Canadian Pacific heads toward a strike beginning Saturday after midnight

CP Holiday Train 2017 NZ-2.jpg

The Canadian Pacific rail system is set to shut down just after midnight Saturday with the commencement of a strike by its two key unions.  

In a statement released to customers late Thursday, CP said that it had "commenced and will continue to executive a safe and structured shutdown of its train operations in Canada." The two unions--the Teamsters Canada Rail Conference-Train & Engine (TCRC) and the International Brotherhood of Electrical Workers (IBEW)--have set a strike notice for 12:01 a.m. on Sunday. 

CP also immediately implemented an embargo on application for shipments on "all shipments originating in Canada which are billed to any Canadian or U.S. destinations" and "all shipments originate in the United States which are billed to any Canadian destinations."

But the statement also noted that the embargo could be rescinded at any time. In a news release, the company quoted Keith Creel, the President and CEO, as saying that CP was going to present the IBEW with a revised contract offer late on Thursday. In the statement, CP said it had made "significant movement" in a Monday bargaining session with the TCRC.

But late Thursday, the TCRC released a statement that it said was in reaction to a CP claim that "the unions are attempting to take the company hostage." "If CP is a victim, then they're a victim of their own aggressive behaviour and they must finally be feeling the consequences of their actions," TCRC President Doug Finnson was quoted as saying in the statement. 

In an analyst note Thursday, Jason Seidl of Cowen & Co. said CP management, on its first quarter earnings call, "appeared to sound like they were willing to take some short term pain in an effort to position the company properly for the future. Hence the likelihood of a strike at this point remains high in our opinion." Still, that was only a small part of the report; a strike would be viewed only as a "near term risk" for the company.

The road to the possible walkout began with the unions filing a 72-hour notice of an intention to strike, as it would be required to do under Canadian law.

(Editor's note: an earlier version had graphics referring to Canadian National.)