CP strike update: Teamsters willing to continue talking; Trudeau signals reluctance to step in

Update 6 a.m. EDT 5/30

The formal statement issued by the Teamsters on the Canadian Pacific strike said the walkout occurred “despite the Teamsters Canada Rail Conference’s best efforts to reach a negotiated settlement.” It also said negotiations are ongoing.

“Teamsters are committed to working with federal mediators and reaching a negotiated settlement,”: the union statement said. “The union is willing to remain at the bargaining table during the strike.”

Earlier in the evening, CP had reached an agreement with the other union that had been threatening a strike, the IBEW. A Teamsters spokesman said in an email that the IBEW settlement had no impact on its own negotiations. The Teamsters strike affects more than 3,000 conductors and locomotive engineers.

It didn’t take long for shippers to begin demanding government action. Early Wednesday morning, the Aluminium Association of Canada, which is largely centered around the cheap hydropower of Quebec, said it is “calling on the government of Canada to act quickly and take the necessary steps to avoid the effects this strike could have.”

But while the conservative government of Stephen Harper back in 2012 took government action to end a strike against CP, current Canadian Prime Minister Justin Trudeau told Bloomberg in an interview Tuesday that it was not as likely to step in to end this dispute. 

“We believe deeply in working things out at the bargaining table,” Trudeau said in the interview. “We have companies that have gotten used to the fact that in certain industries, the government in the past was very quick to legislate against unions. We are not going to do that.”

Update, 11:30 p.m. EDT 5/29

Canadian Pacific workers represented by the Teamsters are on strike, according to multiple news reports.

However, the reports, some of which quoted Teamsters spokesman Christopher Monette, said the negotiations with Canadian Pacific are ongoing and have not been halted. The union was free to strike at 10 p.m. Tuesday.

The news of the strike comes on the heels of a three-year agreement between CP and workers from the International Brotherhood of Electrical Workers, announced soon after the 10 p.m. strike deadline came and went.

Update, 11:00 p.m. EDT 5/29

Soon after the 10 p.m. deadline for when a strike action by Canadian Pacific’s two unions could have commenced. the railroad announced an agreement with the smaller of the two bargaining units. 

The railroad said it had reached agreement with System Council No. 11 of the International Brotherhood of Electrical Workers (IBEW). “The tentative agreement ensures that IBEW employees remain on the job and passenger operations are not impacted,” CP said in a prepared statement.

The statement said nothing about negotiations with the larger Teamsters bargaining unit, which became free to strike at 10 p.m. Eastern time. 

Update, 11:30 a.m. EDT 5/29

Talks are continuing between Canadian Pacific and its unions, according to the head of the division of the IBEW at Canadian Pacific.

Steve Martin, the senior general counsel of IBEW System Council No. 11, said Tuesday morning that the two sides are “still in discussion,” but declined to offer any updates on their status, including whether CP had revised the offer it made to the unions that was roundly defeated last week.

Martin did say that if progress was being made at 10 p.m. Eastern time this evening, the clock could be “stopped” and that discussions could continue. The unions have authorized a strike at that hour, but it is not required if no agreement is in place at that time.

The three sides of the discussions–CP, Teamsters Canada and the IBEW–have not issued any formal statements on the negotiations since they announced the strike authorization vote late Saturday night.

Update, 7:30 a.m. EDT, 5/27

CP has commenced its work stoppage contingency plan and will work closely with customers to ensure a smooth, efficient and safe wind down of operations,” the company said in a prepared statement in reaction to the two unions’ action.

The wording of the notice states that the earliest the unions could go on strike would be Tuesday evening, but that it is not assured.

“CP is offering more of the same contract language that workers just voted to reject a few hours ago,” Doug Finnson, President of the TCRC said in the union’s statement. “The company clearly isn’t serious about reaching a negotiated settlement and delivering on their promise to do right by their employees.”  

The notice follows an overwhelming rejection by the rank-and-file of what CP said was a final offer. Negotiations resumed Friday in Calgary.

Such a 72-hour notice is necessary before the railroad can stop operations or a union can go on strike. Unions did issue that notice back in April, but a strike did not occur as the unions agreed that the CP offer could be put to its members.

The contract offers that were rejected were not an agreement between the unions and CP, but instead was an offer made by CP to the workers. The unions had recommended rejection, and the vote to reject was reported to be close to 98%. CP and its unions have gone through three strikes in recent years.

In the Teamsters’ prepared statement released Friday after the vote, TCRC President Doug Finnson ripped into CP. “CP’s actions have forced us to vote for strike action three times in the past six years,” he said. “Today, our members have again expressed their anger and frustration with CP. This is a reality check. It’s now up to CP to listen and show they respect workers by changing their confrontational relationship with their employees, our members.”  

 “CP is disappointed with the outcome of the vote given that both final offers provided for significant improvements to wages, benefits and working conditions that are consistent with agreements recently reached with other CP unions in both the United States and Canada,” the railroad said in its prepared statement.

In a web page directed at union members, CP said of its offer that it “offers improve(d) member wages, benefits, and essentially ask for nothing in return beyond certainty and stability for the next three years.”

A strike would hit transport markets at a time when alternative truck capacity is tight and there are increasing reports of movement off of trucks and into the intermodal sector. Canadian Pacific has extensive trackage in the northeast and upper Midwest U.S. as well as Canada.

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John Kingston

John has an almost 40-year career covering commodities, most of the time at S&P Global Platts. He created the Dated Brent benchmark, now the world’s most important crude oil marker. He was Director of Oil, Director of News, the editor in chief of Platts Oilgram News and the “talking head” for Platts on numerous media outlets, including CNBC, Fox Business and Canada’s BNN. He covered metals before joining Platts and then spent a year running Platts’ metals business as well. He was awarded the International Association of Energy Economics Award for Excellence in Written Journalism in 2015. In 2010, he won two Corporate Achievement Awards from McGraw-Hill, an extremely rare accomplishment, one for steering coverage of the BP Deepwater Horizon disaster and the other for the launch of a public affairs television show, Platts Energy Week.