CN eyes employee cuts of 35 per cent

TORONTO, (Nov. 12, 2003) — While many truck drivers yearn to be paid by the hour, workers for Canadian National Railway will fight to make sure it never happens to them, their union said.

CN CEO Hunter Harrison said this week the company is looking to renegotiate more union contracts to pay crews on trains by the hour instead of distance travelled. That way, he says, CN will be able to reduce its train and engine crew workforce by up to 35 per cent.

Over the past year, CN won a breakthrough on the hourly-pay issue with some of its U.S. unions, affecting 1,700 employees. The Montreal-based company is currently negotiating with several unions in Canada, representing 13,000 workers — including 4,700 in the operating crews. The current three-year contracts expire at the end of this year.

John Armstrong of the United Transportation Union, which represents about 4,000 CN employees, said he was discouraged that Harrison put forth the idea publicly just as bargaining on a new contract started with the union.

Meanwhile, Harrison also told investors he considers a major railway merger that includes CN inevitable in North America. “I don’t know when, but I would guess that in three to five years, someone is going to fire a shot,” the Canadian Press reported him as saying. “It’s a big step, but I would imagine someone in the U.S. will probably take us.”

In 2000, U.S. regulatory authorities blocked CN’s takeover bid for the Burlington Northern railway. CN currently does about half its business in the United States.

— From Canadian Press