to learn more about the rail advantages of CPKC. CP-IR

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SOURCE CPKC

FAQ

What is the latest update on CPKC's collective bargaining with TCRC as of May 16, 2024?

CPKC and TCRC will resume negotiations on May 17, 2024, with federal mediators involved. Submissions are due by May 21, 2024, and replies by May 31, 2024.

What is the impact of the CIRB referral on CPKC's negotiations?

The CIRB referral has created uncertainty regarding the timing of potential work stoppages. A decision is required before any legal strike or lockout can occur.

What steps has CPKC proposed to avoid work stoppages during negotiations with TCRC?

CPKC proposed an agreement with TCRC to maintain essential services during strikes or lockouts, but this was declined by TCRC.

When did CPKC offer binding arbitration to TCRC, and what was the outcome?

On Wednesday before May 16, 2024, CPKC offered binding arbitration to avoid a work stoppage, but TCRC declined.

When can a legal strike or lockout occur in CPKC's negotiations with TCRC?

A legal strike or lockout cannot occur until the CIRB renders a decision, followed by a 72-hour notice under the Canada Labour Code.